Massachusetts legislative leaders said Thursday they have reached an agreement on a tax relief bill after months of closed-door negotiations, signaling a wide-ranging package that has been debated in some form on Beacon Hill since 2022 is nearing the governor’s desk.
Legislative officials did not release details of the bill on Thursday evening, saying they intend to file and vote on the agreement at some point next week.
House Speaker Ronald Mariano and Senate President Karen E. Spilka said in a statement with their respective budget chairs that the bill “responsibly implements our shared goal of making Massachusetts more affordable, equitable, and competitive.”
“In an effort to provide meaningful financial relief to the Commonwealth’s residents and businesses, we are thrilled to announce that an agreement has been reached in principle that reconciles the differences between the House and Senate tax relief packages,” the leaders said.
The legislation both chambers advanced would double the tax credit for seniors who rent or own in Massachusetts, raise the deduction for renters from $3,000 to $4,000, and increase the state’s earned income tax credit — designed to help low-income families — from 30 percent to 40 percent of the federal credit.
The House and Senate also both proposed reshaping the Massachusetts estate tax, considered among the strictest in the country, by raising the tax threshold from $1 million to $2 million.
But they differed on key details, from the overall size of the package to their embrace of business-friendly tax cuts.
The House’s $1.1 billion bill, which was designed to take full effect in three years, included a provision to cut the tax rate on short-term capital gains — profits on investments held up to a year — from 12 percent to 5 percent. It’s a change Governor Maura Healey also pushed as part of her own $1 billion proposal, arguing it would help make the state more competitive.
The Senate rejected that measure, as well as another business-backed initiative that the House passed to adjust how state corporate taxes are calculated.
“We focused on individuals and families, not on corporations,” state Senator Michael J. Rodrigues, the chamber’s budget chief, said at the time.
The Senate plan, unlike the House, also sought to dramatically raise the cap on a tax exemption designed to help boost housing construction, while also raising the annual authorization on a low-income housing tax credit by $20 million.
The Senate’s bill did include a similar proposal to the House to combine two existing tax credits — for child care and dependent care — into one. But it would allow taxpayers to claim $310 per dependent, roughly half of the $600 cap the House and Healey sought.
But whether those, or other elements, survived the private negotiations is unclear. “We’ll have more details to share next week,” an aide to Mariano said Thursday night.
A tax relief deal has hung over the State House as one of, if not the, biggest item on the Legislature’s to-do list this fall. But when it could emerge was unclear after lawmakers broke for August without an agreement, and there’s been little movement on any major legislation since.
Lawmakers appeared primed to pass a package last year in former governor Charlie Baker’s final year in office. But they ultimately scuttled plans for permanent tax relief after officials became aware the state had triggered a 1986 tax-cap law for just the second time in nearly four decades, later prompting the Baker administration to send millions of taxpayers their cut of a $3 billion refund.