BOSTON -- Democratic leaders in the Massachusetts House have delayed a vote on a contentious package of tax hikes under pressure from business leaders and lawmakers who said they needed more time to study the bill.
The House initially scheduled a Tuesday vote on the bill, which would increase the cigarette tax by a dollar per pack and close several so-called business tax loopholes. Supporters, including House Speaker Salvatore DiMasi, said the $500 million tax package was needed to help close a $1.3 billion spending gap.
But business leaders said the loophole closings amount to another round of business tax hikes. Associated Industries of Massachusetts, which represents 7,000 Bay State employers, sent a letter to DiMasi and lawmakers on Monday urging changes to the bill.
The group asked for a series of amendments, including one that would limit the discretion of the commissioner of the Department of Revenue in developing new regulations to put the new law into effect.
"We've urged the speaker to adopt language we've provided that would more clearly specify all the rules rather than leave it up to the DOR," said AIM president Rick Lord.
Lord said the group also wanted assurances that a proposed business rate tax cut included in the bill to offset the loophole closings is approved as proposed by DiMasi.
DiMasi's plan would reduce the current business tax rate of 9.5 percent to 7 percent by 2011. A separate plan proposed by Gov. Deval Patrick would reduce the rate to 8.3 percent by 2012.
A spokesman for DiMasi said the delay until Thursday was a nod in part to the state's employers and also a response to House members who wanted more time to weigh the proposal -- the first major tax increase to come up before House lawmakers since 2002.
"The business community and members said to leadership that they wanted more time to work on this," said DiMasi aide David Guarino. "He (DiMasi) wants to give members all the time they need."
Earlier in the day, House Republicans gathered outside the House chambers to protest the tax bill, which they said would make it harder for the state to lure new businesses at a time of a looming national recession.
House Republican leader Brad Jones, R-North Reading, said one convenience store chain sent him a letter warning that a dollar hike in the cigarette tax could send customers fleeing across the border -- forcing the closing of more than three dozen stores at a loss of more than 400 jobs in Massachusetts.
If the bill passes, a carton of cigarettes could end up costing about twice as much as in New Hampshire.
"I'm sure New Hampshire is very happy to have the business come up there," Jones said. "I know every time the majority party here announces tax policy they stand up and cheer in New Hampshire."
Critics also said the bill -- which would create the fourth major change to the business tax code in five years -- could discourage new businesses from locating in Massachusetts because of the uncertainty of future tax code changes.
Senate President Therese Murray said Monday that the cigarette tax proposal has strong support in the Senate.
Patrick said he wants to see the final version of the cigarette tax legislation before deciding whether to sign it, but indicated he would support it.
"I think there is a lot of public health wisdom in a cigarette tax," Patrick said Monday after meeting with DiMasi and Murray. "I think in some form I expect to support it, but I want to see what form it takes when it reaches my desk."
(Copyright (c) 2008 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
Suspected drunk driver hits mother, two children Bishop asked Patrick Kennedy not to receive Communion Deadly crash in Sumner Tunnel kills one woman Fuel spill shut down Route 3 in Chelmsford MBTA driver honored at Gillette Stadium Bill targeting elderly drivers stalls on Beacon Hill Parents' tempers flare at youth hockey game in Bridgewater Transgender inmate to renew request for electrolysis 