Bill
S 2087
The bill phases the short-term capital gains tax in Massachusetts from 8.5% down to 6.84% in year 1, 5.18% in year 2, and 5% in year 3.
Status
- Bill number: S 2087
- Introduced: June 17, 2025 (Senate)
- Current referral: Listed as REFERRED TO AGRICULTURE (record shows multiple committee referrals in available actions)
- Other procedural notes (from record): read twice and referred to committee (6/17/2025); referred to Revenue (2/27/2025); House concurred (2/27/2025); hearings scheduled/updated for 10/03/2025. (Records include some inconsistent entries; see “Notes” below.)
Purpose and intent
- The bill seeks to lower the statutory short‑term capital gains tax rate set in Section 8 of Chapter 50 of the Acts of 2023. The stated policy aim is to make Massachusetts more competitive by reducing the tax rate applied to short‑term capital gains.
Key provisions
- Amend Section 8 of Chapter 50 of the Acts of 2023 by replacing each occurrence of the term “8.5 percent” with the following phased rates:
- Section 1: replaces “8.5 percent” with “6.84 percent.” Effective for the fiscal year immediately following passage of the act.
- Section 2: replaces “8.5 percent” with “5.18 percent.” Effective for the fiscal year one year after passage of the act.
- Section 3: replaces “8.5 percent” with “5 percent.” Effective for the fiscal year two years after passage of the act.
- Effectively, the bill phases the short‑term capital gains rate down from 8.5% to 6.84% (year 1), then to 5.18% (year 2), and then to 5.00% (year 3).
Who would be affected
- Massachusetts taxpayers subject to the short‑term capital gains provision in Section 8 of Chapter 50 of the Acts of 2023 — i.e., individuals and entities realizing short‑term capital gains that are taxed under that statutory provision.
- State revenue and budget officials (because of changed tax receipts).
- Financial services, investment managers, and labor/compensation arrangements that create short‑term gain realizations may see behavioral effects.
Potential impacts and considerations
- Revenue impact: The phased reductions would lower tax receipts from short‑term capital gains relative to the 8.5% baseline; the bill text contains no revenue estimates or offsets.
- Competitiveness/behavioral effects: Lowering the rate is intended to make the state more attractive for investment and trading activity and could change timing and structuring of transactions.
- Distributional effects: Short‑term capital gains are often realized by higher‑income taxpayers; the bill would primarily benefit those realizing such gains.
- Administrative: Changes are limited to substituting rate figures in existing statute; implementation timing is tied to fiscal years as specified.
Procedural/timeline details
- Phase‑in schedule is explicit: first reduced rate takes effect the fiscal year after enactment; subsequent reductions take effect in the second and third fiscal years after enactment, respectively.
- As of the provided record, the bill has been introduced and referred to committees; a hearing was scheduled for 10/03/2025 (records list multiple committee referrals—Revenue, Agriculture, and Foreign Relations—suggesting possible data inconsistencies in the procedural log).
Related items and sponsors
- Related/replaced bills listed: SD 292 (replaces), S 8386 (prior‑session), A 91 (companion).
- Sponsors listed in the provided record include several federal legislators; note that the bill text and caption identify this as a Massachusetts state bill (presented by state Senator Bruce E. Tarr). The sponsors list may reflect inconsistent or merged data from other jurisdictions.
Notes / Data caveats
- The public record provided contains inconsistencies (e.g., a title about beverage labeling vs. the text about short‑term capital gains; sponsor list including U.S. Senators while the bill is framed as a Massachusetts state act). This summary focuses on the bill text as provided, which amends the short‑term capital gains rate in Chapter 50 of the Acts of 2023. If you want, I can reconcile procedural/sponsor discrepancies or search for official legislative web pages for S.2087 to confirm status and fiscal estimates.
Compiled from official sources — confirm details with the bill’s official record.
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