Changes to business-interest and trust taxes are vetoed
CONCORD — A bill that would change how trusts are taxed under the state’s interest and dividends tax was vetoed Wednesday by Gov. John Lynch.
Senate Bill 326 would exempt out-of-state trustees, grantors or beneficiaries from the tax that is currently assessed against the trust before distribution of earning or dividends.
“I am vetoing this legislation because I remain concerned about the potential fiscal impact and unintended consequences of the provisions amending our trust laws,” Lynch wrote in his veto message. “The proposed tax policy changes lack clarity, have not been fully examined and may be unfair to some taxpayers.”
The state’s law governing trusts may well need to be changed, he said, but more study is needed to determine what the impact would be before reforming the statutes.
Originally, SB 326 would have the state pay what Massachusetts owes to communities in flood protection zones.
Lynch said he has no objections to those provisions, but does object to the changes in the trust tax laws.
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