2023-09-12 00:00:00 - Joint Committee on Revenue
2023-09-12 00:00:00 - Joint Committee on Revenue
SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Good morning. Trying to call this, joint committee on revenue here into a order. My name is Mark Kuzak. I'm in the house here. We are joined virtually by my senate coach here, Senator Sue Moran, an in person by representatives, Brandi Plucar Oakley in Francisco Paulino. We have a little bit over 60 bills today and over 30 people signed up, so please bear with us, and we that you do keep your testimony to 3 minutes. And as is tradition here at the state has to take our colleagues out of order, I will first call up Senator Keenan.
SEN KEENAN - SB 1848 - Good morning. Thank you, Mr. Chair and and, Madam Chair, members of the committee. I appreciate the opportunity to testify before you today. Just following up on Senate Bill which is an act protecting youth from nicotine addiction, and Representative Decker has a companion Bill, which is Health 2763. So sent a channel along to a champion of this issue who had filed this legislation in the past, and I was proud to file it for the first time this session. I want to83 thank83 Representative Lewis Senator Lewis and Senator Comic for co-sponsoring this. Obviously,88 rep Decker for her work on this. These people have some pretty important revenue costs94 and public health benefits regarding revenue The bill if enacted, would bring in more funds to the Commonwealth and tax payments. If it's enacted, it will reduce healthcare costs as well. So in terms of revenues, the increased revenues would result from an increase in the excise tax on cigarettes from $3.51 per pack to $4.51. Additionally, the Bill would raise tax on cigars from 40 percent of wholesale to 80% of wholesale. That's what it means in terms of revenues. In terms of the cost side, whenever your history is shown whenever there's an increase in taxes on nicotine products, there is139 you know, that original revenue that comes in, but then there's also the143 goal of reducing the negative impacts of these products and that often results in lower usage. That's where the cost becomes more con 1 because what is saved ultimately and health care costs are pretty dramatic. The center's disease control estimates the annual healthcare costs of tobacco exceed $4,000,000,000 anyway, with about 30% of the figure coming from state Medicaid expenditures. So the goal would be to reduce the use reduce exposure, tobacco, reduce exposure to nicotine, and the positive effect on public health ultimately will result in realized savings from the Commonwealth. I don't want to, lead the committee with the impression that this bill would realize all of these savings, meaning that we would no longer need, Medicaid, for instance, But I do assert that increasing the cost of the product will decrease its usage.
In this case, it would make cigarettes and cigars less affordable and, particularly, of concern of mine, that works to make it less appealing to young people. To maximize these savings, I have pushed and will continue to advocate for boosting our anti-smoking budget line item. We have done great work with that line212 item. Applied a COVID. We saw some very encouraging decreases216 in the use of nicotine products. COVID I believe stalled that decline. And, so we can't lose our focus now that COVID is over. We have to renew our focus on making sure that these products are not available to our young people and to people in general. I know that the committee concerns236 itself with fees, revenues, and taxes. I would be remiss to ignore the important public health benefits, as I say, that would result from, this passage. So while you are concerned about what's our increase in revenue going to be initially, what will a loss of revenue be as less of the product is used? Again, all that has to be viewed in the context of the cost savings from a public health perspective.260 We continue our fight262 against tobacco use particularly as it's targeted to young people. We've made a great deal of progress, but much more work remains. We have to make sure that we continue to work on this, meaningful reductions in the number of people addicted to these cosinogenetic products has been should be, a goal. So Senate 184 would help the Commonwealth improve its bottom line. And protect the health of all who buy or might buy tobacco here. It's my respectful request289 if they will report. I appreciate291 your consideration. Thank you for it. And if you have any questions, I'd293 be293 happy293 to293 answer.293 SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - You, Senator. Any comments or questions from the committee? Seeing none. Thank you. Great.
SPEAKER2 - Thank you very much.
SPEAKER3 - Have a
SPEAKER2 - great day.
SPEAKER1 - Joining us virtually representative of Cruz
REP CRUZ - SB 1848 - Good morning, Mr Chairman. Madam Chair, good to be with you, and honorable members of the joint committee on314 revenue. I thank you316 for this opportunity to be able to speak and support today's legislation that I filed, with respect to establishing, the bilingual educator workforce here in our commonwealth This particular Bill was crafted, with colleagues of mine from Across the State. I worked with the Massachusetts Association of bilingual educators, and several, superintendents. My former colleagues at Latino's for Education, and a number of different advocates in the bilingual educator workforce. This Bill appears before you all in revenue, as a result of one of the key provisions in the Bill, which would establish, a bilingual educator, trust fund, which would be aimed at, funding, some of the key initiatives and provisions of the Bill, by providing an excise tax on cannabis products and on sports betting. I wanted to note for the record, that in the formalization of this Bill, our coalition was really agnostic to the percentages, and, on our part, we're really, more concerned with, the key initiatives that would be established under this particular legislation. We view these numbers as, placeholders, but essentially, the genesis of this legislation goes back to the passage of the Look Act391 which391 members of this body played an instrumental role, in passing, and one of the key components that, was left to be done was the work that was necessary to diversify our educator workforce. So this Bill serves as a complementary Bill to the Educator Diversity Act, and it does a few things that are more focused on, the bilingual educator workforce to ensure that we have linguistic and cultural diversity, within our school districts So this particular legislation does everything from, ensuring that we're using an inclusive terminology, by more uniformly, transitioning, references to English language learners, to multilingual learners, and additionally removes deficit language, from chapter 71a, regarding, multilingualism.436 Additionally, this particular bill would use the funding from an established bilingual educator trust fund to be able to address the teacher shortages by creating new, avenues for additional compensation to effectively end what is known as the contacts in which our educators of color, who speak multiple languages are often, taxed with the, the burden of having to provide translation and interpretation services outside of the regular duties without compensation. And so this particular bill would establish an incentive program.468
That would encourage our bilingual educators to pursue, state-approved, bilingual education certification, and provide them with a $5000, stipend, for doing so. And then additionally, if they meet other requirements, and become deemed bilingual, or have had the seal of literacy and served, for a number of years, the total compensation that an educator could add would be approximately $17,000, additional compensation. And then lastly, this particular bill would also tackle the retention issue. By ensuring that these educators who do become certified bilingual educators would be eligible for, educational debt relief as well. So after 10 years of service and a certified bilingual education program, they've received up to $30,000, in518 debt forgiveness, from the state and this is really important as we think about the investments that have been made, following the look act between the Student Opportunity Act, as well, because this the, the issue has been that there's been a lack of adoption, in districts with respect to true dual language programs, which would serve our multilingual learners and coming out of this pandemic, knowing what the research has about dual language programs, they are the most effective strategies, for ensuring, that our students are reaching a stage of adoption with respect to, multilingualism, literacy, and we'd be able to expand many of the dual language programs that currently exist, beyond, our gateway cities or the highest incident districts for English. This is the summary that I provided you with this legislation. It's imperative as we think about literacy rates amongst our English language learners and the continuing decline when it comes to their academic, performance. So I respectfully request that the members of the joint committee on revenue consider a favorable report, and happy to answer any questions. Thank you. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you. Representative. Any comments or questions from the committee?
See you none. Thank you.
Allison Perone from the American Heart Association.
Thank you
ALLISON PARIN - SB 1861 -HB 2859 - SB 1848 - Thank you so much. Chair Cusack and Chair Moran who I think is virtual, are members of the committee. My name is Allison Parin Drag. I'm with the American Heart Association, and we're here to actually support a couple of Bills today. I'll first start with House Bill 2859, and Senate Bill 1861, a tiered excise tax on sugary drinks. We believe that every child deserves to grow up healthy, which means promoting healthy drinks. On average kids drink more than 30 gallons of sugary drinks a year, it's more than enough to fill a bathtub consuming sugary drinks has children for a lifetime of health challenges. We need to make healthy drinks more accessible and more available in places where kids and families spend their time.641 Well, some people know that sugary drinks are not good for them. They may not realize the extent of the harmful health outcomes associated with the product. Sugar drinks are a major contributor to the increasing rates of type 2 diabetes, sput decay, and heart disease. These diseases have a devastating impact on the lives of those affected in their families and set up children for a lifetime of health challenges.
Parents mentioned doing what's best for their children. When healthy drinks or foods are not nearby or when sugar drinks at local stores are less668 expensive than healthy drinks, It makes it harder for parents to make healthy choices for672 their kids. Money from a sugary drink tax and674 put resources to the community's hard-to-sit-by sugary drink-related diseases. Bonds could be used to address what's important to the community. Several cities in the Navajo Nation have adopted Sugar drink taxes and results from these show that sugared drink taxes do help reduce purchases. We need to remember a sugared drink tax is the choice tax, meaning that no one is required to pay it. If you choose not to purchase their products, you do not pay the tax. Taxes697 on sugar drinks are a699 proven699 way to reduce purchases of these drinks. For similar reasons, we're here to support House Bill 2673 and Senate Bill 1848, an increase in the tobacco excise tax. I won't repeat what Senator Keenan said because he explained They'll, great and you don't need to hear more of that. But we have not done, an increase on a tobacco tax for a decade.718 Cigarette smoking remains a leading cause of preventable disease and death. Tobacco costs the US economy more than 300,000,000,000 annually. And just like sugary drink taxes, tobacco taxes are a choice tax. Don't use a product and you won't pay the tax. A733 significant increase in tobacco excise taxes reduces tobacco use, saves lives, raises revenue, and lowers healthcare costs. It's a win739 win win. Thank you. Happy to take any questions. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - You, Allison. Any comments or questions for my committee? January, thank you. And we're joined by our host vice chair representative Lindsey David. And, virtually, I believe we have a representative of what's with us as well, man. We've heard on Ed Noonan from United Rentals. Good.
ED NOONAN - UNITED RENTALS - HB 2753 - Good morning, Mr. Chair. Chair Kuzak and Chair Moran are members of the committee. My name is Ed Noonan. I'm with United Rentals. We784 have a significant presence here in Massachusetts. Operating 21 rental locations and employing approximately 550 dedicated and highly regarded employees. We have a significant rental fleet investment supporting the industrial community, and I'm here today speaking in support of House Bill 2753. Massachusetts provides a pass-through sales tax exemption to contractors for equipment they rent for use on DAP sites or exempt tax entities. In order to obtain the exemption, They must provide a significant amount of information816 to the retailer, including a form ST 5 c,818 which is signed by both the contractor and the representative of the exempt organization which is referred to as a second signature. This process is administratively burdensome for all parties involved831 in the exemption validation process. A significant amount of information required to the exam obtain the exemption certificate, including837 the second signature requirement, has led to a high number of exempt requests regularly being denied due to incomplete or missing information. This in turn can lead to long delays in processing those exemption certificates. This problem has been exacerbated as a result of853 COVID-19 as many people continue to work remotely and away from the office. House Bill 2753 streamlines the861 exemption validation process by lessening the administrative burdens on contractors along with removing the second signature requirement. This administrative change will allow for a more efficient exemption request process while maintaining adequate safeguards for the state to ensure compliance. I want to thank Chair Cusak for sponsoring this bill and thank you for your time today. Urged your support in passing House Bill 2753, and I'm happy to answer any questions. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - How much are questions from your committee? See you, none. Actually, I like its chances.
Next up is a panel. Sean Collins, Russorina, and Chris Wielenberg.
SPEAKER7 - Hey. Good afternoon. Can you hear me,
SPEAKER1 - Mister Cameron? I can.
