Bill
S 2044
Requires DOR to charge late Massachusetts taxes at the federal short-term rate plus 2 percentage points, computed as simple interest (not compound).
Status: Introduced; referred to committee (see “Procedural status” below)
Filed: 01/08/2025 (Senate Docket No. 122 / Senate No. 2044)
Presented by: Sen. Michael O. Moore
Primary subject: Department of Revenue interest rates
Note on metadata: the materials provided contain conflicting headings and sponsor lists. This summary focuses on the actual legislative text attached, which amends Massachusetts General Laws chapter 62C, §32(a) to change how interest on unpaid taxes is calculated.
Purpose
- To change the statutory interest rate applied to tax amounts not paid to the Commissioner of Revenue by their statutory due date by tying the state rate to the federal short-term rate plus a fixed margin, and to specify that interest is computed as simple interest.
Key provision (text of change)
- Amends subsection (a) of G.L. c. 62C, §32 by replacing the second sentence with:
- “If any amount of tax is not paid to the commissioner on or before its statutory due date, there shall be added to the tax interest at the rate of the federal short-term rate determined under section 6621(b) of the Internal Revenue Code, as amended and in effect for the taxable year, plus 2 percentage points, computed as simple interest.”
What the bill would do
- Sets the interest rate on late-paid state taxes equal to:
- (Federal short-term rate as defined in IRC §6621(b) for the taxable year) + 2 percentage points.
- Specifies interest is calculated as simple interest (not compound interest) on the unpaid tax amount.
- Replaces the current statutory sentence that previously established the state’s interest calculation (the exact prior language is removed and replaced).
Who would be affected
- Taxpayers with late or unpaid Massachusetts tax liabilities (individuals, businesses, and other entities).
- The Massachusetts Department of Revenue (administration and revenue forecasting).
- Potentially litigants in tax disputes where interest calculation is contested.
Potential impacts
- Volatility: linking the state rate to the federal short-term rate makes the state interest rate variable and responsive to federal rate changes.
- Cost to taxpayers: depending on prevailing federal short-term rates, interest charges on unpaid taxes could increase or decrease relative to the current state rule.
- Simplicity/consistency: using the IRC short-term rate plus a fixed margin may simplify annual rate-setting and align state practice with a federal benchmark.
- Revenue forecasting: variable interest receipts for the state could affect short-term revenue estimates.
Procedural / timeline notes
- Docketed as Senate No. 2044 (filed 1/08/2025). Legislative actions provided in the record are inconsistent; items cited include referral to Revenue committee, hearings scheduled later in 2025, and other committee referrals. The bill text itself is presented in the 194th General Court (2025–2026).
Additional note
- The bill text’s title and its statutory change indicate the intent to “equalize” DOR interest rates by fixing a uniform method tied to the federal short-term rate + 2%. Given conflicting metadata in the supplied materials, users should consult the official legislative docket (Massachusetts Legislature) for the latest status, sponsors, and any amendments.
Compiled from official sources — confirm details with the bill’s official record.
Sign in to ask a question.
