Transcript Highlights:

• That is real money that could otherwise go to wages, benefits, reinvestment, or simply keep...
• The tipped employee is getting their wages. Of course, yes. Thank you for the question.
• Just as an example, Colorado gives retailers with less than a million dollars of taxable sales... ...
• gives retailers with less than a million dollars of taxable sales, they get to retain 4% of the state
• for that month would be taxable in goods, back out sales tax.

Summary: The Special Legislative Commission on the Future of Payments and Sales Transactions by Credit Card and the Impacts for Small Businesses held a public hearing chaired by Senator Paul Feeney and Representative Jamie Murphy. The commission reviewed its charge to gather input on payment trends, cashless transactions, credit card fees, mobile payments, buy now/pay later, and related issues affecting small businesses. Representative Sean Garballey testified in support of maintaining the current card system, emphasizing tourism’s importance to Massachusetts and arguing that universal card acceptance and interchange stability are especially important with major upcoming events and visitors. A large portion of the hearing focused on independent restaurants and small businesses arguing that credit card processing fees are burdensome and unfair when applied to sales tax and gratuities that are not business revenue. Testifiers including Jen Ziskin, Kristen Canty, Nancy Cushman, Kerry Colzer, and others described razor-thin margins and said restaurants pay fees on money passed through to the state or employees. Ryan Lotz also urged reforms to chargebacks, including refunding chargeback fees when merchants prevail, requiring consumers to contact businesses first, and making fees proportional. In response, credit union and banking representatives, including Alex Vereen, Brad Popolado, Deb Peters, and Keely McEwen, argued that interchange funds fraud protection, card infrastructure, and consumer protections, and warned that state-specific changes could create compliance burdens, higher costs, or reduced access to services. Several witnesses addressed legal and policy questions. Dan Swanson and David Montero said states have authority to regulate aspects of the payment system, but Montero warned that state-specific rules could create uncertainty and conflict with federal banking law. Julian Morris and other industry witnesses argued that card payments benefit consumers and merchants by reducing cash-handling costs and increasing spending, while critics of reform said changes could shift costs into bank fees or reduced rewards. Commission members questioned whether sales tax could be separated from card transactions, whether surcharging should be considered, and whether vendor compensation or other state-level relief might be more workable. The chairs said they were exploring a narrower, targeted approach rather than a broad overhaul, and announced plans for one additional public hearing to allow further testimony.

Transcript Highlights:

• House Bill 2191 deals with liability for unpaid worker wages in the construction industry.
• It just makes it so that it’s not taxable. That’s just, I want to say, the lay term.
• And there's also the Wage Recovery Task Force, which is working in this space as well.
• Also, you know, how many of these unpaid wage claims are coming from...
• We stand with the legislature to fight against wage theft and the underground economy.

Summary: The Labor and Workplace Standards Committee heard testimony on several bills. HB 2303 would prohibit employers from requesting, requiring, or coercing employees to receive subcutaneous microchip implants, with enforcement through L&I complaints, civil penalties, and private lawsuits; the sponsor said it was a preventive labor standard and noted there was no opposition. HB 2144 would require employers to give written notice before using electronic monitoring for employee performance evaluations, and testimony split between labor supporters, who said workers should know how they are monitored, and business, local government, trucking, retail, construction, and law enforcement representatives, who raised concerns about broad definitions, safety uses, and litigation exposure. HB 2190 would expand collective bargaining rights for language access providers so missed or canceled appointments could be bargained as compensation; interpreters and union representatives supported it, saying they lose income when clients no-show, while the sponsor said the bill would clarify bargaining rights without changing employment status. The committee also heard HB 2345, a technical change to the state paid family and medical leave premium split in response to IRS guidance. Staff explained the proposed substitute would shift the employer contribution from the medical share to the family share so benefits would not be treated as taxable wages, while keeping the overall premium burden roughly the same; supporters called it a common-sense fix, and some business and school district witnesses said they wanted to avoid additional taxes and preserve program stability. The most extensive debate was over HB 2191, which would make property owners and direct contractors liable for unpaid wages and benefits in construction projects, with exceptions for government and small residential properties. Workers, unions, the Attorney General’s office, and some contractors supported the bill as a way to combat wage theft and level the playing field, while industry groups and subcontractors argued it would impose broad liability on responsible contractors, raise costs, hurt small businesses and minority-owned firms, and should be narrowed with safe harbors or right-to-cure provisions. No votes were taken; the committee held hearings on the bills and adjourned after testimony.