SEAN COLLINS - AIRCRAFT OWNERS & PILOTS ASSOCIATION - SB 1758 - HB 2826 - Alright. And bear with me here. I apologize. I'm testifying virtually from a conference in Arkansas. But, good morning, everyone. Chairpersons representative Cusack, Senator Moran, and members of the joint committee. Thank you for the opportunity to testify before you today. My name is Sean Collins, and I am the Eastern Regional Manager for the Aircraft Owners and Pilots Association. We are the world's largest aviation membership organization representing the general aviation interests of more than 300,000 aircraft owners and pilots across the country. Including nearly 5000 in the Commonwealth of Massachusetts. On behalf of these members, AOPA opposes Senate Bill 1758 and House Bill 2826 acts relative to the repeal of the sales tax exemption for aircraft. With that, I would like to acknowledge that today, Massachusetts sets the standard for success in the general aviation industry in New England by contributing nearly 200,000 jobs providing over 7,000,000,000 in annual payroll, and generating a total annual economic impact of $25,000,000,000 according to Massachusetts Department of Transportation. Services such as medical transport, law enforcement, search and rescue, and flight training operations that comprise much of the aviation activity directly contribute to the quality of life of residents in Massachusetts. The key aspect for you to remember is that general aviation is, of course, a mobile industry.990 Although convenience is a992 chief concern for aircraft owners expense is the principal motivator in a decision on where to base an aircraft.
I refer you to the map that we submitted along with our written testimony that illustrates how there are multiple geographically close options available to owners, Connecticut, Rhode Island, New York, Vermont, New Hampshire, and Maine all provide the same or similar, text incentives. To their aviation industries. They do so because those states that experience the broadest range of industry growth employ a comprehensive aviation incentive plan extending to both aircraft and maintenance. This combination attracts the greatest number of aircraft directly supporting businesses and jobs associated with your airports. Why does that matter? Most of Massachusetts airports are either municipal or state-owned and federally obligated to maintain expensive city standards. Therefore, it benefits the local taxpayer for the airports to be as self-sufficient as possible. We achieve that by incentivizing as many aircraft and businesses to base at our airports, our primary revenue sources as we can attract. Because of this, the statewide incentives are important to the airports in Western Massachusetts, such as Pittsfield Municipal as they are at Lawrence Community in the north and New Bedford Regional Airport where I used to be based in the south. For these reasons, AOPA opposes Senate Bill 1758 and House Bill 2826, and I'd be happy to respond to any questions you have. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you. I'll hear from Chris before we get some questions. Chris?
CHRIS WOLLAMBURG -MASS. AIRPORT MANAGEMENT ASSOCIATION - SB 1758 - HB 2826 - Alright. Thank you, Chair Cusack, Chairman Moran, and members of the joint committee. Of revenue. My name is Chris Wollamburg. I am the airport manager of Westfield Barnes Regional Airport and currently serving as the vice president of the Massachusetts Airport Management Association. We refer to ourselves as mama. Mama supports the 38 public-use airports across the Commonwealth by working collaboratively with our industry stakeholders to maintain a safe statewide airport system and enhance future growth for our aviation industry. I am1112 testifying today representing Mama as well as West of Barnes Regional Airport to respectfully request this committee's opposition to Senate Bill 1758 and House Bill 2826. And act relative to the repeal of the state sales tax exemption on aircraft. Prior to the early 2000s, Massachusetts had us sales tax on aircraft and aircraft parts, which negatively impacted our industry primarily because neighboring states did not have the tax. With a competitive disadvantage, we're losing aircraft and most importantly, jobs to our neighboring states. Finally, through the efforts of numerous industry stakeholders and the state legislature, the current sales tax exemption on aircraft sales and aircraft parts was enacted in 2003. We have seen the positive impacts of this exemption legislation. In 2019, Mastodon Aeronautics division completed a statewide airport economic impact study that highlights and reinforces the substantial economic benefits of our industry in the commonwealth. Primarily over 200,000 direct and indirect jobs with an economic output of $24,000,000,000 annually are from our industry. Also, our industry generates nearly $1,000,000,000 in aviation-related state taxes to the Commonwealth. Because of this tremendous economic impact on our industry, the FAA Mass Dot Local Municipalities and private industry have invested 1,000,000 dollars to ensure we maintain a safe statewide system of airports and further grow the aviation economic engine in the Commonwealth. One of the criteria for the FAA Airport funding is based on aircraft.
Implementation of these 2 bills will result in fewer big aircraft in Massachusetts and could result in less future funding for our airports. Let's not repeat history by implementing a sales tax on aircraft which will negatively impact our industry economy and income wealth. The 5 other New England region states still don't implement sales taxes on aircraft. At Westfield Parkland's Regional Airport, we have 3 aircraft maintenance repair facilities that have highly technical, good paint jobs, Aero Design Aircraft Services, and 5 employees who work on small propeller-driven aircraft. We have Atlantic Aviation with 15 employees, that work on small, medium-sized business aircraft. We have Gulfstream Aerospace which has 300 employees who work on large long-range business aircraft. Implementation of these two1261 Bills will negatively impact companies like these and many others across the Commonwealth. The economic benefits of our industry are not about the owners of the aircraft. It's about the individuals, the companies, and the thousands of jobs that support aviation and airports throughout the Commonwealth. I sincerely thank the Joint Committee of Revenue for the opportunity to testify today in opposition to Senate Bill 1758 and House Bill 2826. Thank you. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you. Any comments or questions from the committee?
Thank you. Alright. Thanks a good 1. We're joined by Representative K Kat, Representative.
I
SPEAKER9 - was just wondering.
SPEAKER1 - Oops.
I
REP DONAGHUE - CONCERNED CITIZEN - HB 2861 - So, thank you very much for taking me out of turn. I'm here actually to testify on two pieces of legislation. I'd like to testify on the first one, House Bill 2861. First, it's about putting, the excise tax on alcoholic beverages, and I had with me, Professor Jernigan, from the Boston University School of Public Health. So, I think I'm going to hand in my testimony. So maybe I'll give my time to Professor Germane.
DAVID JERNIGAN - CONCERNED CITIZEN - HB 2861 - Thanks. I'm David Jernigan. I'm a professor at the School of Public Health, and I'm testifying as a private citizen today. They have you that they're my own and not the official position of Boston University. I was lucky enough to grow up in Newton. I got a college in work in Massachusetts. Until my mid-twenties, I left and built a career working on alcohol policy all over the country and all over the world. Now that I'm back, I want to give back what I can to my home state. To that end, 18 months ago, I worked with a research assistant to pull together everything we know about alcohol in Massachusetts. I have copies of that report here for you. That report made three findings that are particularly relevant to age 28 61. The first is we have an alcohol problem in Massachusetts. We're among the top 10 states in terms of binge drinking. Close to 5% of the deaths in the commonwealth over 3000 deaths a year caused by alcohol. Second, our alcohol states, that alcohol problems are expensive. In 2010, the last year for which we've got an estimate, the CDC estimated, that the cost of the Massachusetts economy was $5,600,000,000, of which two and a quarter of 1,000,000,000 was paid directly by governments simply adjusted for inflation means that every drink consumed in the Commonwealth, it generates $3.34 in costs. In contrast to that, it's the third piece of steep tax per drink of alcohol is less than a nickel. Our alcohol taxes are way out of date They were last raised when Jimmy Carter was president, and they've lost 72% of their value since then. It's not fair. For the rest of us citizens, taxpayers, and industries alcohol is not carrying its weight. We're all paying for the property damage, service use, law enforcement resources, and lost productivity. That heavy alcohol use brings in its way. We have a chance with this Bill to do a whole lot of good and begin to rectify the state's failure to raise the alcohol taxes in line with inflation that has caused some forms of alcohol, cheaper per drink than soda pop, juice, milk, or water. Greasing alcohol taxes has been recommended by the CDC's task force on community preventive services. The World Health Organization the World Bank, and the Union for International Cancer Control. So I hope you'll join them in recommending this Bill. Thank you, professor. And, I have copies of the report. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - A little longer reach. Thanks. Yeah. Any comments or questions for the community?
SPEAKER9 - Are there any questions?
REP PAULINO - Yes. Thank you for the report. I'm going to read it. I love this country. I've been here for 23 years. I love sitting in my chair or making it to watch a football game. The first thing you can watch is a commercial for the public. It's part of the American culture, like Tailgating, you know, I couldn't wait to move to New1552 York City to drink a hotline and watch a game or go to, a live game, store. It's the teacher. I'm American. I swear to die for this country. So getting a beer and doing a beer with my family is part of I believe he's my friend to be in this country, and I do responsibly, like, most of all Americans believe Massachusetts. Why could I pay more? Because some people don't do it. Why should we pay more taxes? Why would we impose a higher burden for this because it won't be, you know, control itself? I will try to say just because we, boom, we, kids, drink less, No. I don't think the kit will learn something just because we tell them we're gonna tax you more. Tax will not teach kids to control the South. If we want wanna help kids drink glasses to self-control, Taxation is not the choice. If you throw me and it's the test that tells me, taxation,1627 Is not a good way to educate self-control takes months to start in a proper way. Yes. I'll be all up. No, you can ask tax to be a customer. So I agree, responsibly, surge Most of the people must choose to please don't ask me to pay more just because some people cannot control themselves.
JERNIGAN - Thank you for your1654 comments. I'm happy to share with you the research that shows very clearly,1658 actually, that a relatively small increase in the text will reduce young people's1663 consumption. It will also reduce heavy consumption. The last systematic review of this looked at over 1000 estimates of the relationship between pricing and consumption, from 120 peer-reviewed studies and found cons conclusively the research is very clear. That's why the World Health Organization backs this. That's why the World Bank backs this. This is a modest increase. It will raise a lot of money to help services that are badly needed in the Commonwealth most people won't feel it much, but it's enough to make a small change, in consumption. This is why we call these taxes a win win win. They are politically popular every time we pull them. They are, and create revenue for the state and they will depress consumption. I worked on the Maryland tax increase in 2011. That tax increase raised 135,000,000 a year for all sorts of good things, and it reduced youth consumption. It reduced the number of impaired drivers on Maryland roadways. This is the one that's hard for people to believe that actually reduced sexually transmitted disease rates. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Sure.
DONAGHUE- Yes. I also want to thank you for your question because I think you're not alone. I think of people, you know, feeling exactly the way you do. But I think in this case, we're not raising it. It's just a small amount, a few cents, and, this would generate $85,000,000, and it would be put into a substance abuse health protection fund, and the fund would be used can be used, by schools, for example, to educate young people about the use of alcohol and just to educate them really so that they think about it when they when they're drinking. So I just think that it would also help with substance use treatment programs as well. So it's really about education and treatment, and I think we know the number of accidents on the road. We see every day these crashes that are happening. Many of them are due because of alcohol, due to alcohol abuse. So it gets just a small way that's going to, and you wouldn't actually see it. It would come it goes to, the liquor stores that are buying the liquor from the distributor. And, and it's just a few cents. Nothing has changed since 19 70, and it just seems like we need to keep up with the cost of health care, and the cost of the damages that occur, as a result of alcohol. So I'm I'm just hoping I'm happy to talk to you more, outside of here, but just hoping that the committee will really take this into strong consideration. I think it's important. When we think about the billions that we're spending, on health care and criminal justice, and it would just, it's just a small amount that would really be helpful, I think, in terms of, again, education and treatment for folks who can't control themselves and need the help. BRANDY - She both is being here this morning. I just have 2 questions. She may not be able to right now but would love to get the information at some point in time. The first is Professor Jordan. You just mentioned that there were some polling data around the public opinion around this. If you can provide that to the committee or direct me to where in the report that is located. That'd be most helpful. Additionally, this is either for Repcon or a Jorgen since you and your team have done such extensive research on this issue, based on the fact that the revenue from this tax, if approved, would create a fund for services for substance abuse. As you know, the Commonwealth provides extensively for substance abuse programs in our state budget annually, and I'd be curious to know what the decrease would happen if we create this fund and we have this tax that funds those programs, How much less money would be as a state into the annual budget just for me to see where the trade-off and benefit is there would be immensely helpful. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER9 - Good question. We can, we can look into that. I think that that's a good question. Thank you for asking.
