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S 740

Requires retail worker employers to develop and implement programs to prevent workplace violence

2025 Regular Session Introduced by Jessica Ramos

Exempts CD interest earned at Massachusetts banks from Massachusetts personal income tax, removing it from Chapter 62 taxable income; affects depositors, banks, and state revenue.

SIGNED CHAP.72
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Bill Summary · S 740

Summary — S.740 (Chapter 72 of 2025)

Important note: the bill title provided with the request (“Requires retail worker employers to develop and implement programs to prevent workplace violence”) does not match the bill text and legislative docket. The bill text and enacted law S.740 (Chapter 72 of the Acts of 2025) concern certificate of deposit (CD) interest income and state income taxation. This summary follows the bill text and enacted law.

Purpose

To exempt interest earned on certificates of deposit (CDs) held at Massachusetts-chartered banks from the taxable income provisions of Massachusetts personal income tax law (chapter 62).

Key provision (exact inserted language)

The act amends Section 71 of Chapter 171 of the General Laws by adding to subsection (o) the following sentence:

"Notwithstanding any general or special law to the contrary, certificate of deposit interest income earned at any Massachusetts bank as defined in chapter 167, shall not be subject to the taxable income requirements of chapter 62."

What the bill does

  • Creates a state-level tax exemption for CD interest income earned at banks that meet the statutory definition of a Massachusetts bank under chapter 167.
  • Removes such CD interest from the computation of taxable income under Massachusetts chapter 62 (the Commonwealth’s personal income tax law).

Who is affected

  • Depositors receiving CD interest from Massachusetts-chartered banks: they would not include that interest in Massachusetts taxable income.
  • Massachusetts-chartered banks: potential competitive advantage in attracting CD deposits.
  • Commonwealth of Massachusetts: state income tax base may be reduced, with potential revenue impacts.

Notes on scope/limits:
- The text references Massachusetts banks as defined in chapter 167; interest on CDs at out-of-state or non‑Massachusetts‑chartered institutions appears outside this exemption.
- The law addresses Massachusetts taxable income (state tax). Federal tax treatment of CD interest is not changed by this law.
- The effect on nonresidents or part-year residents depends on existing chapter 62 sourcing and residency rules; the statute broadly removes the CD interest from chapter 62’s taxable income calculation but does not explicitly limit by taxpayer residency.

Procedural history / status

  • Filed in Massachusetts Senate (Senate Docket) 1/17/2025.
  • Passed both chambers in early February 2025.
  • Delivered to Governor: 2025-02-12.
  • Signed into law as Chapter 72: 2025-02-14 — now in effect as enacted (effective upon signing unless the act specifies otherwise).

Potential impacts and considerations

  • Fiscal: likely reduction in state income tax receipts proportional to CD interest amounts held at Massachusetts banks; the exact fiscal impact would depend on aggregate CD holdings and interest rates.
  • Behavioral: may encourage depositors to place CDs with Massachusetts-chartered banks and could help retain capital locally.
  • Implementation: tax forms/instructions and Department of Revenue guidance will need updating to reflect the exemption and to advise taxpayers and banks on reporting.

Related measures

  • Companion/related bill identifiers were listed in the source (A1678, HR 1886, SD 2565).

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

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