Transcript Highlights:

• through the state longitudinal data system, allowing Dox and other state agencies to provide certain wage
• state tax to provide uh uh and other state agencies<00:03:34.120><c> certain</c><00:03:34.640><c> wage
• </c><00:03:36.439><c> okay</c><00:03:36.720><c> up</c><00:03:37.000><c> first</c> agencies certain wage
• data okay up first agencies certain wage data okay up first we<00:03:37.560><c> have</c><00:03:38.120
• </c> relating to taxation so for taxable relating to taxation so for taxable years<00:16:13.639><c> beginning

Summary: The Committee on Labor and Technology heard testimony on several measures. SB 338, relating to taxation, would temporarily reinstate the Act 221 technology infrastructure renovation tax credit and expand eligible technology-enabled infrastructure to include data servers; Tax Department said it had no requested changes, SurfPAC supported the bill, and the Tax Foundation offered comments. Members later advanced SB 338 with amendments, including a report to the Legislature before the 2029 session and technical changes. SB 1491, on departmental data sharing, would add the Department of Taxation to the state longitudinal data system to share aggregated wage data; UH, Hawaii P20, and the Tax Foundation supported it, and Taxation said it could comply as written. The committee amended the bill to also include DBEDT and then passed it with amendments. The committee also considered SB 1156 on sexually explicit deepfakes, SB 853 on an immigration services trust fund, SB 436 on limiting State Fire Marshal service to three terms, and SB 1034 on rest periods in the food service industry. The Attorney General said SB 1156 was unnecessary because existing law already covers AI-created deepfakes, and the committee deferred the bill. SB 853 drew support from DLIR/Office of Community Services and civil rights advocates, but opposition testimony noted substantial public opposition; the committee deferred the measure, saying existing resources from Act 7 made the trust fund premature. SB 436 drew concerns from the State Fire Council representative that term limits would add complications, but the committee passed it with amendments. SB 1034 drew mixed testimony: DLIR stood on comments, the restaurant association supported the intent but suggested changing the five-hour threshold, and the Hawaii Food Industry Association opposed it over the lack of a definition of food service industry; the committee amended the bill to add that definition and passed it with amendments. At the later 3:15 p.m. decision-making-only agenda, the committee deferred SB 730 indefinitely after conferring with the PSM chair, saying it was special legislation needing further work in the interim.

Transcript Highlights:

• We talk a lot about how it defrauds workers of their wages and benefits, but it's also really defrauding
• We talk a lot about how it defrauds workers of their wages and benefits, but it's also really defrauding
• and benefits but it's also their wages and benefits but it's also really<00:10:54.079><c> defrauding
• Obviously, the entire amount of the credit carryover is limited to the five succeeding taxable years.
• Obviously, the entire amount of the credit carryover is limited to the five succeeding taxable years.

Committee: Senate Taxes

Transcript Highlights:

• Beginning January 1st, 2028, a 9.9% tax is imposed on the receipt of Washington taxable income.
• In order to determine a person's Washington taxable income, it starts with the federal adjusted gross
• income for that taxable year.
• Yet the people doing this essential work are often paid poverty wages, and that is not right.
• My wages haven't kept up, and neither has anyone else's.

Committee: House Finance

Transcript Highlights:

• So effectively, the first $12,500 of income is not taxable because your standard deduction was raised
• And you can see that the 7.5% kicked in at any taxable income in excess of $150,000.
• So we repealed those in favor of a flat rate, and it's a flat 5.5% rate of all taxable income.
• The second tier kicked in at 2.75% for each $1,000 in excess of $300,000 of taxable capital.
• That is 50% higher than the average state wage today.