SPEAKER1 - Session. Thank you very much.
SPEAKER9 - Okay. Thanks.
SPEAKER1 - And next up is Karen Gucci.
SPEAKER9 - Wait a minute. I have 1 more bill.
SPEAKER1 - Sorry. Sorry.
DONAGHUE - Sorry about that. So I'm actually here to talk about House, 2859 and act to promote healthy alternatives to sugary drinks. So again, thank you to the committee and thank you to the chairs, Chair Cusick and Chair Moran. So I'm, again, grateful for this opportunity to testify before you today on two of these two Bills, but, the first Bill 2859 is an act to promote healthy alternatives to sugary drinks. Filed by Senator Lewis and myself, this Bill establishes a tiered, her own sugary beverage tax that will generate revenue to invest in programs promoting better health outcomes. Under this Bill, drinks will no longer, with little or no sugar are not taxed. Drinks with moderate amounts of sugar are taxed at a low lower rate and drinks with a lot of sugar are taxed at a higher rate. Sugary drinks are the number one source of added sugar in the American diet and are associated with an increased risk of developing two types a two diabetes type two diabetes, obesity, cardiovascular disease, and tooth decay. Furthermore, these drinks have no nutritional value. They do not add necessary nutrients or other benefits to our diets. These drinks are becoming even more prevalent in the everyday diet of Americans. For example, it is recommended that children over the age of two have no more than 2 8-ounce sugary drinks per week. Today, children are exceeding that amount tenfold, increasing chronic diseases in the commonwealth's2025 youth population. In places where a sugary drink tax has been enacting consumption of these beverages has declined. The World Health Organization established that over 10 years. An attack of 1¢ per ounce on sugary drinks in the United States would result in more than 17,000,000,000 in healthcare cost savings. Additionally, low-income communities and the Commonwealth's youth serve, to ben and the Commonwealth youth serve to benefit the most from the tax. The youth serve, and the youth benefit most. Low-income populations are currently suffering disproportionately from adverse health outcomes. Therefore, interventions targeting this population may reduce the need for health service health care services. I greatly appreciate your consideration of this important piece of legislation and am happy to answer any questions. This Bill, by the way, would increase quite a lot of funding, and availability. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Not much of questions.
You know?
SPEAKER9 - Sorry to propose 2 tax ideas. And and 1 hearing. Thanks.
SPEAKER13 - Thank you.
SPEAKER1 - Karen Gulliam.
KAREN GILLIAN - AVIATION INDUSTRY - SB 1758 - HB 2826 - Good morning, and thank you for allowing me to speak with you all today. My name is Karen Gillian. I own Michael and AVA with my husband, Michael, and they're located in Plymouth and Bedford. I'm opposed to the House incentive Bills repealing the state tax exemption on aircraft. The Gullian family has been in the aviation industry in Massachusetts since 1964. And in 2017, when we decided to open a new national school, we considered locating our business in a variety of states. We found that Massachusetts was the friendliest state for aviation business, and we love it here. In the last 5 years, which included navigating the impact of COVID, we've grown 20 aircraft and 35 employees. We work as a partner with one of the largest US-based aircraft manufacturers Cirrus Aircraft. In the last two years, our school has been recognized by this manufacturer as the partner, which sold the most aircraft out of all of their 300 partners worldwide. Without the aircraft sales segment of our business, we would not be nearly as attractive to potential customers and employees. The revenue from aircraft sales allows us not only to invest in infrastructure but also to hire highly skilled employees We also include a payroll bonus tied directly to aircraft sales to increase or higher wages. We lease only new aircraft in Massachusetts, and this allows us to attract employees from all over the US and Europe. Except for my husband, Michael, all of our current pilots moved to Massachusetts from out of state to work and live here. Three or four of our mechanics working in Massachusetts also came from out of state. A tax on aircraft would essentially move these aircraft sales to neighboring stages and subsequently lower our competitive advantage to entice new employees. Without our employees and our new scale aircraft, the survival, really of our business would be in jeopardy. It boils down to the fact that with no tax on aircraft sales, we've been able to stay competitive, grow our business, higher moral ease, and subsequently pay more taxes to the commonwealth. For this reason, we're strongly opposed to Senate Bill 1758, and House Bill 2826. I get in. Yes SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Alright.
SPEAKER14 - Thank you so much.
SPEAKER1 - Joining us virtually is Sean Vink, associate counsel for Turo.
SEAN VINK - TURO - SB1869 - HB2865 - Chairperson Cusack and Chair Moran. My name is Sean Vink. I'm, associate general counsel and senior director at Turo. I'm here to testify in support of House Bill 2865, and its companion Bill Senate Bill 1869. This is legislation, that would repeal an exemption that exists in Massachusetts sales tax law on the purchase of rental vehicles. This sale tax exemption costs the Commonwealth approximately $111,000,000 a year and represents a significant subsidy to an already highly profitable industry. We believe, as a peer-to-peer car-sharing company that it's important for horizontal equity for rental car companies and individuals that share their vehicles on vehicle-sharing marketplaces to be treated equitably. Every individual who owns and purchases a car in Massachusetts is required to pay the full amount of Massachusetts sales tax on the acquisition of that vehicle, but multi $1,000,000,000 multinational rental companies did not pay that sales tax. That costs, as I mentioned, the commonwealth over $100,000,000 a year and contributes to, inequity in the competitive marketplace. Other states have examined this issue state of Oregon most recently in an Oregon tax court decision decided that rental cars did not enjoy an exemption from Oregon's use tax on the grounds that it was a sale for resale exemption. Massachusetts itself considered this issue in recent years and, gave careful consideration to a bill, and I believe it passed one chamber of the general court that would have fielded this exemption. So, in conclusion, we think that this is a Bill that will support fairness and equity in the overall marketplace. It will provide necessary revenue to the Commonwealth and will2381 eliminate an undue subsidy to an already2383 profitable industry. Thank you for the2385 opportunity to speak to you today. Happy to answer any questions. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you, Sean. Any comments or questions from the committee?
Good. Thank you.
Next step is Jeffrey Yale. Genzyme. Sorry. Yeah. Onnesian. Yeah. Onnesian. Alright. Sorry about that. I'm
JEFFREY ONNESIAN - SB 1869 - HB 2865 - I'm used to it. I'm used to it. Thank you very much. Thank you all for your time. It's amazing. I'm sitting here listening to these Bills go around, and we're talking about alcohol tax, and we're talking about aviation tax. I'm here to talk about the tobacco tax. I am in the process of inheriting this small business for my mother who started it 30 years ago in Plymouth Center. As I was growing up in the first 10 years of that, I recall almost daily hearing my mom tell us about how tough it was and how the tax burden was so great. When I got into the business 23 years ago, the tax on tobacco went on on cigarettes went from 75¢ a pack to a dollar 50 a pack. And overnight, we watched our cigarette sales plummet to the2470 ground because people were mail ordering them from the internet. We also saw the majority of cigar smokers venture over the state line to New Hampshire and other neighboring states that have a lower tax burden. In the business now, and I have the same worries. I have an 8 and a 9-year-old daughter. Trying to get it through school. I'm just trying to keep my mother's business afloat. Over the years,2502 pre-quarantine, we dealt with vaping-related illnesses. Then we had a flavor ban when we came out of quarantine, we had two weeks to sell off what we had left for flavored tobacco. Flavor tobacco was gone. We're now reduced to what I would consider a cigar store. We sell cigars to adults. We're not selling any tobacco products to children the vape is gone. They're going to New Hampshire and other neighboring states for those products.
Going from 40% to 80% is going to drive people right out of the state. You can say whatever you want about an increase in tax revenue. You're not going to get it because they're not going to pay it. They're already not paying for it. They can go online and get seg cigars, cost mailed right to their door. There's, like, there's a law that says they have to file the taxes on the products that they buy out of state but they don't. It's just the way that it2570 is. As far as the flavored tobacco goes, we moved up to New Hampshire as fast as we could. To get there and sell off of, what we had left for flavored tobacco. We didn't make it in time, but I can tell you that the flavored tobacco is on the border of New Hampshire, and it is cheap. Tax-free cigars. Any flavored vape that you want. I'm begging you. We're trying to stay in business just so we can keep my Americans working. I have 24 employees. If this tax goes through, like, My cigars are keeping me alive today. If this tax goes through, it's over. We're out of here. It's that simple. I am a victim of an overtaxed proven. I wanna educate you a little bit on the tax too. That 80% goes on the tax on top of the federal tax. So it's on the cost, which includes the 40¢ per cigar. So the 80 percent would be a tax on a 40¢ per cigar. Then it2644 comes to the counter and it's a 6 and a quarter percent sales tax on top of an 80% excise tax. That's on top of a 40¢ federal excise tax. So it's a tax on a tax and a tax on a tax,2661 and then it's literally a tax of attacks on a tax. Litch release. I want to echo, Representative Paulino's testimony on alcohol. It's part of our American culture. People just wanna smoke a cigar on their back deck and enjoy their life after a long hard day of work. I'm just trying to keep that going. Thank you for your time. I appreciate it. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you, Jeffrey. Any comments or questions from my credit? Anything very cool? Nope. Bye. Thank you, Jeffrey.
Next up is Matthew Nugent from Beverly.
MATTHEW NUGENT - MASS. COALITION TO PREVENT GUN VIOLENCE - HB 2771 - Thanks for the revenue committee chairs. Mark Cusack and virtually, Susan Moran, the leading this hearing of Bills before the committee, including important legislation, HB 2771 for an excise tax on guns and ammunition. In Massachusetts, The economic costs, of dangerous gun violence, sadly amount to a very substantial burden of $3,500,000,000 every year. HB 2771 would get the mostly irresponsible gun and ammunition industry To pay a fair share of the heavy financial costs, to society, from firearms suicides, firearm homicides, unintentional gun deaths, catastrophic gun injuries, and other harmful gun incidents, plus other negative consequences to public safety, and health, and dangerous guns and ammunition, and it would do this via wise, excise tax. This important measure would generate much-needed revenue. To responsibly fund gun violence intervention, enter prevention programs, and help children, women, and men in Massachusetts. We're victims of devastating gun violence. Our state of Massachusetts would do well to join other jurisdictions across the country. It prudently has advanced similar provisions These include sister states like Pennsylvania and California, counties like Cook County and Illinois, And cities such as Seattle. I urged the committee to favorably report on HB 2771, In advance of this important legislation. Thank you, and I'll take any questions you might have. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you, Matthew. It's nice to hear you.
SPEAKER17 - Good to see you, Mister.
SPEAKER1 - Likewise.
REP LINSKY - Thank you for your testimony. Also thank you for your important work in this policy. You're, you know, very fabulous. Right? You're working on many things. Quality theater. I have bought a representative to file this bill. This is another I'm gonna say two of them, a toolbox, in trying to stem, the impact of kind of violence, not only in Massachusetts, but obviously throughout the country. We need to be creative in the way that we do this. This is something that I would be urging my colleagues to seriously consider as the House and hopefully the Senate, continues to look at, doing everything that we possibly can. Still, limit the impact of gun violence in2925 Massachusetts this session. Hopefully this fall I didn't apply before bringing this Norwood in, again, and to play for the scene and to, and take you to take your work and do on this and other limited edition. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER11 - Thank
SPEAKER16 - you for your work. Representative Wenski, you've been a a long time champion decades at this and understand it as well as anybody, I think, in the state. So thank you very much for your work.
