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2025-2026 Regular Session Introduced by Wendell Gilliard

Allows municipalities to levy a locally set tax on owners of underutilized enclosed shopping malls to boost municipal revenue.

Referred to Committee on Education and Public Works

Summary: H.3240 An Act relative to shopping malls

Overview

House Bill 3240 proposes a local option tax on owners of enclosed shopping malls. The bill would add new Section 5P to Chapter 59 of the General Laws, allowing municipalities to levy a mall owner tax if certain occupancy and property-use conditions are met and the municipality approves the section through the local option process. The aim is to provide municipalities a revenue tool targeting underperforming enclosed shopping malls.

Key Provisions

Definition: “Enclosed shopping mall” is defined as an enclosed indoor center containing common areas, retail businesses, service businesses, and other commercial spaces.

Local Option Tax: A municipality that approves this section under the local-option process (manner provided in section 4 of chapter 4) may levy a tax on the owner of an enclosed shopping mall.

Tax Rate: The rate of the tax is to be determined by the municipality.

Conditions for Taxation: An owner of an enclosed mall would be liable for the tax if at least two conditions are met: 1) The mall has less than a 67 percent occupancy rate for its available retail spaces for a continuous period of at least 9 months. 2) The mall does not convert at least a specified proportion of its property to other uses (to be determined by the municipality, for lease or sale).

Administration: The bill specifies that the tax is levied on the mall owner, with the exact rate and conversion-proportion thresholds left to local determination.

Affected Parties

Mall Owners: Potential tax liability when the occupancy threshold is unmet and conversion thresholds are not reached, subject to local adoption and rate setting.

Municipalities: Given authority to adopt and administer the local option mall tax, including setting the rate and conversion thresholds.

Tenants/Leaseholders: Indirectly affected through potential changes in lease economics or ownership strategies to meet occupancy or reuse thresholds.

Procedural and Timeline Aspects

Introduced: February 27, 2025.

Legislative Path: Referred to the Committee on Revenue; Senate concurred on February 27, 2025.

Hearing Schedule: A hearing is scheduled for July 15, 2025, 10:00 AM–1:00 PM in hearing room A-1.

Related Bill: HD 3135 is listed as replacing or related to this measure.

Notes

The bill would insert the new Section 5P into Chapter 59 after Section 5O.

Many specifics (e.g., exact tax rate, conversion proportion threshold) are left to local determination, reflecting a local-option framework rather than a statewide standard.

The proposal targets “enclosed” shopping malls with low occupancy and limited conversion to other uses, aiming to bolster municipal revenues from underutilized retail properties.