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HD 3390

An Act combating offshore tax avoidance

194th Legislature (2025-2026) Introduced by James Arena-DeRosa and 48 co-sponsors

Massachusetts bill establishes state-level rules to prevent corporations from shifting profits offshore, protecting state tax revenue from legally structuring income away from state taxation.

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Bill Summary · HD 3390

Legislative bill overview

HD 3390 would establish Massachusetts state-level taxation provisions to prevent corporations and individuals from shifting profits to offshore jurisdictions to avoid state income taxes. The bill aims to address tax avoidance strategies by requiring reporting and potential taxation of income derived from or connected to Massachusetts economic activity, regardless of where profits are officially booked.

Why is this important

States lose significant revenue when profitable businesses use legal structures to move taxable income offshore while maintaining operations in-state. This affects funding for schools, infrastructure, and services that depend on tax revenue. For Massachusetts specifically, this could recover tax revenue from multinationals operating within the state while keeping local competition fair between businesses that cannot easily relocate profits.

Potential points of contention

  • Implementation complexity: Determining what constitutes "Massachusetts-connected" income and enforcing taxation across interstate/international corporate structures creates administrative burden and potential disputes with federal tax authority
  • Business competitiveness concerns: Critics may argue stricter state-level taxation could discourage corporate headquarters or operations in Massachusetts compared to neighboring states with lower tax enforcement
  • Constitutional questions: Federal constitutional provisions limiting state tax authority over interstate commerce could create legal challenges to the bill's enforceability

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

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