Massachusetts Supreme Judicial Court Rules Millionaire Tax Unconstitutional

Posted on June 18, 2018December 12, 2019

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.

About the Author

Richard Weiner, CPA, MST

Rich has over 30 years of broad tax experience with a specialty in tax planning and consulting for private and publicly-held businesses. Rich has specific expertise in the Software, Bio-Technology, Medical Device, Life Science, Manufacturing, Retail, Professional Service and Publishing industries, as well as U.S. aspects of international taxation. He works extensively with European companies expanding into the U.S. market. Additional areas of focus include companies and stockholders in transition, including structuring of and planning for Mergers & Acquisitions, planning for changes in ownership and management, and adoption of tax methodologies with a view toward the long term. He is well known in his field and is a frequent speaker on a variety of tax related topics.