Summary: The House Ways and Means Committee met on March 10, 2026, for a series of informational presentations rather than bill hearings. House Fiscal Division staff reviewed the state’s tax structure, the 2024 third special session tax reform package, and the Revenue Estimating Conference process. They explained the move to a 3% flat individual income tax, a 5.5% flat corporate income tax, the higher standard deduction and retirement-income exclusion, the repeal of several deductions and credits, the repeal of the corporate franchise tax, and the expansion of the sales tax base to certain digital goods. Staff also walked through tax exemption data, showing the size of exemptions relative to collections, and discussed forecasted revenue gaps in the out years, including the effect of the scheduled sales tax rate reduction and the return of transportation-related revenues to their prior dedication. Members asked about declining mineral revenues, digital sales tax collections, corporate collections, and the impact of tax credits and exemptions. Division of Administration and Legislative Fiscal Office staff said lower oil and gas prices, long-term production declines, and the timing of corporate payments were major factors in revenue trends, and that it will take at least another year or two of tax returns to fully understand the reform’s effects. They emphasized that corporate collections are still below the $600 million threshold that affects the state general fund and Revenue Stabilization Fund, though the forecast remains $900 million. The committee also discussed surplus and excess revenues, the distinction between discretionary and non-discretionary spending, and how current-year and prior-year balances are allocated under the constitution. A significant portion of the meeting focused on the relationship between Ways and Means and Appropriations. Chairman McFarland stressed that new fiscal-note bills can force cuts elsewhere if revenue is not available, and urged members to coordinate early with fiscal staff before advancing costly legislation. Members also asked how pending constitutional amendments on teacher pay and inventory tax might affect the budget; staff said the teacher stipend proposal is not currently funded in the executive budget and that the inventory tax proposal would mainly affect local governments and any reimbursements from the Revenue Stabilization Fund if approved. The committee then heard from Louisiana Economic Development Secretary Susan Bouchoux, who reported strong results from recent reforms, including $92 billion in capital investment, 37,000 new jobs, a record year of announcements, a top-10 corporate tax climate ranking, and a pipeline of 189 active projects representing nearly 42,000 potential jobs and $280 billion in potential investment. Members praised LED’s work and discussed the need to pair economic development with workforce training, infrastructure, and predictable tax policy.

Transcript Highlights:

• The base for the individual income tax is called Minnesota taxable income.
• We have state additions, so things that are not included in federal taxable income but are subject to
• So the sum of those different parts results in Minnesota taxable income.
• income but are subject to the taxable income but are subject to the state<00:13:02.600><c> income</c
• So you can start with federal taxable income for them.

Committee: House Taxes

Transcript Highlights:

• are effectively acting as tax collectors for the Commonwealth and payment pass-throughs for employee wages
• That is real money that could otherwise go to wages, benefits, reinvestment, or simply keep... ...real
• money that could otherwise go to wages, benefits, reinvestment, or simply keeping a restaurant alive
• Just as an example, Colorado gives retailers with less than a million dollars of taxable sales— They
• for that month would be taxable in goods, back out sales tax.

Summary: The Special Legislative Commission on the Future of Payments and Sales Transactions by Credit Card and the Impacts for Small Business held a public hearing focused on credit card interchange fees, cashless transactions, chargebacks, fraud, and possible reforms affecting small businesses in Massachusetts. Chair Paul Feeney opened the meeting, outlined the commission’s charge, and noted that the hearing would hear from small business owners, industry representatives, and others on the effects of payment trends and proposed policy changes. Representative Sean Garballey testified first, arguing that universal card acceptance and the current interchange system are important to Massachusetts tourism and should not be disrupted ahead of a busy summer season. A large portion of the hearing featured independent restaurant owners and advocates, who said processing fees are especially burdensome because restaurants operate on very thin margins and are charged fees on sales tax and tips that are not retained as revenue. Testifiers including Jen Ziskin, Kristen Canty, Nancy Cushman, and Kerry Colzer described rising operating costs and gave examples of annual or monthly fee totals, urging relief from fees on tax and gratuity amounts. Ryan Lotz also asked for chargeback reforms, including refunding chargeback fees when merchants prevail, requiring consumers to contact businesses before disputing charges, proportional fees, and safeguards against repeat abuse. Several witnesses, including Dan Swanson, argued that states have authority to regulate aspects of the payment system and cited the Illinois litigation and federal court rulings as support for state action. Opposing testimony came from credit unions, banks, payment industry representatives, and policy groups, who warned that changing interchange rules could create compliance burdens, reduce rewards, raise account fees, and shift costs elsewhere. Witnesses such as Alex Vereen, Brad Popolado, Keely McEwen, David Montero, Hunter Hamburlin, and Luke Bondar emphasized fraud prevention, network security, consumer protections, and the need for a stable, uniform payment system. Some suggested alternatives such as vendor compensation, surcharging, instant payments, or QR pay code standards, while others argued that sales tax and tip amounts cannot easily be separated within current card-network architecture. The chairs said the commission is still exploring options, discussed possible state-level solutions, and announced plans for one more public hearing before moving toward recommendations and a report. The commission then voted to adjourn.

