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S 2017

Relates to conveying land to the town of Montague, Lewis county, in order to allow the expansion of the town's barn for public use

2025 Regular Session Introduced by Mark Walczyk

Massachusetts would tax annual gross revenues from digital advertising services earned by MA users, with a graduated rate (5% to 15%) starting once revenues exceed certain threshol

OPINION REFERRED TO JUDICIARY
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Bill Summary · S 2017

Summary — S.2017 (Senate Docket No. 1090) — Digital Advertising Local Revenues Tax

Note on source material: the bill text supplied is a Massachusetts Senate bill (Senate No. 2017 / Senate Docket No. 1090) filed by Senator Patricia D. Jehlen titled “An Act establishing a tax on local revenues from digital advertising.” The surrounding metadata supplied with this request includes conflicting items (an unrelated land‑conveyance title and different sponsor names). This summary is based on the Massachusetts bill text (Chapter 64O) included in the packet.

Purpose

To create a new Massachusetts state tax on gross revenues earned from digital advertising services that are provided to users located in the Commonwealth, with the stated goal of taxing local revenues from digital advertising.

Key definitions (selected)

  • Annual revenues: income from all sources before expenses/taxes, under GAAP, earned in the Commonwealth.
  • Assessable base: annual revenues derived from digital advertising services in the Commonwealth.
  • Digital advertising services: ads on digital interfaces (banner, search, interstitial, promoted/sponsored content, etc.).
  • Digital interface: software such as websites or applications accessible by a user device.
  • User location: determined by device IP address indicating the device is in the Commonwealth or if the user is “known or reasonably presumed” to be using the device in the Commonwealth.

Main provisions

  • Tax imposition (Section 2): Commissioner of Revenue shall impose a tax on annual gross revenues of any person derived from digital advertising services that appear to users in Massachusetts (per IP or reasonable presumption).
  • Tax rates (Section 3, graduated):
    • 5% on assessable base for persons with annual gross revenues of $50,000,000 through $100,000,000.
    • 10% for $100,000,001 through $200,000,000.
    • 15% for revenues exceeding $200,000,001.
  • Filing and payment (Section 4–5):
    • Persons with at least $100,000 in such revenues in a calendar year must file an annual return under oath by April 15 of the following year.
    • Those who reasonably expect >$100,000 must file an estimated tax declaration by April 15 and quarterly estimated returns (June 15, Sept 15, Dec 15).
    • Estimated payments: at least 25% of estimated tax with declaration and each quarterly return; unpaid tax due with the annual return.
    • Returns must include attachments and records as required by the Commissioner.
  • Enforcement and assessment (Sections 6–7): Commissioner may estimate and assess tax where returns are missing or fraudulent; assessments may be made at any time in cases of fraud/evasion/no return/incomplete return; timing rules tied to federal adjustment reports.
  • Effective date: Tax applies beginning with the tax year starting January 1, 2024.

Who is affected

  • Primary: digital advertising providers, platforms, publishers, and intermediaries that sell or deliver digital ad services and earn gross ad revenues tied to Massachusetts users.
  • Secondary: businesses that pass costs through, small publishers, and advertising-supported services; state revenue and tax administration resources.

Notable drafting or policy issues

  • Thresholds/ambiguities: The filing threshold is $100,000, but the lowest explicit tax rate tier starts at $50 million — the statute does not explicitly state the tax rate (or existence of tax) for entities with revenues below $50 million but above the $100k filing threshold. This could create compliance and interpretation issues.
  • Nexus rule: reliance on IP address or “known or reasonably presumed” location may raise operational and privacy issues and potential litigation over applicability.
  • Administrative burden: new recordkeeping, reporting and estimated payment regimes for affected firms; potential revenue forecasting/collection impacts for the Commonwealth.
  • Legal risks: state digital advertising taxes have been subject to legal and policy challenges in other jurisdictions (noting precedent risk rather than predicting outcome).

Procedural status & timeline (from provided actions)

  • Filed / presented: Jan 15, 2025 (Senate Docket No. 1090 / Senate No. 2017).
  • Referred to Judiciary (Jan 14–15, 2025); Attorney‑General opinion requested; opinion referred back to Judiciary.
  • Read twice and referred to Committee on Finance: June 10, 2025.
  • Hearing scheduled: Oct 28, 2025 (1:00–5:00 PM, B‑2).
  • Current status in packet: “OPINION REFERRED TO JUDICIARY” (some actions in the provided list appear duplicated or inconsistent).

If you want, I can:
- Produce a red‑lined list of drafting ambiguities and suggested clarifications (thresholds, nexus, rate schedule).
- Estimate potential revenue or model impacts for common business types (would require additional data).

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

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