BOSTON - The Massachusetts House of Representatives has overwhelmingly approved legislation to cut the state's 12.54% bank tax to 10.5%, the same rate applied to other corporations.
Approval followed defeat of an amendment requiring institutions to report all income, including that earned out-of-state, and then apportion a percentage to Massachusetts operations as taxable state income. The proposal was designed to prevent multistate banks from shifting costs and profits to other states to avoid Massachusetts' taxes.
Lawmakers adopted an alternative plan to allow the state to seek more information about where banks earn their income and require an annual state audit of banks that earn money in Massachusetts without physical operations in the state.
The bill now goes to the state Senate, which is not expected to review it until after consideration of the state budget during the next few weeks. Gov. William Weld is expected to sign the legislation.