SPEAKER1 - Thank you very much. Any other comments, question? Sorry. First, it's good. It's just confidential.
BRANDY - Mr. Chair. Mr. Nugen, thank you for your testimony today. I am curious if you could inform the committee exactly how any jurisdictions across the nation have implemented similar legislation. I know you gave a sampling of in Savannah and California and Cook County in Illinois, but I just be curious to know where else across the nation and the totality has this been happening. Thank you.
NUGENT - That's a fantastic question. I do not have the exact answer for you, but I'd be glad to research that a bit more. I took a sampling, and it's kind of it's been, There have been some jurisdictions that have adopted it and then backpedal a little2992 bit and then put it back into force. So We've had some cities like Tacoma and Cook County. It's it's something that's gone back and forth. I think the important thing to remember is just about every community and every jurisdiction across the country is eager to make sure that costs3009 are applied in a fair way. When you look at the impacts of gun violence. It's not just simply somebody as horrible as it is being shot. There's a downstream effect of gun violence. It affects mental health. It affects the environment. We have ammunition that's led based here in Massachusetts, we know impacts particularly rural children, the rural communities of lead poisoning. So there are a number of public health impacts and, they're quite devastating. I mean, can you imagine a child in a small town out in Western Mass? Just starting out with life and getting lead poisoning. It does a tremendous amount of damage to the brain's function and that really puts you behind in life. So I think making sure that the gun industry is both cognizant and held accountable for these financial costs and health costs is a goal that we should be seeking. I will get back to you3073 in terms of who else might might have, these particular bills in force. You're welcome.3079
PAULINO - Thank you. I would like to thank, you for filling this Bill. 100% loans, and if there is a city that has been suffering from gun violence to my city. Just a week ago. I saw a girl that used to teach a lot of school. India is still 19 years old. She was shocked by that. And the same day that she died, We learned that she was accepted to go another message community community college. The Sunday, we have been working to get her to go to community college until she got shot and killed by an illegal gun I see the3142 son of my friends being here the last 23 years. I know the pain is suffering of my friends. However, Most of those homicides happen with weapons, no purchase, by people the legal way. Those weapons have been purchased or obtained in the black market. Not by people that have a license to carry. And I would like to see data that shows the show. Now in those places, we we Chicago, Seattle, this journey where they have buyback or or ours, defectives of those problems. So I've been reading, for example, Illinois, Chicago, where they have those, they they have no proof that they have to do Berencrantz.3206 this data suggests the current minority of the victims of gunshot increased, but also the the goats they're buying, there are no, they are infected. They don't work. And sometimes people bring guns from outside the state just to get money. So now we have to worry about people smuggling dollars from other stages to sell it to pay money. And also like to get information from from training to see what would prevent people from messages just across 200 to buy You can do it legally to buy a windshield and to buy guns and not pay the SSI task, which will bump the price close to 50%. So I know the pain and suffering I believe we're to get those going outside the street. However, I would like to see data that shows me that that program will be effective. Can I no see that already, please?
NUGENT - Thank you. Your, my condolences to those who you've lost from gun violence and, those who you know who have suffered the tragic consequences of gun violence. And you bring up some important points as to the efficacy, you know, the effectiveness of these gun buybacks Other programs, are they in fact, going to reduce gun violence? Are they gonna reduce tragic gun deaths and injuries? I do not have the statistics at hand in terms of gun buybacks and how effective they've been in other cities. I can get that for you. I think that that is an important thing to remember when we undertake any type of program like this. Is it going to actually be beneficial? There's no real point in doing it if it's not going to work. Right? So I think that, you know, 1 of the benefits one of the ways in which, Mindy Domme's, legislation is going to be beneficial is actually funding the critical research we need to answer questions like you have. Gun violence research has been suppressed for years by an industry that is Wildly irresponsible. They do not want you to know the answer to questions like you're asking, whether it's going to work or not, They'd rather have it be out there as a question as to, is this going to work or not work? I have no proof that it's going to work. They really don't want you to have those answers. I want you to have those answers, Mindy Does, and gun reform. Steer. We want to save lives and warrants across the Commonwealth. I'll follow up with you and get you, some information regarding your questions as to whether somebody's gonna hop across the border to New Hampshire. Lawrence is right on the border, right? He's gonna3396 hop over to Salem. He can hop up to Manchester. He3400 can buy perhaps a gun out of somebody's trunk someplace. These efforts to reduce gun violence or reduce tragic gun deaths and injuries are not going to be completely foolproof. Right? But anytime that you and this is where the economics of comes in. Anytime that you restrict access to a product, a harmful product like this, you're going to reduce the likelihood of it getting into people's hands. And that could be a life saved. Somebody not injured. Somebody gets to go to community3438 college and how to succeed full life. That's just the real reality of economics. Any time you restrict access to it, it'll be fewer guns and less ammunition in the hands of people who are irresponsible. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - How much are the questions? Yes. Thank you, Steve.
SPEAKER16 - Very good. Thank you.
SPEAKER1 - Hi, Greg Lewis.
GREG LEWIS - HB 2763 - Chair in Cusack. chair Marin. Members of the committee, thank you for the good job that you do, both on this committee and for the Commonwealth. My name is Guy LOTUS. I just wanted to very briefly go on the record, as a former member of the general court, in opposition, to House Bill 2763 and the act protecting youth from nicotine addiction. While this title sounds very appealing. I don't think there's anybody in good conscience that would oppose that title. The title does not match the content. The content of this bill really has to do with taxing and over tax industry. As Misty Allanesian said, he's a product of a second generation, a small tobacco store, he's had the good fortune of going several now throughout Southeast Massachusetts. This industry has been decimated I can give you an example, in Worcester, Massachusetts, the only tobacco store left, run by Zach Photos of the Owl Shop. Third generation, I might add just closed its doors to go where to move to New Hampshire. So I would argue that this bill will not produce greater revenue. I am convinced studying this issue for years and having the opportunity to speak to many members of this committee that would actually, in effect, do the opposite. Because of what will happen what has happened and what will continue to happen, these mom-and-pop stores will simply either close or they'll move to the border where many people that I know that want to enjoy a cigar if they don't audit online already go to these border stores to purchase tobacco. So I would like to ask you that in your consideration, this will not add revenue to the state coffers. It will have a detrimental and dire effect on the small mom-and-pop businesses and force3587 many people like Misty Allen Asian, who's trying to do the right thing by owning a small business in Massachusetts to stay afloat. I would respectfully ask you to oppose House Bill 2763. Thank you, Mr. Chimp. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you. Good. Any comments or questions? Halsted. Thank you. Next up is Nancy Gardella, the Mass Regional Tourism Councils Nancy.
NANCY GARDELLA - NORTH OF BOSTON CONVENTION & VISITORS BUREAU - SB 1780 - HB 2715 - Thanks so much. My name is Nancy Gardella, and I'm the director of the North of Boston Convention And Visitors Bureau, and I'm here to speak, in support of House Bill 2715 and Senate Bill 1780. Which basically is an act to promote jobs and economic growth in tourism, visitation, and hospitality. You may know that tourism is one of the most robust industries in Massachusetts The US Donahue Institute study recognizes that truism creates 100 out of 1000 direct and indirect jobs generating nearly $30,000,000,000 in visitor spending. And that spending results in 100 of 1,000,000 dollars in state and local tax revenue. Tourism is not only good for visitors, but tourism is also good for residents. Because places that are great to visit are also great places to work and live tourism supports all kinds of industries across the state. Now this legislature was amazingly has been amazingly supportive of Tourism since over a decade ago setting up the Tourism Trust Fund. And during years, especially during COVID years, has been enormously generous moving additional monies into the Tourism Trust Fund And as an industry, we're so grateful for that support. But the problem with the Tourism Trust Fund is it was set up a decade ago and it has never been changed and it's time to modernize that trust fund. These complimentary bills modernize the Tourism Trust Fund by adding only 1.5% of occupancy excise tax collected to the baseline of the original law, thereby creating a reinvestment mechanism. It means more visitors coming to our state to spend their money and reinvesting a tiny portion of that. To keep that mechanism going. It keeps Massachusetts more competitive with all the places in the world and all the places in the country to visit. Massachusetts is number 30 in investment and yet still keeps in the top 12 popular destinations. We wanna keep that tax revenue, visitor spending, and jobs in play by asking you to support these bills that create an investment in the Tourism Trust Fund. Thank you very much for your consideration. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you. Any comments or questions? No. See you, man. Thank you. The next up is Finneus Bapsondahl from mass budget policy center. Finnees?
FINNEUS BERNIEL - MASS. BUDGET & POLICY CENTER - HB 2826 - SB 1758 - Thank you, Chairman Chair, Moran, and distinguished members of the committee. Thank you for the opportunity to submit testimony on behalf of the mass budget and policy center in support of House Bill 2826. Senate Bill 1758 is an act relevant to3842 the repeal of the sales tax exemption for aircraft. You've heard a lot about this Bill today. This would be this bill would end the current current sales tax for, private jets and other personal aircraft. That's not the way you've heard it framed generally today, but the sales tax and use tax, the exemption for aircraft and airport parts effectively applies only to those who own aircraft for private use because businesses or non-profit organizations you know, are already exempt from things which might be, an intermediary good or bought for resale. This is the core principle of the sales tax. So I urge the committee to ask why the commonwealth would take special pains to subsidize private jets and helicopters. We provide no similar special subsidy for personal cars, boats, or bicycles, and our standard is not that if an industry matters, we don't subject it to the sales tax. If not, we would have no sales tax for basically any final good. The speech the special preference moreover is fiscally costly. It accelerates climate change, and it's targeted to those who need it at least. So going through these, according to the Department of Revenue, fiscal year 2024 tax expenditure report, This special tax exemption for aircraft and aircraft parts from the sales tax will cost the con the general fund $26,700,000.
Every dollar that is foregone because of this exemption is a dollar that cannot be invested in public programs. Or cannot be used for other forms of tax reduction. In terms of the climate, we know that air travel burns extraordinarily large, volumes of fuel, making it especially harmful to the environment and climate. Traveling by private jet moreover is 10 to 20 times more fuel intensive than commercial air travel. It is the most climate-arming form of travel. Exempting aircraft and their parts and storage from a sales tax subsidizes this form of travel which accelerates climate change, worsens air quality, noise pollution, and, of course, the climate. Eliminating the tax exemption would better align our tax policy with our state strategies for climate change. And lastly, perhaps most,3996 obviously, this exemption, worsens inequality. Owning and operating an aircraft for personal use is an expensive luxury. Aircraft owners tend to be very wealthy, those who own private jets, especially, and targeting4010 special tax preferences to them increases inequality in the Commonwealth. So we urge the committee to favorably pass this bill out of committee. Thank you for any questions you might have. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you for news. So --
SPEAKER17 - thank you, Bernie, for your checking. How do I wanna proceed? You know?
