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H 3135

An Act relative to the tax exemption status of municipal employee pensions

194th Legislature (2025-2026) Introduced by Steven Howitt

Bill H 3135 allows Rhode Island municipal retirees living in Massachusetts to exempt up to $50,000 of their pension income from state taxes, boosting their financial security.

Accompanied a study order, see H5313
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Bill Summary · H 3135

Summary of Bill H 3135: An Act Relative to the Tax Exemption Status of Municipal Employee Pensions

Bill Information:
- Bill Number: H 3135
- Introduced On: February 27, 2025
- Status: Hearing scheduled for November 18, 2025, from 10:00 AM to 01:00 PM in A-1
- Presented By: Representative Steven S. Howitt (4th Bristol District)
- House Docket Number: 1175

Purpose and Intent

Bill H 3135 aims to amend the tax exemption status of municipal employee pensions in Massachusetts, specifically for retired municipal employees from the state of Rhode Island. The intent is to provide a financial benefit to these retirees by allowing them to exempt a portion of their retirement income from Massachusetts state income tax.

Key Provisions

The bill proposes the following changes to Section 19 of Chapter 32 of the General Laws:

  1. Tax Exemption for Rhode Island Municipal Pensions:
    • Retired municipal employees of Rhode Island who are residents of Massachusetts will be eligible for a state income tax exemption.
    • The exemption applies to the first $10,000 of income received from a Rhode Island municipal retirement pension.
    • Additionally, this exemption can be applied to any other municipal pensions the resident may be receiving, with a total exemption limit of up to $50,000 per year.

Affected Parties

  • Retired Municipal Employees: The primary beneficiaries of this bill are retired municipal employees from Rhode Island who have relocated to Massachusetts.
  • State Revenue: The bill may have implications for state tax revenue, as it introduces a new exemption that could reduce the taxable income of eligible retirees.

Procedural Aspects

  • The bill was filed on January 14, 2025, and has been referred to the committee on Revenue.
  • A hearing is scheduled for November 18, 2025, where stakeholders can discuss the bill's implications and provide input.

Related Legislation

  • This bill is a replacement for a similar matter filed in the previous session, identified as House, No. 2834 of 2023-2024.

Conclusion

Bill H 3135 seeks to enhance the financial well-being of retired municipal employees from Rhode Island living in Massachusetts by providing a tax exemption on their pensions. The proposed changes could significantly impact the income tax obligations of these retirees, making it a noteworthy piece of legislation for both the affected individuals and the state's fiscal landscape.

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

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