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H 3142

An Act relative to exempting small businesses from the telecommunications tax

194th Legislature (2025-2026) Introduced by Kim Ferguson and 3 co-sponsors

The bill would exempt eligible small Massachusetts businesses from the sales tax on telecommunications services.

Accompanied a study order, see H5313
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Bill Summary · H 3142

Summary of H 3142: An Act relative to exempting small businesses from the telecommunications tax

Purpose and scope

H 3142 seeks to exempt certain small businesses from the Commonwealth’s telecommunications sales tax. The bill would add a new eligibility subsection to the existing telecom tax statute, providing a tax exemption for qualified small businesses on telecommunications services.

Key provisions

  • Legislative change: Adds a new subsection (bb) to Section 6 of Chapter 64H of the General Laws (as amended by Chapter 238 of the Acts of 2024).
  • Eligibility criteria: To qualify, a business must be:
    • Independently owned and operated (i.e., not a subsidiary of a larger corporation for eligibility purposes),
    • Classified as a small business under the Small Business Administration (SBA) criteria and size standards,
    • Located in Massachusetts and employ fewer than 100 employees in the Commonwealth, or have under $2 million in annual business for retail and service industries.
  • Tax relief: Eligible businesses would be exempt from any sales tax imposed on telecommunications services, as defined in Section 1 of Chapter 64H.
  • Effective scope: The exemption applies specifically to the sales tax on telecommunications services; other taxes or fees remain unaffected.

Eligibility and definitions

  • Small business qualification hinges on SBA criteria and on either of two size thresholds (fewer than 100 MA employees or under $2 million in MA annual retail/service revenue).
  • The exemption targets the telecommunications tax, not other tax categories within Chapter 64H or elsewhere.

Affected entities

  • Eligible entities include sole proprietorships, partnerships, LLCs, corporate trusts, corporations, or other businesses that meet the independence and SBA-based criteria and the size thresholds.
  • The exemption would apply to the portion of the tax on telecommunications services they purchase or use in Massachusetts.

Procedural history and timeline

  • Introduced: February 27, 2025.
  • Referred to: Committee on Revenue (February 27, 2025).
  • Legislative status: Senate concurrence noted on February 27, 2025.
  • Hearing schedule:
    • Initially set for an online/in-person session on October 17, 2025, with a change noted to extend the hearing time (A-2, and Virtual Hearing updated to a new end time).
    • A subsequent entry indicates the hearing on October 17, 2025 is scheduled from 10:00 AM to 1:00 PM (A-2).
  • Related filing: HD 1320 (this version) replaces prior similar proposals, including HD 2847 of 2023-2024.

Notes on fiscal impact and scope

  • The text provided does not include a fiscal impact estimate. If enacted, the state would forego telecommunications sales tax revenue tied to eligible small businesses, balanced against the policy goal of reducing tax burden for underserved small businesses. No sunset provision or effective date is specified in the version excerpt.

Related matters

  • Similar prior legislation exists (HD 2847 of 2023-2024), indicating recurring interest in targeted telecommunications tax relief for small businesses.

This summary captures the bill’s intent, the core provisions, who would benefit, and its current procedural status based on the available text.

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

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