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Bill

H 3106

An Act to allow cities and towns to increase the local tax rate on meals

194th Legislature (2025-2026) Introduced by Jamie Eldridge and 2 co-sponsors

Bill allows Massachusetts municipalities to set their own meals tax rates above the current 6.25% statewide baseline, shifting tax authority from state to local level.

Accompanied a study order, see H5195
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Bill Summary · H 3106

Legislative bill overview

H 3106 would authorize Massachusetts cities and towns to independently increase their local meals tax rate above the current statewide rate. Currently, Massachusetts has a uniform 6.25% meals tax, and this bill would grant municipalities the power to impose higher rates within their jurisdictions. The bill has been under committee review since February 2025, with a hearing scheduled for November 2025.

Why is this important

Local meals tax increases would directly affect restaurant pricing and consumer spending in participating municipalities, potentially impacting both local government revenues and business competitiveness across town borders. This represents a shift toward fiscal localism, allowing communities to fund services independently but potentially creating economic disparities between adjacent towns. The hospitality and restaurant industry has significant stakes in how this policy develops.

Potential points of contention

  • Tax competition effects: Border towns may see customer flight to lower-tax jurisdictions, disadvantaging restaurants and small businesses in higher-tax areas
  • Regressivity concerns: Meals taxes disproportionately burden lower-income households who spend higher percentages of income on food, and variable local rates could worsen equity
  • Administrative complexity: Requiring businesses to track and remit different tax rates by location increases compliance costs and potential errors

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

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