You can now read 10 articles in a month for free on BostonGlobe.com. Read as much as you want anywhere and anytime for just 99¢.

The Boston Globe

Business

Lower corporate taxes will aid growth, Boston Chamber says

Corporate taxes in Massachusetts are the fifth-highest in the country, and should be changed to make the state more competitive, the Greater Boston Chamber of Commerce said in a report Thursday.

While Massachusetts enjoys a number of draws for companies, including talent and some leading industries, “we are lagging when it comes to business cost structure, notably the corporate tax system,’’ according to Paul Guzzi, the chamber’s chief executive.

Continue reading below

The chamber suggested four areas where the commonwealth could reduce the corporate tax burden and put Massachusetts closer in line with other states’ tax policies. Those include letting financial services and utilities companies carry forward losses over 20 years, as other industries can, and allowing companies that operate in multiple states to pay Massachusetts taxes proportionate to their business here.

In addition, the proposal calls for ending the balance-sheet tax, which the chamber calls a double taxation of businesses.

“We’re becoming an outlier” with the balance-sheet tax, said Jim Klocke, executive vice president of the chamber. This tax, which is in addition to the tax on profits, applies even when companies lose money.

The chamber recommended phasing in these changes starting Jan. 1, 2015. But the business group said it has not yet tallied the effect such changes would have on revenue to the state, at a time when Massachusetts is facing strained budgets and Governor Deval Patrick wants to raise taxes on individuals and companies, while lowering the sales tax.

Patrick has proposed raising sales taxes on certain computer software and services, as well as reclassifying some businesses and changing deductions. His proposals would ring up $499 million in new taxes, according to an analysis by the Massachusetts Taxpayer Foundation.

Continue reading below

“There is very little in the governor’s proposal to help business,’’ foundation president Michael Widmer said in an e-mail. In addition to direct tax increases on companies, he said, the increase in income tax rates would affect small businesses as well.

“With the fifth highest corporate tax burden in the nation and a still-fragile economy, we need long-term steps which reduce rather than increase that burden,’’ the chamber’s Klocke said of the governor’s plan.

Massachusetts’s corporate taxes add up to 0.54 percent of the state’s GDP — 74 percent higher than the average for the other states, according to the report, which the accounting firm PricewaterhouseCoopers helped prepare.

The chamber said only Alaska, New Hampshire, West Virginia, and California tax companies at a higher rate than Massachusetts.

Beth Healy can be reached at bhealy@globe.com.

You have reached the limit of 10 free articles in a month

Stay informed with unlimited access to Boston’s trusted news source.

  • High-quality journalism from the region’s largest newsroom
  • Convenient access across all of your devices
  • Today’s Headlines daily newsletter
  • Subscriber-only access to exclusive offers, events, contests, eBooks, and more
  • Less than 25¢ a week