BERNIEL - I don't know. I heard from the committee that, other, surrounding states have a similar exemption. If that's true, I guess that would be a re I would think that if you are someone who owns a private jet such that having to travel the extra time to New Hampshire would be enough for the disincentive that it might matter, but I I think that you know, if we had that standard, we would basically set have a sales tax upon nothing.4062
LINSKY - No. I recognize that. It's you know, I was I'm gonna just compare this a little bit to want me buying a car for insurance and, because it doesn't it's a very interesting topic you know, when we when we buy a car in Massachusetts, we pay the sales tax on a tree and reach, and regressive. Obviously, you know, that I don't believe any airplanes are being manufactured in Massachusetts these days. I'm assuming4101 that when you order a private plane, typically probably a private jet, your order gets directly from a manufacturer, whether it's, you know, out of state and separate. So I'm just trying to figure out the mechanics of and our and our I don't even know. So maybe you could answer this. Our planes actually registered in a state the same way that, you know, that we do with cars and registering more vehicles. I'm guessing not. There must be some federal registration form. So, a few things. First,4137 the tax exemption replies also to the storage and park from which they're to get stuff. So there that would be some second, The exemption for cars is4151 included, even if you buy your car in New Hampshire, the DOR forces you to, nonetheless, pay a sales tax when you then come back4159 and become a resident in Massachusetts. I think one thing that is perhaps different is not too many people would garage their plane in New Hampshire while living in Massachusetts. So Perhaps the law could be updated to be about where you reside as opposed to where you're blaming resides. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER21 - It's a great question. Thank you.
SPEAKER17 - I'm just trying to figure out the mechanics4185 of this because, obviously, it brings father nature.
Trying trying to get my hands on with the right solutions. Thank you.
SPEAKER1 - Any other comments or questions?
Thank you.
Moving along Guy Bentley. Vertually.4217 -
GUY BENTLEY - REASON FOUNDATION - SB 1848 - Chairman Cusack, Chairman Moran, and members of the committee. Thank you for the opportunity to fine. My name's Guy Bentley. I'm the director of Consumer Freedom with the Reason Foundation, I'm a Republic Policy Think Tank. The intent to have Senate Bill 1848 and its house companion limit tobacco use amongst youth is to be applauded. But given Massachusetts's already extremely low rates of youth smoking and the unintended consequences that have been stemming from the state's ban on flavored tobacco, we do have concerns that this bill would enlarge the already substantial illicit market for tobacco, push sales and tax revenue4255 to other jurisdictions, and punish premium cigar stores and lounges that have almost no appeal to youth. A 2022 study by Jacob Rich, a researcher at the Center for Evidence-Based Care at the Cleveland Clinic and a policy analyst at Reason Foundation found that the year after the tobacco flavor ban in Massachusetts, there was a substantial spike in cigarette sales in the neighboring counties as well as an increase in non flavored cigarette sales within Massachusetts. Additionally, with consumers turning to neighboring states and illicit markets, according to the tax foundation, the Commonwealth lost $116,000,000 in the first 12 months of the ban. Massachusetts has the 6th highest cigarette tax in the country and the third-highest rate of inbound cigarette smuggling. According to the state's multi-agency illicit tobacco task, they are seizing so many illicit flavored products that their most recent report requested more storage space to store them and new criminal penalties to crack down on this increase in smuggling. An additional cigarette attack fortunately is not required to deal with the problem of youth smoking, which is at4322 a generational low. According to the CDC, Only 3 and a half percent of Massachusetts high schoolers smoked a cigarette in the past month, and those that smoked frequently are just 0.5%. The bill would also double the tax on cigars, including premium cigars. And given that the bill's intent is to protect youth from nicotine, It's unclear why premium cigars, which have almost no appeal to youth, are being targeted for such a large tax increase. According to the National Academies of Sciences Engineering4354 And Medicine, past 30 days use of premium cigars amongst my minors is 0.1%. Raising taxes on premium cigars would not improve health outcomes for youth, but would have a substantial impact on the numerous cigar stores and lounges. As customers likely turn to neighboring states to avoid a substantial price increase as has been the case with cigarette smokers. Thank you so much for your time, and I'm happy to answer any questions. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you. Good. Any common questions? Hey, none. Thank you. Our Ben drum, Representative Ayers.
Thank you. Thank you,
REP AYERS - HB 2703 - Mr. Chair I also want to thank, the4411 chair.4411 Here4411 this afternoon, hit to speak about House Bill 2703 and act exempting certain, internal organizations from the sales tax of alcohol beverages. Mr. Chair, what I'm trying to do here with this bit was just help out some of the fraternal organizations in our districts. We all know how much they give back, whether it's the elks, the nights of Columbus, sons of Italy, the majority of these, eternal organizations are constantly giving back, whether it's working with our seniors, our veterans, our youth, and the various programs, that they have. Their volunteers, donating the donating their time, just play a crucial role. I can say with my affiliation with the Quincy Lodge of Elks, how much they do, whether it's youth programs mentoring, the seniors, or the vets, they give out scholarships to our seniors, hundreds of food baskets during, the holiday time to families they need. What this Bill would do is just help them financially A lot of these organizations unfortunately took a financial hit and closed during, COVID-19, did not reopen, and a lot of them are still financially struggling. So any consideration you could give towards the passage of this Bill to help them out when they're constantly giving back to the community through their members would be greatly appreciated. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Cool. How much of questions for the representative? Thank you, Bruce. Thank you. Kyle Feldman. Good afternoon, everybody.
KYLE FELDMAN - NATIONAL COMMUNITIES DISTRIBUTORS -HB 2763 - SB 1848 - Honorable joint committee of revenue. My name is Kyle Feldman, and I'm here today to express my opposition to House Bill 2763 and Senate Bill 1848. I serve as the Executive Vice President of Government Affairs for National Communities Distributors, a company with 6 divisions including Jay Pollock Distribution based in Chicopee, Massachusetts. Our organization employs over 1900 individuals. Many of whom are union members, and we supply nearly 20,000 convenience stores with grocery items. I bring a unique perspective on tobacco tech stations to this discussion. Based on my extensive experience dealing with tobacco-related issues in 13 States and the District of Columbia, Time time and again, I have witnessed that tobacco taxes often fall short of achieving their intended goals and frequently fail to meet revenue targets. A recent study highlighted a concerning trend. Between fiscal year 2009 and fiscal year 2016, 47 state excise tax increases were implemented. Shockingly, only 4 of these increases met or exceeded the revenue estimates made by state offices. To illustrate the challenge, consider the example from 2012 when Rhode Island increased cigarette taxes by a mere $0.04 per pack but still fell short of revenue estimates by a staggering 128%. Moreover, it is important to acknowledge that cigarette taxes are among the most aggressive forms of taxation. This proportionally affects low-income earners, while the aim of these bills is to reduce youth intention to cigarette smoking. Data from the latest CDC reports reveals that just 0.5% of Massachusetts high school students currently smoke cigarettes. Rather than imposing regressive taxes, the state should prioritize enforcement efforts. The Massachusetts Illegal Tobacco Task Force highlighted this in their 2023 report. Identifying cross-border smuggling of untaxed flavored ends brought cigars, and mental cigarettes is the primary challenge for tobacco enforcement in the Commonwealth. Inspectors and investigators routinely encounter or seize mental cigarettes flavored end products, and cigars purchased from unlicensed distributors, both within and outside the commonwealth. It's crucial to understand that increasing the tax rate on cigarettes or any tobacco product will not achieve its stated goal and is more likely to exacerbate the growing smuggling problem as identified by state officials. I appreciate your time and consideration of my comments, and I urge you to vote against these proposals. Thank you very much. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you, Kyle. Any comments or questions from the committee? Seeing none. Next up is Ed Olivera.
ED OLIVERA - HB 2763 - SB 1848 - Good afternoon, Mr. Chairman. Madam Chairwoman, members of the joint committee. I am also here to oppose House Bill 2763 and Senate Bill 1848. Some of what I was going to say has already been said, by a number of the gentlemen prior to I've been a category manager for tobacco and the convenience store industry for the past 20 years. I've gone through several of these4723 excise tax increase hearings and to echo some of what's already been said, it's not going to increase, excise tax revenue for the commonwealth. What's going to happen is folks that would normally buy a cigarette in the Commonwealth will go to other states as several of my, several of the gentlemen that, spoke earlier have said. New Hampshire, Connecticut, Rhode Island, etcetera. I don't think it's a really good idea for anybody. It doesn't help anybody. It doesn't help the adult tobacco consumer. As they tend to be low-income earners, it certainly doesn't help retailers. You know, tobacco is the top revenue generator in a typical convenience store. Approximately 36% of the inside store sales are generated from tobacco sales. The gentleman Kyle just mentioned illegal smuggling. People aren't going to quit smoking. They're gonna find it out where. Whether it's through being through the black, market or smuggling, or online. Weakness of economic growth is another, issue as well in our inflationary times. Smokers pay more in aggregate to smoke. They consume less of other goods and services in the economy. So this doesn't help the average consumer either. I appreciate your time and effort, in listening4806 to my commentary and other4808 gentlemen that have come before me. Again, I opposed this bill House Bill 2763 Senate Bill 1848. Thank you for your time. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you, Ed. Comments of questions. Any Moving on, BJ Mayer.
CJ MAYER - HB 2763 - SB 1848 - Good morning. I am BJ Mayer. CAU, is the executive director of the Northeast Wholesalers Association, representing wholesale businesses throughout the Northeastern United States. Many of which are family owned and operated and who you heard from today. I'm here today to express our strong opposition to House Bill 2763 and Senate Bill 1848. Which proposed to increase excise taxes on cigarettes and cigars. Our primary concern centers on the critical issue of cross border smuggling which has already been exacerbated by the existing menthol cigarette ban. It is imperative to understand how these tax increases would compound the failures of this ban rather than offering effective solutions. The menthol Cigarette ban in Massachusetts enacted with the aim of reducing smoking rates and protecting public health provides us with valuable insights. Instead of achieving its intended goals, this ban has4873 led to unintended consequences, particularly a surge in cross-border smuggling. It is clear that the ban merely displaced the market from menthol Cigarettes to neighboring states where they remain available legally. A comprehensive report from Case Western University underscores this.
Revealing that in the year immediately following the4890 menthol cigarette ban in Massachusetts, there were4892 29,960,000 fewer cigarette packs sold within the state. However, in a country in a county bordering Massachusetts, cigarette sales grew by a staggering 33,360,000 packs. The result was not a reduction in smoking but rather a redistribution of tax revenue out of the state. Raising excise taxes on cigarettes and cigars as proposed in House Bill 763 and Senate Bill 1848 would likely exacerbate the already substantial problem of cross-border smuggling. It is imperative to recognize that punitive tax measures are not a solution to this pervasive issue, rather they compound the problem by driving more consumers to seek tobacco products from neighboring states where they can be obtained at lower prices. The failures of the menthol cigarette ban should serve as a stark warning against the unintended consequences of punitive measures that only displace the problem rather than solve it. A more effective approach involves comprehensive4944 enforcement strategies and targeted4946 efforts to disrupt illicit trade networks. In conclusion, we urge you to consider the ramifications of these tax increases in light of the failures of the menthol cigarette ban and the growing issue of possible smuggling. Raising excise taxes on cigarettes and cigars as proposed in these bills is not the solution. It was focused on comprehensive enforcement and collaborative efforts to address the root causes of these problems. We respectfully request that you vote against these bills. Thank you4973 for your attention. SHOW NON-ESSENTIAL DIALOGUE
4975 SPEAKER14975 -4975 Thank4975 you, BJ. Commerce of questions. See you, none. Lindsay Stroud.
LINDSEY STROUD - TAXPAYERS PROTECTION ALLIANCE - HB 2763 - SB 1848 - Yes. Chairpersons, Kewsak, and Moran, vice chairs, and members of the committee. Thank you for your time today. My name is Lindsey and I'm the director of the Taxpayers Protection Alliance Consumer Center, a national watchdog organization, I'm speaking in opposition to SB 1848 and HB 2763. I did submit written testimony. I just wanna highlight some key points and some of this has already been said, so I'm just gonna kind of gloss over though. So, Again, this legislation is titled Protecting Youth from Nicotine Addiction, but it disregards the historic lows in use cigar and cigarette use. There is no 2021 data in 2019 only 5.1% of Massachusetts high school students reported using cigars. And in 2021, yes, only 3.5% were using cigarettes. And these are some of the lowest levels recorded in the Commonwealth. Nationally in 2022 only 1.9% of US Middle And High School students reported using cigars and only 1.6% were using cigarettes. These are the lowest levels ever recorded. Cigarette taxes have also disproportionately, impacted lower income persons and have failed to significantly reduce smoking rates among those people between 20132021. The number of mass it's adults earning $25,000 or less who were smoking decreased by only 27.6% while the percent of adults earning $1000 or more that we're smoking decreased by 43.5 percent.
