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S 2035

Relates to distinctive plates for medal of honor recipients

2025 Regular Session Introduced by Peter Oberacker and 2 co-sponsors

Massachusetts would disallow the IRC 162(a) deduction for direct-to-consumer drug advertising, increasing taxable income and boosting state corporate tax receipts.

REFERRED TO TRANSPORTATION
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Bill Summary · S 2035

Summary — S.2035 (filed as Senate Docket No. 2307)

Title (text): An Act to eliminate the tax deduction for direct-to-consumer pharmaceutical marketing
Note: the bill text provided addresses state tax treatment of pharmaceutical advertising; an earlier short title shown elsewhere (“distinctive plates for medal of honor recipients”) appears to be unrelated. This summary follows the bill text on eliminating a tax deduction for direct‑to‑consumer pharmaceutical marketing.

Main purpose

S.2035 would remove a state corporate tax deduction for expenses that pharmaceutical firms incur to market prescription drugs and devices directly to patients in Massachusetts. The stated effect is to deny the tax benefit (a deduction under Internal Revenue Code section 162(a), as applied in state law) for direct‑to‑consumer (DTC) advertising expenses, increasing the taxable net income of affected firms for Massachusetts tax purposes.

Key provisions

  • Amends Section 1 of Chapter 63 of the Massachusetts General Laws (definition of “net income”):
    • Replaces existing items (e) and (f) and inserts a new item (g).
    • Item (g) disallows the deduction described in IRC section 162(a) “to the extent that this deduction applies to direct consumer advertising of prescription drugs,” defined to include:
    • All direct and indirect costs related to advertising prescription drugs and devices to patients in Massachusetts, including media advertising, coupons, outreach and persistency programs, and other marketing directed to persons other than licensed prescribers.
    • For national or regional programs, the disallowed amount is the pro rata (ratable) share of expenses directed to Massachusetts residents.

Who would be affected

  • Primary: Pharmaceutical manufacturers and companies that market prescription drugs and medical devices and currently deduct DTC advertising/marketing expenses for Massachusetts tax purposes.
  • Secondary: Marketing and advertising agencies, coupon and patient‑aid program administrators, and other vendors whose costs are borne by manufacturers.
  • Government: Massachusetts Department of Revenue (enforcement/administration) and state tax revenues (expected increase in corporate tax base; no revenue estimate in the bill text).

Potential impacts (anticipated)

  • Increases taxable net income for affected companies operating in Massachusetts, likely increasing state corporate excise tax revenues.
  • May reduce incentive for firms to spend on DTC advertising or prompt restructuring of marketing strategies (national vs. localized programs) to manage tax exposure.
  • Possible indirect effects on patient coupon programs or outreach efforts if firms adjust spending; the bill does not directly regulate advertising content or patient access.

Legislative status and timeline (as provided)

  • Filed as Senate Docket No. 2307 (filed 1/17/2025 per docket header).
  • Introduced in the Senate (dates in record include 1/17/2025 and 6/11/2025).
  • Referred to various committees in the available record (Transportation; Revenue; Health, Education, Labor, and Pensions). A hearing is listed for 10/28/2025 (1:00–5:00 PM in B‑2).
  • Current status shown as: REFERRED TO TRANSPORTATION (records show multiple committee referrals and actions; readers should consult the official legislative docket for the latest status).

Related/companion measures

  • Companion bill: A.4657 (listed).
  • Multiple related bills from prior sessions and other docket numbers are noted in the record.

For precise legislative status, fiscal estimates, and committee reports, consult the official Massachusetts legislative website or the bill’s docket entry.

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

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