Transcript Highlights:

• Uh, wage and salary disbursements.
• </c><01:19:48.880><c> and</c> scenarios in the Kentucky wages and scenarios in the Kentucky wages and
• </c> wages and salary solid growth rates. wages and salary solid growth rates.
• </c> personal income work better than wages personal income work better than wages and<01:39:13.119><
• </c> um u other there's a lot non-t taxable um u other there's a lot non-t taxable items<01:49:06.560

Summary: The meeting focused on preliminary fiscal 2026 revenue estimates and the governor’s office request for an official revision to fiscal 2026, with members reminded that any estimate adopted now would not bind the December official estimates. Staff from S&P Global walked through three forecast scenarios—control, optimistic, and pessimistic—based on recent federal tax changes, tariffs, and other policy developments, emphasizing that the outlook remains highly uncertain. Under the control scenario, the presentation projected below-trend real GDP growth of 1.8% in fiscal 2026, slowing to 1.5% by fiscal 2028, with unemployment peaking around 4.5% and the Federal Reserve cutting rates three times to a long-run range of about 2.75% to 3%. The optimistic scenario assumed lower effective tariffs, stronger growth, and better labor and housing outcomes, while the pessimistic scenario assumed a broader trade war, higher effective tariffs, faster deportations, weaker employment and consumer spending, and unemployment rising to about 6.3%. Speakers also noted that the forecast was prepared before later BLS revisions and that recent data on inventories and AI-related investment made the recent quarters look unusually volatile. Members discussed how the current fiscal 2026 outlook compared with earlier assumptions and noted that the eventual revenue revision may be smaller than the spread between the optimistic and pessimistic economic scenarios. The governor’s office and committee members also reviewed sector-specific impacts, including manufacturing, housing, light vehicle production, exports, and consumer sentiment, with particular concern about Kentucky’s auto and housing-related industries. No votes or formal actions were taken in the portion provided.

Transcript Highlights:

• </c><00:34:39.040><c> It</c><00:34:39.280><c> shows</c><00:34:39.520><c> what</c> minimum wage, some
• It shows what minimum wage, some Alice.
• It has deductions applied to their gross income, which could be from wages, bonuses, rents, interest,
• ,</c> income, which could be from wages, income, which could be from wages, bonuses,<01:01:46.559><c>
• Do we know like of um taxable income?