Now rather than imposing taxes, which will leave Massachusetts having the 2nd highest cigarette tax in the region, lawmakers should revisit the menthol cigarette ban, which led to significant decreases in cigarette tax revenue while having a minimal impact on reducing smoking rates among adults. Between 2020 and 2021, cigarette tax revenue in Massachusetts declined by 22.3%. Yet, collections in New Hampshire and Rhode Island increased by 14.4% and 13.9% respectively. There were also greater declines in those states, among smoking and smoking among adults. Between 2020 and 2021 smoking among Massachusetts adults came by only 4.5%. Yet among, adults in Rhode Island, they decreased by 8.1% by 11.5% among adults in New Hampshire during the same time period. Finally, and probably most importantly, than imposing additional taxes, lawmakers should use more of the already existing tobacco monies on tobacco control programs including youth prevention In 2021 Massachusetts collected over $116,000,000 and state cigarette excise taxes and tobacco settlement payments. Yet, the commonwealth allocated only $5,100,000 that year toward the tobacco control program. This amounts to $0.01 of every $1 received in tobacco monies being used towards youth prevention, education, and cessation programs for adults. Again, youth tobacco use is down and the Commonwealth should revisit earlier policies while allocating assisting cigarette taxes towards prevention programs. Thank you for your time today. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you. Any comments or questions from me? No. Thank you. Next up is Alec Bureauopoulos.
ALEX BROCKLES -CACIA - SB 1848 - HB 2763 - Good afternoon, Coach Imran, Coach Cusick, and members of the joint committee on revenue. Thank you for the opportunity to testify today. My name is Alex Brockless, and I am the regional policy manager for the northeast at the Computer And Communications Industry Association. I'm testifying to rest respectfully oppose this slate of bills being considered by the committee that will establish a tax on digital or online advertising services. I've also submitted a lengthier rest written testimony for the committee's consideration. While recognizing that policymakers are appropriately interested in the digital services that make growth to the US5188 Economy. These Bills require study as they were they may raise constitutional concerns and risk having a broad economic impact including on on small and medium-sized local businesses. While the Bills may appear to target and tax are likely to impact and harm smaller businesses instead. If a significant tax is levied against businesses that conduct digital advertising services, these costs are likely to be passed on. And when these costs are passed on, they're likely to be on to the entities creating the ads, which translates to the various smaller-sized local businesses who reap significant benefits in being able to advertise on such platforms. Online advertising is particularly official to local businesses who can then target their advertising to the local markets that they are serving. For these reasons, digital advertising is an increasingly popular option for small and local businesses. In fact, one study showed that small businesses saw savings of nearly 163,000,000,000 annually by using online advertising.
Therefore, levering fees on digital services hosting such advertisements would impede the ability of small and local businesses to effectively advertise to targeted consumers. Secondly, taxing digital advertisers raises serious concerns regarding administrative feasibility, determining which ad digital advertisements are subject to the proposed tax may be held. This is compounded by the fact that digital ads that reach state residents are hosted on digital platforms that transcend state borders. In particular, digital advertisements served in a mobile context, especially in a state with a large degree of movement across adjacent state borders, such as Massachusetts, posed several barriers to determining which ads have been served to state residents. Being able to accurately confirm whether a digital ad has been served or state resident would be required would require additional data collection, which has data privacy implications that may conflict with data minimization principles. Third and finally, sim similar proposals for tax, digital advertising, and other states have raised serious constitutional questions. This legislation signals out businesses that provide digital advertising services from their peers in the traditional offline advertising space. This is important as it raises constitutional concerns related to the Internet Tax Freedom Act and the First Amendment. The only other state to have passed a digital advertising tax law, Maryland, has had numerous challenges to its law in both the state and federal judicial systems, and further rulings and procedural clarity are pending in both cases that will determine if the law will stand. Appreciate the committee's consideration of these comments and am happy to answer any questions. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you, Alex. Any comments or questions? None. Thank you. Travis Allen.
TRAVIS ALLEN - SB 1869 - HB 2865 - Kara Cusick. Can you hear me okay? Chair Cusick, Chair Moran, and honorable mem members of the joint committee on revenue. My name is Travis Allen. I'm a risk manager with an enterprise rental car company in Boston. Enterprise, Rent A Car Company of Boston is a wholly owned subsidiary of Enterprise Holdings, and Enterprise Holdings operates the enterprise Rent A Car National car rental and Alamo car rental brands across the Commonwealth of Massachusetts. We are 60 plus-year-old family-owned, family-operated business that offers mobility solutions, including car rental, car sharing, commuter vanpooling, and other multimodal, mobility service models. We bring Massachusetts residents these services through our network of more than 25,000 vehicles operated at our 130 offices by over 1400 employees in the Commonwealth. Enterprise appreciates your careful consideration of age HB 2865 and SB 1869, which expressly revoke the longstanding tax treatment of vehicles purchased exclusively for rental in the course of business. Massachusetts currently does not apply sales tax, to tangible property that is purchased5429 exclusively for rental, lease, sale, or resale. Massachusetts does, however, apply sales tax, to retail transactions involving such property. This is consistent with tax policy for all other wholesale purchases of inventory by businesses. For example, a local shop owner does5450 not pay sales tax on the purchase of the5452 goods they offer for sale in their store.5454 Instead, sales tax is owed by the retail sale of those goods by the consumer.
The shop owner collects that sales tax from the customer and is responsible for remitting it5465 to the commonwealth. Proponents of H2865 and S1869 Claim motor vehicle rental companies receive preferential tax treatment via an exemption from state sales tax on the purchase of vehicles. The fact is rental car companies are treated just like everyone else who purchases goods exclusively for rental, sale, lease, or resale. When rental companies or anyone else purchase a vehicle for any other use, there is no exemption. H2865 and a s, 18 69 would completely upend that policy and create an outlier tax5503 treatment that specifically targets car rental companies, which in turn would be inconsistent with every other industry in Massachusetts. This double taxation would have an ever-negative impact on car rental companies in Massachusetts as well as the thousands of Massachusetts residents who rent vehicles from enterprises and our brands every day in the Commonwealth. Exposing tens of 1,000,000 dollars in new taxes on an industry that continues to be recovering from the devastating impacts of the global COVID-nineteen pandemic would further jeopardize large and small operators alike. Under normal operating conditions, the rental vehicle industry generates an estimated 500,000,000 annually in tax revenue and economic impact for the Commonwealth. Now more than ever, this unprecedented change and longstanding tax policy would create unnecessary damaging uncertainty for our business, ultimately impacting the significant tax revenue and fees, the states, and municipalities received currently as a result of our business activity. To summarize, the enterprise is asking you to reject HB 2865 and SB 1869 and its targeted increase in the vehicle rental industry. We ask instead that you maintain the consistent Massachusetts tax policy of exempting from sales tax, the purchase of goods to be used for resale purchases. Motor vehicles purchased by rental companies should not face a different tax treatment. Than any other good purchased exclusively for rental, lease, sale, or resale. Thank you for your time and consideration of this very important issue in our industry. Thank you again. If you have any questions, SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - please ask. Thank you, Travis. Thank you. Thank you.
Thank you. I've been joined by Senator Timothy.
SEN TIMOTHY - Good afternoon. Thank you, Mr. Chair. Representative of Zelensky, members of the committee. Thank you all very much for this opportunity to testify on behalf of Senate Bill 1955. Connect relative to the funding of the Massachusetts Statehouse Police Memorial. This is a re-file that was reported out favorably, from this committee in the last session. Specifically, this bill seeks to establish a fund in the Commonwealth to be known as the Massachusetts Law Enforcement Memorial Fund. The purpose of this5654 fund, of course, is to memorialize and honor Massachusetts law5658 enforcement personnel Tragically killed in the line of duty. 1st of all, annual payments would be made to this fund from the revenue received from the sale of registration plates, under Massachusetts general law's Chapter 90 Section 2 g. Moreover, Mr Chair, as I know, and represent Zelensky and the members of this committee I am confident we're all in agreement. We have incredibly selfless and brave law enforcement personnel in this Commonwealth. I believe and, believe many of us are in agreement. This would be a fitting way to honor them. The message is imperative in my estimation that we commemorate this out in commitment to public service.
Excuse me, by honoring those law enforcement officers who have tragically been killed in the light of duty making the ultimate sacrifice on behalf of the citizens of the Commonwealth. Furthermore, by establishing this fund, we will maintain and enhance the memorial at the state house that we currently have. That on his law enforcement with so bravely made the ultimate sacrifice for the Commonwealth. Additionally, through this fund, we will be able to support an annual commemorative event to be held at this memorial to honor fallen law enforcement here in the Commonwealth. As the fire service, does each and every year on 9 11. Would that, mister chair, I respectfully request a favorable report for Senate Bill 1955? And I look forward to questions working with you and each and every member of this committee. Thank5739 you very much, and happy to answer any questions. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you, Senator. Any comments or questions from5743 the committee?
SPEAKER17 - So thank you, Simon.
SPEAKER1 - Alright. Thank you. Thank you very
SPEAKER3 - much, Mister Cheve. Thank you, members. See
SPEAKER17 - you on end.
SPEAKER1 - Next up is Olga Golberg.
SPEAKER30 - Chair Moran.
SPEAKER31 - Sorry. Can you
SPEAKER14 - hear me? -
OLGA GOLDBERG - HB 2865 -SB -1869 - Yes. Okay. Great. Chair Moran. Members of the joint committee on revenue. Good afternoon. name is Olga Goldberg. I'm a Massachusetts of Lifeman's attorney, and I'm a partner at the law firm Pierce Atwood L. P. I've been practicing state and local tax law for over 10 years. I'm here on behalf of our firm's client Enterprise Holdings, Inc. But my testimony will focus on the significant tax policy concerns raised by companion Bills SB 1869 and HB 2865, and I'll try not to repeat much of what Mr. Alan just testified to. As everyone here knows, these bills propose to eliminate the sale for resale exemption from the Massachusetts sales tax for motor vehicles, trailers, and other vehicles that are purchased by car rental companies for rental to Massachusetts customers. These 25828 Bills violate 2 fundamental tenets of sales tax policy and will result in significant economic distortion that will negatively impact Massachusetts residents and businesses. Tenant one, the sales tax is only a tax on the consumption of goods by an end consumer because these bills target car rental companies, I'd like to give you just an example involving cars. So in Massachusetts and in other states, sales tax lies in all forms of household consumption. So if I, as an individual, decide to buy a car outright, I'm going to pay sales tax. If I decide to lease the car, I'm going to pay sales tax. If I decide to rent a car for a couple of days, I'm going to pay sales tax. I5877 as the consumer get to choose how I consume the vehicle, but every time I consume the vehicle, I'm going to pay a sales tax on my option. Tenet two, the sales tax is not and should not become a tax on business inventory. To carry out this5895 fundamental tax policy, every single state5897 has a sales tax, including Massachusetts unless these bills are enacted. Exclude or exempt purchases made for resale or for taxable rental. So for this reason, under Massachusetts law, a car dealer's purchase of a vehicle for sale or for a long-term lease is a5918 nontaxable purchase for resale or sales for resale? Likewise, a car rental company's purchase of a vehicle for rental is and must remain a nontaxable sale for resale. I want to be clear that this is not some sort of special exemption for car rental companies. This applies to all companies in all industries. These two Bills will result in Massachusetts sales tax imposed on both consumers and business inventories, a violation of sound tax policy that harms Massachusetts its businesses, and its residents. These Bills will result in Massachusetts becoming an outlier as the only state that taxes vehicles purchased by rental car companies or taxable rental to consumers. I'd like to address what the gentleman Touro said in his testimony earlier that Oregon now taxes car rental company purchases of vehicles. Oregon does not have a state-level broad-based sales tax on consumption. Oregon enacted a use tax that is applicable only to purchases by motor vehicle dealers for sales at retail.
