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SD 2721

Tax Expenditure Review Commission 2025 Report

194th Legislature (2025-2026)

Massachusetts creates commission to evaluate all state tax breaks and credits for fiscal impact and effectiveness, potentially identifying billions in unused or inefficient tax provisions.

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Bill Summary · SD 2721

Legislative bill overview

SD 2721 establishes a Tax Expenditure Review Commission tasked with comprehensively evaluating Massachusetts' tax expenditures (tax breaks, credits, deductions, and exemptions) during 2025. The commission would assess the fiscal impact, effectiveness, and alignment with state policy objectives of these tax provisions, then report findings to the legislature.

Why is this important

Tax expenditures represent foregone state revenue—essentially public spending through the tax code rather than direct appropriations. Massachusetts has accumulated numerous tax breaks over decades without systematic evaluation of whether they achieve their intended purposes or remain cost-effective. This review could identify billions in unused, inefficient, or duplicative provisions, informing future budget and tax policy decisions.

Potential points of contention

  • Business community resistance: Companies and industries benefiting from existing tax breaks may lobby against provisions that could lead to elimination or reduction of their preferred tax expenditures
  • Revenue versus equity trade-offs: Eliminating tax expenditures increases state revenue but may increase taxes on particular groups or sectors, creating winners and losers in policy reform
  • Implementation scope and resources: Conducting a comprehensive tax expenditure review requires significant staff expertise and funding; disagreement may arise over which expenditures to evaluate first or how rigorously to assess them

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

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