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Bill

H 3110

An Act combating offshore tax avoidance

194th Legislature (2025-2026) Introduced by James Arena-DeRosa and 93 co-sponsors

Massachusetts bill would impose reporting requirements and enforcement mechanisms to prevent individuals and corporations from reducing state tax liability through offshore income or asset transfers.

Accompanied a study order, see H5574
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Bill Summary · H 3110

Legislative bill overview

H 3110 is a Massachusetts bill designed to prevent corporations and wealthy individuals from reducing their state tax liability by shifting income or assets to offshore jurisdictions. The bill would establish reporting requirements and enforcement mechanisms to close loopholes that allow taxpayers to avoid Massachusetts taxes through offshore structures.

Why is this important

States lose significant tax revenue when taxpayers use offshore accounts and entities to hide income or assets from state taxation. Massachusetts, like most states, has limited tools to track and tax offshore wealth, creating a competitive disadvantage where compliant taxpayers bear a larger tax burden while sophisticated users exploit gaps in state law.

Potential points of contention

  • Federal preemption concerns: Critics may argue that state-level offshore tax enforcement could conflict with federal tax law and international treaties, creating compliance complexity for multistate businesses
  • Definitional challenges: The bill must precisely define what constitutes "offshore avoidance" without inadvertently penalizing legitimate international business operations, cross-border investment, or legal tax planning
  • Compliance costs: Small and mid-sized businesses with any international dealings may face increased reporting burdens and administrative costs, even if they don't engage in tax avoidance

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

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