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Bill

SD 3752

Tax Expenditure Review Commission Updated 2026 Report

194th Legislature (2025-2026)

Establishes commission to audit Massachusetts tax breaks' fiscal impact and effectiveness, producing recommendations to potentially recover billions in foregone state revenue.

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Bill Summary · SD 3752

Legislative bill overview

SD 3752 establishes a Tax Expenditure Review Commission tasked with examining and reporting on tax expenditures (foregone tax revenue through credits, deductions, exemptions, and preferential rates) in Massachusetts. The bill requires the commission to produce an updated 2026 report analyzing the fiscal impact and effectiveness of existing tax expenditures, with recommendations for reform or elimination.

Why is this important

Tax expenditures represent significant foregone state revenue—often exceeding billions annually—yet typically receive less scrutiny than direct spending. By systematically reviewing these provisions, the commission could identify inefficient or outdated tax breaks, inform budget debates, and help policymakers understand the true cost of tax policy decisions that benefit specific industries, taxpayers, or activities.

Potential points of contention

  • Business lobbying pressure: Industries benefiting from existing tax expenditures (real estate, manufacturing, nonprofits, etc.) may oppose recommendations to eliminate or reduce favorable tax treatment
  • Defining "effectiveness": Determining whether a tax expenditure achieves its intended policy goal is complex and politically contentious; different stakeholders may dispute measurement methodology
  • Revenue implications: Recommendations to eliminate tax breaks could be framed as tax increases by opponents, creating political resistance despite their characterization as closing loopholes

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

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