Bills: HB2488 , HB2456

Committee: House Human Services & Homelessness

Summary: The committee heard testimony on HP 1972, which would create a nonrefundable family caregiver tax credit, and on a related tax measure to increase the existing dependent care tax credit. Supporters of HP 1972, including AARP, the Executive Office on Aging, the Hawaii Public Health Institute, Hawaii Children’s Action Network, and others, said unpaid caregivers are essential to keeping kūpuna and other loved ones at home and described significant out-of-pocket costs. The Department of Taxation and the Tax Foundation raised technical concerns, including the need to avoid overlap with existing credits and to prevent double-dipping. The department said taxpayers can claim credits to the extent allowed, but recommended explicit language barring the same costs from being claimed under more than one credit. No vote was taken in the excerpt, and the chair moved the bill along after questions. The committee then heard HP 1975, which would repeal the sunset on the state rent supplement program for kūpuna. AARP, Catholic Charities Hawaii, the Executive Office on Aging, and others supported making the program permanent, saying it helps low-income older adults avoid eviction and homelessness and allows them to remain in affordable housing. Catholic Charities described clients who were paying unsustainable shares of income for rent before receiving the supplement. Members also shared a constituent example of an elderly retiree who needed the subsidy to stay housed. Written support was noted from additional organizations and individuals. Next, the committee took up HB 1706, which would expand Medicaid prospective payment reimbursement to include mental health services furnished in federally qualified health centers and rural health clinics by mental health professionals under supervision. The Office of Hawaiian Affairs supported the bill, and DHS said it appreciated the intent to address workforce shortages and expand training, but cautioned that unlicensed professionals cannot currently bill Medicaid and that a state plan amendment would be needed, with limited precedent for approval. Members asked about the likelihood and timing of federal approval and whether the bill could help rural areas; DHS said approval is uncertain and the process can take time, though it saw possible alignment with the state’s rural health transformation efforts. The committee also discussed HB 546, a three-year health coverage continuity pilot program for people losing Medicaid coverage. DHS, the Attorney General’s office, DCCA, Catholic Charities, the University of Hawaii, and others testified, with DHS warning that federal changes could increase uninsured rates and that the state may need to act quickly. Catholic Charities and others emphasized the risk to Medicaid recipients, including homeless and near-elderly residents, while DHS explained the state’s existing premium assistance program for certain immigrants and compared it to the proposed pilot. The excerpt ends during discussion of that comparison, with no vote shown.

Transcript Highlights:

• They only provide a 60% wage replacement up to the Social Security taxable wage cap.
• :07.480><c> taxable</c><02:12:08.360><c> wage</c><02:12:08.719><c> cap</c><02:12:09.679><c> um</c><02
• :12:10.079><c> so</c><02:12:10.199><c> you'd</c> Security uh taxable wage cap um so you'd Security uh
• taxable wage cap um so you'd want<02:12:10.520><c> to</c><02:12:10.639><c> have</c><02:12:10.840><c>
• for that is 1171 in the median wage for that is 1171 in the median wages wages wages 1533<04:11:24.520

Committee: House Labor, Industrial and Rehabilitative Services

Transcript Highlights:

• And you can see that the 7.5% kicked in at any taxable income in excess of $150,000.
• So we repealed those in favor of a flat rate, and it's a flat 5.5% rate on all taxable income.
• The second tier kicked in at 2.75% for each $1,000 in excess of $300,000 of taxable capital.
• The average income, average job, every average wage in Louisiana was around $45,000 a year.
• That is 50% higher than the average state wage today.

Committee: House Ways & Means

Transcript Highlights:

• Beginning January 1st, 2028, a 9.9% tax is imposed on the receipt of Washington taxable income.
• In order to determine a person's Washington taxable income, it starts with the federal adjusted gross
• income for that taxable year.
• Yet the people doing this essential work are often paid poverty wages, and that is not right.
• My wages haven't kept up, and neither has anyone else's.

Summary: House Finance held a public hearing on Gross Substitute Senate Bill 6346, a proposal to impose a 9.9% tax beginning in 2028 on Washington taxable income over $1 million for individuals, with related rules for residents, nonresidents, pass-through entities, estimated payments, penalties, credits, and revenue distribution. Staff explained that the bill would also fund several tax changes, including an expanded Working Families Tax Credit, sales tax exemptions for grooming and hygiene products, higher small business B&O credits, an early end to the B&O surcharge on very large businesses, and repeal of most retail services sales tax changes from last session. The fiscal note projected about $2.53 billion in additional state revenue in FY 2029 and $3.21 billion in FY 2030, with local revenue losses and significant Department of Revenue implementation costs. The chair also announced concerns about apparent fraud and duplicate records in the public sign-in system and set testimony rules limiting questions and shortening testimony time as the hearing progressed. The prime sponsor, Senator Jamie Peterson, said the bill was intended to make Washington’s tax system less regressive and to raise revenue for schools, health care, higher education, and other public needs while reducing the burden on lower- and middle-income residents. Supporters from labor, education, health care, child care, housing, poverty-reduction, and social service organizations argued that the bill would help fund essential services, expand the Working Families Tax Credit, and improve fairness by asking the wealthiest households to contribute more. Several individual supporters, including business owners and workers, said they were willing to pay more and described the need for better-funded schools, health care, child care, and public defense. Opponents, including former Attorney General Rob McKenna, business groups, construction and real estate representatives, and taxpayer advocates, argued the measure would function as an unconstitutional income tax, would be unstable and likely expanded over time, and would harm small businesses organized as pass-through entities. They said the bill would reduce investment, discourage entrepreneurship, and could drive businesses and high earners out of Washington. Some local government representatives supported the public defense funding but asked for more dedicated revenue and protection against local revenue losses from the bill’s sales tax exemptions. No committee vote or final action was taken during the hearing.

