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Governor Baker’s Fiscal Year 2021 Budget Recommendations

January 31, 2020

Governor Baker unveiled a $44.6 billion budget for FY 2021 on Wednesday, January 22, 2020. Here are a few key takeaways proposed in the budget that may be of interest to the profession:

  1. Sales Tax Modernization 3 – Real Time Sales Tax Remittance
    a. Requires third party processors (credit card companies) to remit sales tax daily. Effective date of July 1, 2023.
  2. Sales Tax Integrity – Penalties for “Zappers” & other “Phantom-Ware” Software
    a. Imposes civil penalties and fines of up to $50,000 for any person who sells, purchases, installs, etc., “zapper” or “phantom-ware” software that falsifies electronic records of cash registers or other point-of-sale systems.
  3. Disability Employment Tax Credit 1
    a. Establishes a tax credit of up to $2,000 for businesses that employ an individual, or individuals, with a disability for a minimum of 18 months. Credit would be available on January 1, 2022 for qualified employees hired after July 1, 2020.
  4. Charitable Deduction Report
    a. Directs the Department of Revenue to conduct a study on whether to reinstate the charitable deduction following the reduction of the Part B income tax rate to 5%.