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Sat. Jul 13th, 2024

Boston City Council, Wu administration disagree on push to exempt small businesses from commercial tax hike plan

By meerna Jul11,2024
Boston City Council, Wu administration disagree on push to exempt small businesses from commercial tax hike plan

Boston City Councilwoman Gabriela Coletta Zapata is pushing for a small business tax exemption to provide tax relief if the mayor’s plan to raise commercial tax rates is passed. (Matt Stone/Boston Herald, file)

Wu’s administration has cooled the Boston City Council’s eagerness to partially exempt small businesses from the mayor’s plan to raise business tax rates, saying the additional assessment it would require may be unfeasible.

Finance Director Ashley Groffenberger said if the city were to adopt the small business exemption, it would require changes to a bill it sent to the state Legislature last month. It would also require a review of about 6,000 commercial properties that are likely to qualify for the tax break, she said.

“It would be a significant administrative upgrade for the department,” Groffenberger said at Tuesday’s City Council hearing on the proposed ordinance. “We estimate it would take them 24 business days or five weeks of inactivity to do the work needed to implement this in time for the tax rate to be set.”

The exemption would be built into the commercial property tax rate — which the city could raise above the state cap for four years under the mayor’s plan — and would apply to properties valued at less than $1 million and occupied by businesses with 10 or fewer employees.

Boston already has a housing exemption that excludes part of a qualifying homeowner’s property value from taxation. The mayor and City Council typically adopt the maximum housing exemption, which, according to the city’s website, saved qualifying homeowners up to $3,610 on their tax bill last fiscal year.

The City Council intends to provide similar tax breaks to small businesses, such as convenience stores, restaurants, retail stores, hairdressers and convenience stores, which it says will suffer the most from the temporary tax increase.

During the discussion and final approval of Mayor Michelle Wu’s home rule petition last month, several councilors raised concerns about the impact the city’s plan to impose taxes on businesses that exceed state limits would have on these small businesses.

The city’s tax classification bill aims to mitigate what the mayor says could be a 33 percent increase in residential property taxes caused by falling commercial property values ​​next year by shifting more of the tax burden to businesses.

Wu lobbied for the bill’s passage during a private meeting with state lawmakers this week and anticipates a formal legislative committee hearing on the issue next week, the mayor told GBH’s Boston Public Radio on Tuesday.

Councilwoman Gabriela Coletta Zapata, who proposed a local ordinance that would create an exemption for small businesses, argued that the loss of tax revenue the city would suffer from qualifying properties would be a “drop in the ocean” compared to the financial burden that higher taxes would bring to small shops.

By meerna

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