There are no two levels of tax that are occurring in Oregon, and it is not an accurate comparison to the state that Oregon now taxes. Purchases by rental companies because their rentals to consumers are not taxable. There's just one layer of tax. So I'd like to point out three particular problems that arise from this economic distortion. First, most obviously, double taxation These bills would tax each rental car purchased in Massachusetts twice, once at 6a quarter percent on the car rental company's purchase, and then again at six a quarter percent on the consumer rental. The second issue is unremitting. That is a tax on tax. That's what happens when business inventories are taxed and then businesses in turn pass along their additional cost to consumers. So car rental companies will increase their price, and they will have to increase the cost of a car in Massachusetts to cover the new tax that they are now being charged. And as a result, consumers not only bear the burden of the new taxes, on their rental price for the cars they rent. Consumers will also then pay sales tax on that price increase. If S1869 and H 20 65 are enacted. This pyramid will increase the effective sales tax rate on consumer car rentals to significantly more than 6 quarter percent. And just a final note that this bill singles out a single industry. To the extent possible, tax policy is to pick winners and losers. Today, the resale exemption in Massachusetts is industry-neutral, but these two Bills are not. The bills target single-industry car rental companies. They increase business inventory costs only for cars. Companies and only for-hire companies that operate in Massachusetts. Other companies that rent other types of tax I'm sorry, other types of tangible personal property, or other companies that sell other types of tangible personal property, we'll continue to purchase their inventory's sales tax exempt. Thank you very much. I'm happy to answer any questions. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you. Hold on. Any comments or questions?
SPEAKER32 - I do have a question, Mister Terry.
SPEAKER1 - Thank you.
SPEAKER32 - Mister Chair?
SPEAKER1 - I'm sorry. Sorry. Shane Moran?
SPEAKER32 - Yes. I did have a question.
SPEAKER1 - All good.
SEN MORAN - Yes. Thank you, and thank you for the consideration of having me appear, on the road here virtually. I trying to figure out, what the the money is that we're looking at, and I appreciate your testimony. So what can you tell me about the amount of taxes, really the benefits to the car rental companies especially the sales tax that you just discussed because I hear critics say that it's costing Massachusetts anywhere from 4,000,000,000 or, I think someone earlier said something like 111. What is your thought on that or help me out here?
GOLDBERG - Thank you for that question. I think that question would be perhaps better directed to Mr. Alan, who's here on behalf of, the enterprise. I can tell you from a sales tax policy perspective. This is not a special exemption for rental car companies. This is an exemption that applies to every single business in Massachusetts in order to lower ultimately in order to lower costs for consumers. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER32 - Thank you, Mister Allen.
ALLEN - Yes. Thank you for thank you for the question. , For enterprises and, or the other companies in the car rental industry today, we remit the sales tax. Very similarly, I don't have the industry total. But I know that the economic, impact of taxes and, and, and other, ancillary purchases are estimated to be about half a half $1,000,000,000 today. So there already are taxes, you know, on the transaction, excise taxes, payroll taxes, property taxes, that are being remitted by the car rental companies, annually in the Commonwealth of Massachusetts.
MORAN - Right. But my question was on the sales tax in particular.
ALLEN - The question was what are you asking me to confirm if the $111,000,000 is accurate or to my estimate?
MORAN - Right. What is the amount that will be lost to Massachusetts as this moves forward if it does?6280
ALLEN - I think the losses are, it's a challenge, it's challenging to predict. So if, if this is enacted, you know, the, the, the, the concern that I would have in the industry would have, is the cost of rentals would increase. We would have to close locations, have fewer vehicles6301 in our fleet, and you know, we, in turn, lead to lost jobs. We have 1400 people in enterprise alone. If our company were required to pay the sales tax, on the purchase, as well as tax the transaction. There are concerns from the peer meeting as to what that would do with the cat, the cost, and, you know, what the viability of our business going forward
MORAN - Right. But I think it's not probably coming across with the video.6332 I've, again, asked about the amount of the sale tax, not the cost of the business. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - What would the amount be when the sales tax is applied to your purchases?
ALLEN - To the purchases, I believe that that's the industry, an estimate of about $100,000,000 is accurate. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER32 - Thank you. Thank you, Mister Chair.
SPEAKER1 - Thank you.
SPEAKER29 - Thank you.
SPEAKER1 - Vince Jackson. -
VINSE JACKSON - HB 2715 - SB1780 - Good afternoon, everybody. I am, Vets Jackson,6378 the executive director of the Greater Northampton Chamber of Commerce and6382 also the executive director of the Hampshire County Regional Tourism6386 Council, which is a part of the Greater Northampton Chamber. I, along with my colleague, who testified earlier, Nancy Padella, also serve as co-chair of the RTC Collaborative Regional Tourism Councils, all 16 of us across the Commonwealth. So to the joint committed. Thank you so much for this opportunity to testify and strong support of HB 2715 and SB 1780. Act to promote jobs and economic growth in tourism, visitation, and hospitality. I am, really excited about this legislation because it is so important it will make Massachusetts more competitive, and give us a position of strength to increase our market share of domestic and international travel spending. Tourism loan generated $200,000,000 in occupancy taxes, last year, and reinvesting 1.5% of that back into the Tourism Trust Fund, above the current base would also allow us to be better at covering the costs, which are increasing for the marketing services, the innovations, and the marketing tools, that we need to compete officially and effectively as well as promote tourism and visitation.
Like many chambers of Commerce, around the Commonwealth, the Greater North Hampton Chamber, is mission-focused on economic development. Our role is simply to get people to spend more money, more often, and more of it when they come to Massachusetts. And, what we find is that we must attract them and get them here. It all happens on Main Street. A lot of our, cities and towns are dedicated to that. And we know that we have6515 to showcase our restaurants our movie theaters, our, retail shops, and services, and any adventures that consumers want to take advantage of. So this legislation is so important in that. There's a domino effect. When they come, they come to spend. As was emphasized, earlier, there were, several of my local campaigns, that were, promoted during the pandemic, and it is the spotlight on so many attractions and assets across the Commonwealth to let our residents know that We're also, tourists of our own goods and services. So with that, we know that small businesses are the backbone for many of those attractions and assets and that, 99 points 5% of businesses in Massachusetts are small businesses, and 46% of employees in Massachusetts work for small businesses. And, my colleague, Nancy Gardella mentioned the Umas Donahue Institute, well, that report concluded 1 important fact. It states that for the message to reach the full economic potential funding must be increased for marketing and promotions. Within and beyond the state. That is why HB 2715 and SB 1780 are so important. So, again, thank you for this opportunity to testify in support of this act to provoke jobs in economic growth and tourism visitation and hospitality. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you. Thanks, Thomas. Questions? Nina, thank you.
Elaine Zohns.
ELAN SEAN - HB 2065 - HB 2828 - HB 2930 - Good afternoon. Thank you so much for the opportunity to testify before your Q And A today. My name is Elan Sean called. I'm a director of state and local public6648 policy for the Chamber of Progress. Chamber Progress is a tech industry coalition that promotes technology's progressive future. We have a number of corporate partners that include companies like Google, Apple, Touro, and Barb Partners do not have a vote or veto over any of our policy positions. Today, I'm here to testify against HB 2828 and HB 2930 with their bow which are both acts that relate to a digital ads tax. I'm also here to testify in favor of HB 2065 and act relative to sales tax, which is the loophole relating to rental cars. First, I'd like to discuss the digital ads tax. Currently, many online services are often provided at no cost to consumers. This ecosystem is fueled by user data collected online across a number of platforms. Surveys consistently show that this free model is extremely popular. You can see this in services such as Google Maps, Gmail, Google Search, YouTube, Instagram, etcetera. Consumers use these products for many different reasons, including keeping in touch with friends and family. These Bills would threaten the underlying ecosystem that supports that free model. This Bill would likely result in attacks on all Massachusetts social media users and small businesses advertising online. Many different kinds of entities, not just small businesses, but advocacy organizations, artists and creatives, newspapers, and political candidates, rely on digital advertising to spread their message to get new consumers, etcetera, Imposing attacks on providers of online advertising would end up harming every group that tries to take advantage of modern digital advertising tools as attacks would be passed down. I'd like to also briefly discuss, HB 2065, which would close a preferential sales tax loophole enjoyed by incumbent rental car companies. There are currently, 4 states, where the car companies pay sales tax, including North Dakota, Georgia, Hawaii, and Oregon, as you guys heard earlier today. Currently, nationwide, it's estimated that rental car, companies, legally evade billing in taxes through the sale for a presale tax exemption. In Massachusetts itself, a 2020 study found that current sales tax exemption for rental cars cost to state 111,000,000 in annual tax revenue. The Massachusetts sales tax exemption was also never actually approved by the state legislature but was rather implemented through an administrative rule. Currently, car owners who share their cars through peer-to-peer car-sharing services do not receive the sales tax exemption. We are in favor of peer-to-peer car sharing as we feel that facilitates more livable cities frees up street space devoted to vehicle parking and allows city residents' short-term use of a vehicle for errands. Thank you so much for your time. We ask your Kamey to support HB 2856 and oppose HB 2828 and HB 2930. I'm open to any questions. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you so much for that.
SPEAKER11 - Alright. Emily, if I may, that's a question. This is in regards online advertising then. What what are the companies that you mentioned? They
SPEAKER1 - --
SPEAKER33 - we we have a number of corporate partners, but some of those include Google, Amazon. Apple.
SPEAKER11 - Apple, Facebook, all those?
SPEAKER33 - Yes, sir. Yes.
PAULINO - All those companies, it's something that the good is got the data. They're so good. Gathering data. And that's why they The up the games, they have so much they make so much money, advertising because they can target, specifically, like, if I put product and I wanna sell it to a 40 years old, Dominican, that weighed £300, they'll be able to find me whatever I am. They were they were fine. You know where to find me. They know which thing I love. They know they love the socks that they hate your needs. They hit the junkie. They don't want to be told about me, but I didn't mean myself. They are good. Get the data. And they know when I live with a goal. So, also, if it's online if we were to sell tax, they would know where the buyers were the owners of the guys live. So they take advertisements away from TV commercials. Less people I don't even have cable in the house anymore. I don't watch it. Everything like there is on you too. So what we're asking is, well, for the viewers, listen. And more people, more people, everything, are looking or social media online for advertisements. We wanna tax that. And it's clear. So and because You're come they can't those companies are so good. None. It's rude. They'd be so good at identifying which day they live. They live in Massachusetts. They know they would where I live, right, hang out, what I like. They'll be able to identify them as 2 search residents and in in in also, the companies are in That way, we can collect them on sale debts. So then turn them down. It will be hard for them because they know. They know.
