Legal Groups Ready to Defend Tax Exemption Law

Aug. 22, 2022… to be ready to ask the state courts to intervene.

“Taxpayers stood up,” Dan Winslow, a former judge, Romney staffer and state attorney who now heads the New England Legal Foundation, said Monday.

A 1986 ballot question introduced by Citizens for Limited Taxation and its subsequent legislation, Chapter 62F, created an annual state tax limit based on the growth of the gross wages and salaries of Massachusetts citizens. If the government collects more tax revenue than is allowed in any fiscal year, the law says that the money will be returned to the taxpayers. The revelation in late July that 62F could eat up some of the state’s additional $5-plus billion from the 2022 budget derailed the Legislature’s tax relief plan and a massive economic development bill.

The law allows a group of at least 24 “taxpayers” in Massachusetts to ask the Supreme Court or the Supreme Court to uphold the provisions of Chapter 62F, and two similar efforts are moving forward if officials try. to avoid the requirements of the law.

“We know that the auditor is receiving political pressure to delay the approval in the assumption that the Legislature will repeal the law when it comes back to the topic of the new section and there is a question that the Legislature will come. to repeal the law as part of another package,” Winslow said at a press conference on Monday announcing that the Massachusetts Fiscal The Alliance, the Fiscal Alliance Foundation and Citizens for Limited Taxation partnered with the New England Legal Foundation and the Goldwater Institute. preparing to bring the necessary enforcement Chapter 62F.

The revenue commissioner is required by September 1 to submit to the state auditors a report of state tax revenue and state tax revenue for the fiscal year that ended on June 30. By the third Tuesday of September – Sept. 20 this year. – the auditor must “self-assess” whether tax collections exceeded the authorized amount and notify the executive branch, the House and the Senate of the amount. The auditor’s determination “shall be conclusive,” the law says.

There has been no indication from Auditor Suzanne Bump that she intends to withdraw from the deadline and her office has said it cannot prepare its report until it receives the necessary information from the DOR. But lawmakers, particularly House Speaker Ronald Mariano, have said they may try to amend Title 62F in a different way. Mariano, too, called 62F “the law of the land and it will be done.”

Republican Anthony Amore candidate he announced on Aug. 4 that they have lined up at least 24 taxpayers “who are ready to file a petition in the state’s supreme court if Auditor Suzanne Bump fails to act quickly in confirming billions of dollars in tax refunds under the state law Chapter 62F.”

On Monday, Amore announced that former US Attorney Michael Sullivan would provide legal advice on his tax appeals. Sullivan and Winslow ran against each other (and both faced Gabriel Gomez) in the 2013 Republican primary for the US Senate seat that John Kerry resigned from.

“With rising prices straining the budgets of working families, I share Anthony’s belief that our government must respect the choice of voters across the Commonwealth to get tax checks into the hands of the people,” said Sullivan, the father of Rep. Alyson. Sullivan, he said. “If the State Auditor does not do his job and move quickly and accurately in issuing these certificates, our union will file a lawsuit in the Supreme Court.”

The current group of more than 24 people lined up as plaintiffs includes people from every state in Massachusetts and is made up of representatives from Citizens for Limited Taxation, Mass Fiscal, the Beacon Hill Institute, the local chapter of the National Federation of Independent Businesses, and Mass. High Technology Council.

“While we expect the auditor to continue to enforce certification requirements, taxpayers have pledged to meet the demands of Massachusetts voters in an effort to strengthen the most important and reliable financial protections, requiring state compliance,” MassFiscal said. Press release. “When it becomes clear that Massachusetts officials intend to ignore the requirements of Title 62F, taxpayers have pledged to follow the will of Massachusetts voters in an effort to pursue the most important and guaranteed protections of the law.”

Chip Ford, head of Citizens for Limited Taxation, said Monday that the difference between Amore’s efforts and the ones he’s working with “is. [that] Ours is made up of early supporters, the first organizations that went to the polls in 1986, put it on the ballot, ran the campaign, and won the tax and tax repeal. And that is Citizens for Limited Taxation, my organization, and Mass. High Tech Council.”

Paul Craney, a spokesman for Mass Fiscal, said the group wanted to hold its press conference on Monday because it was a month away from when it could expect to file a lawsuit if necessary.

Winslow said his organization is interested in knowing that the benefits provided by Chapter 62F “may already be in the hands of eligible taxpayers” regardless of attempts to change the law.

“There is a big question whether this could have been done legally,” he said. Winslow added later, “Actually, what’s left at this point is what we call the ministry. It’s just like a certificate of recognition because the end of the fiscal year was June 30 and the provisions of the law were already in place.”

Chapter 62F also requires that the auditor’s determination that the total income of the state tax exceeds the authorized amount “shall result in a credit equal to the amount of that amount” and that “the credit shall be applied to the current tax of all persons. taxpayers in proportion to their income tax liabilities.” they pay all taxes in the year after that.

But maybe that’s not how things work. The Baker administration has been working quietly behind the scenes to change the laws surrounding Chapter 62F since the spring and his budget chief said when the 36-year-old law was affected by the 2022 fiscal year he was known to be “looking ahead.” it’s the quickest and most efficient way to get that money back to the taxpayers.” Baker said two weeks ago that he is “waiting[s] for people to get their money back sometime between the end of November and the beginning of December,” which may not be the same as a personal tax credit but will mean that the money will be out before they leave.

At a press conference on Monday, representatives of some of the groups prepared for a trial to ensure that Chapter 62F is followed to the letter of the law did not express strong opinions in different ways about how the money is returned to the taxpayers and gave an opinion. will be open to amendments to the Rules in 62F.

“If the law were to change to directly refund money instead of paying future taxes, you know, as long as the law is being followed, that’s our interest,” Winslow said. He then added: “We are careful that the law on the books is followed…

Ford, who was on the 1986 ballot, said Citizens for Limited Taxation had to make sure their proposal didn’t cost money, otherwise it would be seen as unconstitutional and wouldn’t be voted on.

“So we used the word credit. We didn’t use it in the legal sense that it could be repaid as a tax credit in future years, even though that’s how it was defined in 1987,” he said.

The only time a surplus was hit, in 1987, $29.22 million was provided to taxpayers through the extension of the 1987 Massachusetts tax line “in which each taxpayer could file his or her own personal assessment of the $29,221,675 debt,” the auditor’s office said.

The DOR later this year began the process of repealing the rule that governs how a taxpayer gets a credit on income taxes under Title 62F that the agency says is “outdated” because no credit has been required since 1987.

The Executive Office of Administration and Finance said on Monday that the law could not be legally repealed. Baker’s administration has previously said that the DOR will “issue appropriate guidance or regulations to implement this year” if Title 62F is triggered.