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Massachusetts Supreme Judicial Court Rules Millionaire Tax Unconstitutional

AAFCPAs would like to make clients aware that a proposed ballot question seeking to impose a 4% surtax on Massachusetts individuals on the portion of taxable income exceeding $1 million has been ruled unconstitutional by the Massachusetts Supreme Judicial Court (SJC). Individuals with income below this threshold were not to be affected.

The proposed ballot question was linked to a specific allocation of how the funds raised by this provision were to be used (education and transportation). According to the SJC, placing multiple subjects in a single ballot question is unconstitutional under State law, unless they are “mutually dependent.”

The Massachusetts constitution specifically bars the imposition of graduated tax rates; making a change requires passage by the voters. The question has been placed on ballots a number of times in prior years and been voted down.

More details regarding the SJC’s decision will be forthcoming, and today’s news does not prevent the question’s sponsors from seeking to place a rewritten version on the ballot in future years.

The tax practice of AAFCPAs will continue to monitor the initiative and keep you informed as significant changes occur. If you have any questions on how this decision may impact you, please contact your AAFCPAs partner, or Richard Weiner, CPA, MST at 774.512.4078, rweiner@nullaafcpa.com.