Bill
H 3052
A Massachusetts tax incentive lowers corporate tax by 1.5 points for benefit corporations that certify meeting 4+ worker-benefit standards (e.g., living wage, parental leave, profi
Status and procedural history
- Bill number: H.3052 (presented by Rep. Michelle L. Ciccolo, 15th Middlesex)
- Prefiled: 12/05/2024; Introduced and read first time: 01/14/2025
- Referred to: Committee on Judiciary (initial referral), then Committee on Revenue (02/27/2025)
- Sponsors added: Sanders, Duncan, Forrest, Hartnett, Vaughan, Pedalino (dates 02–04/2025)
- Hearing: scheduled/rescheduled for 10/03/2025 in Gardner Auditorium (per docket entries)
- Note on record: the bill text provided here is for a Massachusetts tax/benefit-corporation measure. The docket also contains unrelated model text from a South Carolina enhanced-penalty bill for assault/battery; that South Carolina text is not part of the Massachusetts proposal and appears to be included in error.
Purpose and intent
The bill creates a tax incentive to encourage Massachusetts corporations that have elected benefit-corporation status (under chapter 156E) to adopt stronger employee-centered policies. It does so by offering a reduced corporate income tax rate to certified benefit corporations that meet specified worker-benefit requirements.
Key provisions
- New statutory section: inserts Section 38OO into Chapter 63 of the General Laws.
- Definition:
- “Living wage” is defined by reference to the MIT Living Wage Calculator and is intended to cover basic needs (food, housing, health care, transportation, etc.).
- Preferential tax rate:
- A qualified benefit corporation may use a preferential corporate tax rate equal to the Commonwealth’s corporate tax rate minus 1.5 percentage points (i.e., a 1.5 percentage-point tax-rate reduction).
- Eligibility depends on meeting the standards in subsection (c) and obtaining certification from the Department of Revenue (DOR).
- Eligibility criteria (must meet all three below):
1. Offer at least 4 of the following 6 employee benefits:
- Pay a living wage (as defined by MIT calculator);
- Provide 12 weeks paid parental leave following birth or adoption;
- Make flexible spending accounts available;
- Maintain a CEO-to-lowest-paid-employee compensation ratio no greater than 25:1;
- Elect governance as an employee cooperative under chapter 157A;
- Provide profit-sharing that returns at least 10% of corporate profits to employees.
2. Be certified by the Department of Revenue under the procedures in subsection (d).
3. Have provided at least 4 of the listed benefits for 12 consecutive months prior to and during the taxable year in which the tax benefit is claimed.
- Administrative rules and application:
- The DOR commissioner is directed to promulgate regulations establishing the certification process.
- The state secretary, in consultation with the commissioner, shall promulgate regulations establishing an application process for eligibility for the preferential rate.
Who is affected
- Directly affected:
- Benefit corporations incorporated under Massachusetts law (chapter 156E) that choose to seek certification and implement qualifying benefits.
- Employees of qualifying employers (who may receive higher wages, paid parental leave, profit-sharing, etc.).
- Indirectly affected:
- Commonwealth revenues: a 1.5 percentage-point reduction in corporate tax rate for qualifying entities will lower tax receipts relative to baseline collections from those firms.
- Employers considering organizational form or benefits packages may be incentivized to convert to benefit-corporation status or expand employee benefits.
- State agencies (DOR and Secretary of the Commonwealth) will administer certification and application procedures and enforcement.
Potential fiscal and policy considerations
- Fiscal impact depends on how many corporations qualify and claim the credit; the statute sets a fixed rate reduction (1.5 percentage points) rather than a capped credit amount.
- The policy is designed to promote higher employee compensation and workplace policies (living wages, parental leave, profit-sharing, narrower pay ratios, cooperative governance).
- Administrative burden: rulemaking and certification requirements for DOR and the Secretary’s office.
Clarifications and caveats
- The bill text supplied includes an unrelated South Carolina model amendment concerning enhanced penalties for assault/battery; that material is not part of the Massachusetts H.3052 benefit-corporation proposal and appears to be extraneous. The Massachusetts bill as introduced by Rep. Ciccolo concerns tax incentives for public benefit corporations.
Compiled from official sources — confirm details with the bill’s official record.
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