Transcript Highlights:

• Uh this change Minnesota taxable income.
• Current Minnesota their taxable income.
• We make no exceptions, taxable income even if not distributed. taxable income even if not distributed
• For children born taxable income.
• </c> Um, their wage. Who's responsible for putting that on the tax return?

Committee: Senate Taxes

Transcript Highlights:

• residents than there is on higher wage residents.
• residents than there is on higher wage residents.
• The state is essentially lapping the taxable capacity of our residents.
• And we tax typical wages, salaries, and pensions at, if I was reading... ...and we tax typical wages,
• Sounds appealing: taxes shouldn't grow faster than wages and salaries.

Bills: H5006 , H5007

Committee: Joint Special Joint Committee on Initiative Petitions

Summary: The Special Joint Committee on Initiative Petitions held a public hearing on two proposed ballot initiatives: one to reduce the state personal income tax rate from 5% to 4% over three years, and another to revise the state tax collection cap law (62F) so the cap would be based on the prior year’s actual collections plus wage-and-salary growth and would include surtax revenue. Committee chairs outlined the hearing process and noted that the measures would need additional signatures to qualify for the 2026 ballot if not enacted by the legislature. The committee’s expert witness, Doug Howgate of the Massachusetts Taxpayer Foundation, said the income tax proposal would lower the base rate in stages beginning in 2027 and would ultimately reduce state income tax collections by about $5.4 billion annually when fully implemented. He estimated savings would vary by income level, from a few hundred dollars for lower- and middle-income households to about $10,700 for taxpayers at the surtax threshold. He argued the proposal would improve tax competitiveness but would also require major budget adjustments, likely including reserve use, spending cuts, and possibly new revenue measures; he cited prior downturns and said the state’s rainy day fund is stronger than in past recessions, though spending growth and health care costs remain concerns. On the 62F proposal, he said rebasing the cap to prior-year collections would make refunds more likely, with modeled refunds totaling about $7.9 billion without the surtax and $10.1 billion with it over the last decade, and warned it could reduce stabilization fund deposits and constrain recovery after recessions. Proponents of both petitions, including representatives from Taxpayers for an Affordable Massachusetts, NFIB, Pioneer Institute, and the Mass Opportunity Alliance, argued that Massachusetts faces an affordability and competitiveness crisis and that lower taxes would help families, small businesses, job creation, and outmigration. They said the income tax cut would put about $1,300 a year back into the hands of average families, help pass-through businesses reinvest, and improve the state’s ability to compete with lower-tax states such as North Carolina. Their economist, Rebecca Paxton, presented a model projecting average annual revenue losses of about $680 million during the phase-in and a total net income tax revenue impact of $2 billion to $2.2 billion, while saying long-term revenue growth would be stronger after implementation. The hearing ended with committee questions and a brief dispute over a planned voter testimonial video, which the chairs said was not appropriate for the hearing at that point.

