02/02/2016
The state income tax rate will drop next year for all Massachusetts residents.
As of Jan. 1, 2016, the income tax rate will be 5.10 percent, a drop from the current 5.15 percent.
"Meeting the requirements needed to reduce the income tax rate is a sign that the Massachusetts economy remains strong," Gov. Charlie Baker said in a statement. "Allowing citizens across the Commonwealth to keep more money in their pockets will allow the state's economy to continue growing in 2016."
Under the new tax rate, someone paying state income taxes on $66,000 would pay around $33 less.
A ballot initiative passed by voters in 2000 required the state to reduce the income tax rate to 5 percent, from what was then 5.85 percent. Lawmakers passed a bill in 2002 setting the reduction at 0.05 percent a year in each year that certain economic triggers are met.
The triggers ensure that the state's economy is strong enough to withstand the loss of tax revenue. The Department of Revenue certified on Tuesday that the state had met the final economic trigger this year.
In crafting the state budget for the current fiscal year, lawmakers had assumed that the tax rate would decrease, so the budget takes the lower rate into account. The cut will result in the state taking in $74 million less in income taxes in the second half of fiscal year 2016, which ends June 30.
"This is good news for the taxpayers with no new impact on the state's fiscal outlook," said Secretary of Administration and Finance Kristen Lepore.