SEAN - You very much for that question, sir. I'd like to just respond with three points. So first of all, I'd say my organization is separate from these companies. They don't have any role in our corporate governance. my organization actually does support, increased taxes, We came out in support of, the president's tax plan on corporations. Point two I would just like to briefly say, our worry is specifically about this kind of tax because of, how many of these services are kind of on a freemium model. Third, with target ads, they are very, very effective. I will say that when I myself go online and I'm looking to buy a new pair moneys? We're no we're no taxi. We have a taX
PAULINO - We are I believe7053 this Bill is for Will I purchase an advertisement when you want to tax the Nope. Stop.
SEAN - Oh, yes. But then, the digital ads, are part of the reason why these services are able to be offered for free. So, you know, it would affect the entire ecosystem
PAULINO - something it charged for? They charged me, like, say, $200. I'm gonna advertise something on my So the selling tax, we go to those the let charge. So anything is for free? There's no sales tax because they didn't sell anything to me. You understand that. Right?
SEAN - Yes. But, you know, I think, you know, men many of the people who are, you know, say Nike, for example, right, if I'm Nike, I'm going to pay an increased cost for trying to push out my digital ads and for smaller businesses, you know, newspapers, you know, people who are artists creatives, that could be potentially prohibited, right, when you're trying to expand your audience, get new eyeballs on your product. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you
SPEAKER16 - very much, sir. Thank you, Alan.
SPEAKER1 - Lauren Bacher.
SPEAKER31 - Afternoon. Can you hear me? You see me?
SPEAKER1 - Yes. I can hear you.
LAUREN BAKER -HB 2715 -SB 1780 - Thank you. Good afternoon, Sharon Moran, Chan Qsack, and committee members. Thank you for the opportunity to testify today. My name is Lauren Barker, and I'm the director of government relations at the Cape Cod Chamber of Commerce. We're a nonprofit that advocates on behalf of businesses to strengthen and promote the regional economy of Cape Cod. And today, I'm speaking in support of 2 bills on your agenda. HB 2715 and its companion Senate Bill 1780. Enact to promote jobs and economic growth in tourism and hospitality, and S1898, an act to protect affordable housing stock. So I'll start with bills HB 2715 and SB 1780. These bills propose to allocate A percent and a half of stateroom excise to promote tourism and hospitality business statewide. This bill will provide a sustainable funding stream to support an integral piece of our state economy. Massachusetts has a long-running and significant need for increased investment in tourism and hospitality, which across the state generates about, $1,500,000,000 in taxes and supports nearly 150,000 jobs. Despite this impact, Massachusetts ranks 2nd lowest among New England States for travel and tourism investment. This lack of funding leaves tourism-dependent regions like Cape Cod vulnerable to fluctuations in the travel and tourism market. It makes our region ill-equipped to compete with other destinations that routinely outspend us in marketing and promotions. And it limits our ability to strategically promote ourselves during less busy times of the year. The result here is that it perpetuates a boom and bust pattern of visitation and results in economic instability, disproportionate wear and tear on our local infrastructure, and burnout of our labor force. Tourism and hospitality are key industry areas that generate significant revenue for our commonwealth. Thus, we encourage the committee to report these Bills favorably and ensure that seasonal economies and tourism-based businesses across the state can continue to compete and thrive.
And next, I'd like to speak to Senate Bill 1898, an act to protect affordable housing stock. Which proposes tax policy changes and improvements to the7289 statewide regulation of short term rentals. The strategies in this bill are especially critical for regions like Cape Cod where the current lack of attainable housing is negatively impacting our labor supply, business climate, and economic viability. Looking at the current market, it's7307 clear that the numbers do not add up for working7309 families and local employers when it comes to housing. To purchase a single-family home at the median price, a buyer on Cape Cod must earn an income of over $166,000 per year. That's more than double the median income in our region. Almost7325 half of Cape Cod's labor force does not live in our region right now due7329 to a lack of housing that meets regional workforce needs. This causes issues with transportation, and quality of life, and doesn't leave a lot of room in people's budgets they have to drive back and forth and take on other expenses outside of their housing. Meanwhile, owners offering their property as a short-term rental can earn the same amount of income in 2 or 3 months as they could earn through a year-round rental. And while this is great for those who are able to buy properties and rent them out on a short-term basis. It does indicate that creative solutions are needed to bring the balance back to the year-round housing market. SB 1898 exemplifies a smart and coordinated approach using tax policy to preserve housing that supports our workforce and employers. And the Cape Cod chamber offers its full support of this legislation. So in closing, I wanna thank you again for the opportunity to speak to you today. We're grateful for your consideration and attention, and we have gone ahead and sent over written testimony on each of these bills as a follow-up. And I'm happy to take any questions. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Alright. Thank you, Lauren.
SPEAKER25 - Mr. Cheers.
SPEAKER1 - -- a question?
SPEAKER32 - I do
SPEAKER1 - have a question. Madam chair.
MORAN - Thank you so much. Lauren, thanks for appearing. You know, the problem with housing is really challenging all of Massachusetts, and certainly, the Cape And Islands have unique, and barriers. But, you know, I'm looking at, the even wider effects. I mean, if we were able to have more housing on the cape, wouldn't that also lessen the traffic that everyone encounters when they're trying to, you know, get to their seasonal home or take a vacation when you have even a positive effect on climate change, when you look at transportation being 40% of the problem, what are the what other positives can you think of? - It's a great question, Chair Moran. I think you're absolutely right. There are definitely a lot of ripple effects with this issue. Our most recent estimates that we've seen are showing that about 30% of our workforce is daily commuting back and forth, the born in Sagamore Bridges, which we know is a big issue right now. In terms of the replacement and trying to fund that major infrastructure effort. We see a lot of issues with transportation backups, particularly in summer with our high visitation numbers, and that creates a lot of challenges for our workforce and our employers who are really importing the workforce at this point because of a lack of affordable housing options. One7491 of the other benefits of this bill that7493 I could see is that it redirects the revenue that would come into affordable housing trusts at the municipal level. And what that would allow for is a flexible source of funding, which doesn't currently exist. To support some of this missing middle housing. So the the elusive housing that serves the needs of folks who don't call 5 for traditional assistance, but still can't afford to enter the market. So that's just scratching the surface. There are lots more benefits but for sure, transportation, climate, and local economics are all at stake here. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER32 - Thank you.
SPEAKER31 - Thank you.
SPEAKER1 - That was the questions? Alright. Thank you. Thank you. Deborah Tannes.
DEBORAH TENNIS - HB 2715 - SB 1780 - Good afternoon. My name is Deborah Tana. I am co-owner of Corbin Table Kitchen And Bar, which is like a 60-seat restaurant in Plymouth, Massachusetts, and I am here today to, speak in support of Houses Bill 2715 and SB 1780, which are acts to promote jobs and economic growth7574 in tourism, visitation and hospitality. So I am one of those businesses that Vince was mentioning that is on Main Street, and, we are located in one of The biggest draws in the state, Plymouth, Massachusetts is America's hometown. And I can tell you that most of our business being on Main Street in Plymouth, Massachusetts in the off-season, what most people would consider to be off-season, is based on locals, and we have a huge local following. And then in the summertime, which is supposedly peak season. That's when we see a drop off. A lot of our locals are doing other things. They know we're a tourist town, so they go and do other things. Our business drops. The only thing that we have to keep us afloat is tourism,7625 and I can tell you honestly, if we didn't have promotions like that we get through C Plymouth, for instance, our tours, our numbers would be further down than they are. We absolutely need tourism promotion, in, our town for our business, and I urge you all to vote and support both of these bills. Thank you. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER32 - A quick 1.
SPEAKER1 - Sure.
SPEAKER14 - Sure. Thank
SPEAKER1 - you. You're driving. So --
SPEAKER27 - I appreciate it.
MORAN - I do appreciate it. First of all, I may you know, with unapologetic bias, Courtney Tables is an incredible restaurant. Great venue. Great. Great menu. Appreciate that. But my question is, how hard is it to keep employees when it's a small business, you're really dealing with so much, unpredictability.
TENNIS - Well, we do have a huge we do have fluctuation. I mean, I think that we're probably better than some, although I will 1 of the other points that I wanted to make, Senator Moran was that almost all of our businesses in Plymouth are like mine. We're small. We don't have the budgets, like, you know, illegal seafood would have to market ourselves. So the only marketing vehicle that we really have is social media, which, I mean, you've reached your followers and places and, like, tourists. That's the only advertising we really get. So it does make a huge difference when you that's all the revenue that is there and the advertising that you have for the mint streak businesses. We do see fluctuations and it is hard and we do, you know, we have to cut people in the evenings you know, some of our servers, and now their their checks go from large amounts. And I can tell you that some of our servers are making $60 an hour. Which is, you know, not low-wage hospitality. You know, these are, these are good paying jobs. And when you have to cut people during the course of an evening, you feel terrible. We try and keep some of them7760 afloat and kind of make up the7762 difference for them. But, we absolutely need more to go into it, from a state level and we need more revenue just to help us out on Main Street. And just to add 1 more thing, I'm also a vice chair of the downtown waterfront district as well, in Plymouth, which is a newly formed organization. To help promote our downtown waterfront district area, not just during the tourist season, but, during, you know, to our locals as well. And we're trying to put together different events and things like that. So these additional promotional funds go a long way toward bringing other guests in for these events as well. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER32 - Well, thanks. Thanks for your representation. I appreciate it, and thank you to chair.
LINSKY - Thank you. I just wanted to, send you a deal with your restaurant. I've sent a customer there now a couple of times. It's a great place to go for a commensurate and either Memorial Hall or the Spire Center. I'm a big opponent of sort of local art centers and local concerts, and Plymouth is now doing a great job with those 2 venues. And then you've got several big restaurants including yourself, which makes for a great evening.
TENNIS - Thank you very much. I do agree with that, and I have to say that, you know, the Spire Center, in particular, because it's literally right next door to us, does a lot for our business, and we can definitely see when there is no show at the Spire Center. We're much slower, during the course of an evening. So, you know, extra promotion for tourism also helps venues like that which in turn helps venues like ours. So, I mean, it's all, you know, hand in hand.
LINSKY- We have a very similar situation in my district indaps on native with the Center for the Arts in native. And it's the main 1 night they have a show. It completely shows the restaurants at Dodza. So you're saying? SHOW NON-ESSENTIAL DIALOGUE
SPEAKER34 - Absolutely. Yeah. Absolutely. Thank you. Thank you very much.
SPEAKER1 - Thank you, Deborah. John Samack,
JOHN ZAMAC -HB 2715 - SB 1780 - John Zamac is hard to query. Yes. Thank you for this opportunity. Good afternoon. I'll introduce myself. I own and operate in winemaker at Hardrick Vineyard and winery in Hardwick, Massachusetts, which is Worcester County. So center of the state I am, supporting and asking for your support with House Bill 2715 and Senate Bill 1780. I was born and raised and farmed and then been in business my whole life in Central Massachusetts. And, now more than ever is the time to step on the gas pedal, to keep these people coming to our farms, to our businesses. And with tourism, and agritourism, in particular, and agritainment, it's very important that we, grow this sector as far as tourism, and if you could please support these bills. I know my family will appreciate it, and I have 4 full-time employees, We're heading in7962 the right direction as far as tourism7964 and, agri agritourism go in Central Mass. So7968 we ask for your support. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you very much. Do you want me to take questions? That concludes, the sign ups for testimony today. Is there anyone else joining7980 us that was to testify?
Hearing none, I will entertain a7986 motion. Is there a second?
SPEAKER11 - Is it good to
SPEAKER1 - post today, Sharon? 2nd? 2nd. Smotion in a second. All those are paid with say I? I have to acknowledge you post. This hearing is concluded. Thank you all.
© InstaTrac 2025