Transcript Highlights:

• Also, the National Low Income Housing Coalition's Out of Reach 2023 report reveals that a minimum wage
• </c><00:59:00.480><c> and</c> drugs but what will remain taxable and drugs but what will remain taxable
• </c><01:15:57.159><c> good</c> through access to Fair wages good through access to Fair wages good benefits
• </c> opportunities we experience low wages opportunities we experience low wages and<01:21:38.199><c>
• No questions. taxable years beginning after December taxable years beginning after December 31st<01:46

Committee: House Economic Development & Technology

Summary: The committee on Economic Development and Technology met on February 7, 2025, to hear testimony on several bills and later take up amendments and votes. HB 1405, HB 1406, and HB 1407 drew broad support from business, housing, utility, and development groups, with no opposition noted on those measures. Testifiers generally said the bills would streamline permitting, improve coordination, and expand support for chambers of commerce and small businesses. After recess, the chair recommended amendments to each bill, including changes to broaden eligibility, add reporting requirements, and include funding and staffing notes. HB 1405 was amended to allow certain projects with one state and one county permit to qualify, require annual DBEDT reports to the Legislature, and note one full-time position and $125,000 in funding; the committee voted to pass it with amendments. HB 1406 was amended to move the intergovernmental task force from DBEDT to the House Legislature, add a Speaker-appointed chair, and include a $125,000 appropriation note; it also passed with amendments. HB 1407 was amended to convert the chamber support from a grant process to an RFP process and require a 1-to-5 match on a $100,000 award; it too passed with amendments. In each case, the chair’s recommendation was adopted, with Representative Tam excused. The committee also heard HB 796, a tax-credit review bill, which drew no support and 12 opposition testimonies with three comments. Opponents, including SAG-AFTRA Hawaii, Hawaii Children’s Action Network, Catholic Charities Hawaii, and the Tax Foundation of Hawaii, argued that automatic sunset provisions or broad tax-credit cuts would burden working families and that existing review mechanisms already exist under state law. The Department of Taxation and DBEDT offered technical comments, and the Tax Foundation suggested the bill’s goals might be better addressed by cleaning up the existing review process. Later, the committee heard HB 303, which had 17 supporters and no opposition. Testifiers from the Department of Health, University of Hawaii, Hawaii State Center for Nursing, Queen’s Health System, and the Hawaii State Chiropractors Association supported the measure, with the chiropractors asking to be included in eligibility. The Hawaii State Center for Nursing said the program had been successful for five years and had room to expand. HB 577 also drew support, with the Department of Taxation offering comments and the Tax Foundation noting technical issues. HB 949 generated mixed testimony: Hawaii Housing Finance and Development Corporation and the Chamber of Commerce supported it, while Hawaii Children’s Action Network raised concerns about the bill’s effects and the lack of fiscal analysis; Sugar Creek Capital also supported the measure and clarified that the credit would not offset the GET. Finally, HB 933 and HB 959 were heard, with HB 933 receiving six support testimonies and comments focused on grocery tax relief and food insecurity, and HB 959 drawing strong support from labor and advocacy groups for its broad tax relief package, while the Tax Foundation and Hawaii Appleseed urged caution about the proposed 50% GET increase and asked for clearer fiscal analysis.

Transcript Highlights:

• are effectively acting as tax collectors for the Commonwealth and payment pass-throughs for employee wages
• That is real money that could otherwise go to wages, benefits, reinvestment, or simply keep... ...real
• money that could otherwise go to wages, benefits, reinvestment, or simply keeping a restaurant alive
• Just as an example, Colorado gives retailers with less than a million dollars of taxable sales, they
• for that month would be taxable in goods, back out sales tax.

