Beacon Hill Democrats reach deal ‘in principle’ on tax relief bill

Top Democrats on Beacon Hill said Thursday afternoon that they reached an agreement “in principle” on a tax relief bill that has sat idle in some form for more than a year, pledging to file the legislation and take it up next week.

Tax relief talks were first scrambled last summer after a once-obscure law known as Chapter 62F required state officials to send billions back to residents in the form of tax refunds. Lawmakers this year ushered a new bill into private negotiations in June after both the House and Senate passed competing versions.

In a joint statement, House Speaker Ronald Marinao, Senate President Karen Spilka, and Ways and Means Co-Chairs Rep. Aaron Michlewitz and Sen. Michael Rodrigues said they were “thrilled to announce that an agreement has been reached in principle that reconciles the differences between the House and Senate tax relief packages.”

“We look forward to filing and taking up the conference report next week, which responsibly implements our shared goal of making Massachusetts more affordable, equitable, and competitive,” the group said in a statement.

Details of the compromise were not immediately available Thursday evening but more details could surface next week when lawmakers file the bill.

Both bills varied on a few key issues, with the House lowering the short term capital gains tax from 12% to 5%, a pro-business move that the Senate did not take a swing at. Gov. Maura Healey has backed lowering the short term capital gains tax.

The Senate increased the authorization for the low-income housing tax credit by $20 million and increased the cap for the Housing Development Incentive Program, a move the House agreed with, but in a different legislative vehicle.

The House and Senate both proposed excluding estates valued up to $2 million from the estate tax, but fine details varried. The competing bills increased the earned income tax credit, the senior citizen circuit breaker, and the rental deduction.

The two legislative branches also took different approaches to reforming Chapter 62F, with the House proposing future tax rebates be paid in equal amounts to all residents regardless of how much they paid into the system.

The Senate proposed requiring monthly tax collections reports from the state comptroller compared to the likely annual cap on tax collections.

Any deal the House and Senate reach and pass will head to Healey, who filed a tax relief bill of her own earlier this year.