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SD 292

An Act relative to the short term capital gains rate to make Massachusetts more competitive

194th Legislature (2025-2026) Introduced by Bruce Tarr

SD 292 - An Act relative to the short term capital gains rate to make Massachusetts more competitive OverviewBill Number: SD 292 Title: An Act relative to the short term capital g

House concurred
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Bill Summary · SD 292

SD 292 - An Act relative to the short term capital gains rate to make Massachusetts more competitive

Overview

Bill Number: SD 292
Title: An Act relative to the short term capital gains rate to make Massachusetts more competitive
Status: House concurred
Introduced: February 27, 2025

Purpose and Intent

The primary goal of this bill is to make Massachusetts more economically competitive by reducing the short-term capital gains tax rate. The intent is to incentivize investment and business activity in the state by aligning its tax policies more closely with neighboring states and the federal government.

Key Provisions

  • Reduces the short-term capital gains tax rate from 12% to 9% for individuals and trusts
  • Maintains the existing 6% long-term capital gains tax rate
  • Applies the new 9% short-term rate to gains realized on assets held for less than one year
  • Directs the Department of Revenue to update tax forms and guidance to reflect the new rate

Affected Parties and Impacts

  • Individual taxpayers and trusts that realize short-term capital gains will see a 3 percentage point reduction in their tax rate
  • Investors, entrepreneurs, and businesses engaged in activities that generate short-term capital gains will benefit from the more favorable tax environment
  • The state government is expected to see a modest decrease in tax revenue, though proponents argue this will be offset by increased economic activity and investment in Massachusetts

Procedural and Timeline Considerations

The bill has passed the state Senate and is currently under consideration in the House of Representatives. If the House concurs, the bill will be sent to the Governor for signature into law. If enacted, the new 9% short-term capital gains tax rate would take effect for tax years beginning on or after January 1, 2026.

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

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