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Bill

S 2091

An Act allowing for the deduction of business interest

194th Legislature (2025-2026) Introduced by Peter Durant and 1 co-sponsor

Bill allows Massachusetts businesses to deduct interest expenses from state taxes, reducing corporate tax liability and aligning state law with federal provisions.

Reporting date extended to Thursday June 25, 2026
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Bill Summary · S 2091

Legislative bill overview

S 2091 proposes to allow Massachusetts businesses to deduct business interest expenses from their state taxable income. Currently, Massachusetts has restrictions on business interest deductions that differ from federal tax law. This bill would align state treatment more closely with federal provisions, allowing companies to reduce their state tax liability based on qualifying interest payments.

Why is this important

Business interest deductions directly affect corporate tax burdens and business cash flow in Massachusetts. Companies with significant debt financing—including startups, manufacturers, and real estate developers—would see reduced state tax obligations. This could influence business location decisions and competitiveness, while also affecting state tax revenue projections.

Potential points of contention

  • Revenue impact: The bill reduces state tax collections from businesses, requiring either budget cuts or alternative revenue sources to maintain state spending
  • Fairness concerns: Larger corporations with debt-financed operations benefit more than smaller businesses or those using equity financing, potentially widening competitive advantages
  • Debt incentivization: Allowing interest deductions may encourage businesses to use debt financing over equity, increasing financial leverage and economic risk in the state

Compiled from official sources — confirm details with the bill’s official record.

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