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H 3155

An Act allowing for the deduction of business interest

194th Legislature (2025-2026) Introduced by Hannah Kane

Bill allows Massachusetts businesses to deduct interest paid on business loans from state taxable income, reducing corporate tax liability and aligning with federal tax treatment.

Reporting date extended to Monday, January 4, 2027
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Bill Summary · H 3155

Legislative bill overview

H.3155 would allow Massachusetts businesses to deduct interest expenses paid on business loans from their taxable income. This aligns Massachusetts tax law with federal tax treatment of business interest, which has been deductible under federal law for decades.

Why is this important

Business interest deductions directly reduce the tax burden on companies, potentially lowering their state tax liability and improving cash flow. This can affect business profitability calculations, investment decisions, and competitiveness relative to other states with similar provisions.

Potential points of contention

  • Revenue impact: The state loses tax revenue from allowing this deduction; fiscal estimates matter for state budget planning
  • Business size disparities: Larger corporations with more debt may benefit disproportionately compared to small businesses with minimal borrowing
  • Federal-state alignment debate: Whether Massachusetts should automatically follow federal tax rules or maintain independent state tax policy

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

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