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May 25, 2022
Senate committee proposes boost in tax credit, Airbnb tax
    2016-07-13 02:28:05           Web Editor:

BOSTON (AP) — The state's earned income tax credit would increase and online marketplaces such as Airbnb would be required to pay the same taxes as hotels and motels under legislation proposed Tuesday by a Senate panel.

The provisions were added to an economic development bill that is slated for debate in the full Senate on Thursday.

The earned income tax credit, designed to help low-income working families, was increased from 15 percent to 23 percent of the federal tax credit on Jan. 1. The Senate Ways and Means Committee plan calls for a further increase to 28 percent of the federal credit.

Boosting the state benefit would help to lift many families out of poverty, according to Senate President Stan Rosenberg.

"The earned income tax credit is one of the most powerful tools we have to grow the economy," Rosenberg, an Amherst Democrat, said in a statement. "Heads of households will put $300 more a year in their pockets and be able to better provide for their families."

The bill also seeks to close a loophole by making the tax credit available only to families that had lived in Massachusetts during the entire tax year.

To pay for the increase, the Senate bill would require that San Francisco-based Airbnb and similar online lodging services begin collecting the state's 5.7 percent room occupancy tax along with any additional room taxes charged by local communities.

Airbnb has reached agreements with other states and cities that require collection of occupancy taxes.

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