INTRO TEXT Of the seven business tax proposals put forward by Gov. Deval Patrick, “combined reporting” would deliver the biggest boost to state coffers, an estimated $136 million in fiscal 2008. It would prohibit corporations from shifting profits to subsidiaries in states with lower corporate taxes in order to reduce their exposure in Massachusetts.
Patrick’s plan was a hit with the liberal Massachusetts Budget and Policy Center, which has long supported the change. But the gambit infuriated business leaders, and House Speaker Sal DiMasi and newly elected Senate President Therese Murray both gave it a big thumbs-down.
It’s not the first time the issue of combined reporting has come up on Beacon Hill. In 2004, the Legislature directed a special commission of lawmakers and representatives from seven groups, including the MBPC, “to investigate and study the effectiveness of requiring combined reporting.”
What did the commission find? It was never convened, a fate not uncommon for study groups authorized by the Legislature.
But it may be time for another study—for real. Patrick, DiMasi, and Murray all support the idea of a commission to wrestle not only with combined reporting, but with re-codification of the entire state tax code. State Rep. Paul Casey, a Winchester Democrat who once headed a House committee that covered taxation, says Massachusetts needs a “solidified, holistic approach to bringing the tax code up to date.”