Summary: The Special Legislative Commission on the Future of Payments and Sales Transactions by Credit Card and the Impacts for Small Businesses held a public hearing focused on interchange fees, sales tax and tip processing, chargebacks, fraud, surcharging, and the broader future of payment systems. Chair Paul Feeney and co-chair Rep. Jamie Murphy opened by explaining the commission’s charge and inviting testimony from small businesses, industry groups, banks, and policy experts. Representative Sean Garballey testified first, arguing that Massachusetts tourism depends on universal card acceptance and stable interchange, and urging the commission not to disrupt the current system ahead of major events expected to bring millions of visitors to the Commonwealth. A large portion of the hearing featured independent restaurant owners and advocates describing thin margins and the burden of paying percentage-based processing fees on sales tax and tips that are not business revenue. Jen Ziskin, Kristen Canty, Nancy Cushman, Kerry Colzer, and others said restaurants often operate on very small profits and that processing fees on taxes and gratuities can amount to tens or hundreds of thousands of dollars annually. Ryan Lotz also urged reforms to chargebacks, including refunding chargeback fees when merchants prevail, requiring consumers to contact businesses before disputing charges, and limiting repeat abuse. Commission members pressed witnesses on whether tax and tip amounts could be separated at the point of sale, and several witnesses said current consumer card systems do not transmit that level of detail. Testimony from credit union, banking, and payments representatives largely opposed state-level changes that would carve out taxes or tips from interchange, warning of compliance burdens, higher costs, reduced rewards, and possible effects on fraud protection and access to credit. Alex Verine of America’s Credit Unions and Deb Peters and Keely McEwen of the Electronic Payments Coalition said the payment system is complex, that interchange funds fraud prevention and network infrastructure, and that new state mandates could create operational and legal uncertainty. Dan Swanson argued states have authority to act and pointed to Illinois litigation and federal court rulings, while Julian Morris and Brad Popolado emphasized the benefits of card acceptance, the decline of cash, and the need to consider other payment methods and check fraud as well. Several witnesses discussed international payment systems, instant payments, and QR standards as possible future directions. The chairs and members engaged in extended back-and-forth with witnesses about whether Massachusetts could exempt sales tax from swipe fees, whether surcharging should be revisited, and whether vendor compensation or other targeted relief might be more workable than broad changes to interchange. No votes were taken. At the close of the hearing, the chairs said the commission would hold one additional public hearing date to be determined, after which members would begin developing next steps and a report.

Transcript Highlights:

• Minimum wage laws do not reduce employment.
• One is harking back to the minimum wage debates.
• And I get the analogy with minimum wage."
• None of that was taxable. Zero.
• None of that was taxable. Zero.

Summary: The Special Joint Committee on Initiative Petitions held a public hearing on Initiative Petition 25-21, House Bill 508, an act to protect tenants by limiting rent increases. Committee leaders explained the Article 48 initiative process and said the hearing was intended to gather testimony for a report to the legislature. The measure would replace current state law that prohibits rent control, cap annual rent increases at the lower of CPI or 5%, exempt certain properties including owner-occupied buildings of four or fewer units, subsidized, university, nonprofit, and short-term rental housing, and exempt new construction for 10 years. It would also eliminate vacancy decontrol, so limits would continue when units turn over, and enforcement would rely largely on tenants and the Attorney General through the courts. The hearing began with expert testimony from Whitney Airgood-Obrien of Harvard’s Joint Center for Housing Studies, who described Massachusetts’ severe rental affordability problems and reviewed research on rent regulation, noting mixed evidence on supply and quality effects but clearer evidence that rent regulation can slow rent growth and improve tenant stability. Supporters of the petition, led by Carolyn Chow of Homes for All Massachusetts, argued that rent stabilization is needed now to curb displacement and runaway rent increases, especially for low- and moderate-income renters. Laura Frost described her Arlington building being bought by a large firm that sought steep rent hikes, and said rent control would help prevent “tenant flipping” and community displacement. Dave Foley of SEIU Local 509 said the issue affects workers’ ability to live near their jobs, while Dr. Mark Paul and Tram Huang argued that the evidence supports well-designed rent stabilization, that vacancy decontrol encourages displacement, and that the policy should be seen as a complement to new housing production rather than a substitute. Committee members questioned supporters about the 10-year new construction exemption, the lack of vacancy decontrol, and whether rent stabilization could discourage development; supporters responded that the measure targets corporate rent gouging, that small landlords are protected by exemptions, and that production and rent stabilization can coexist. Opponents, including representatives of small property owners, chambers of commerce, and labor/building trades, argued the proposal would hurt small landlords, reduce investment, and slow housing production. They said operating costs such as taxes, insurance, and maintenance are rising faster than the proposed cap, and warned that the measure would reduce property values and tax revenue and could push investment to other states. Several opponents emphasized that many Massachusetts housing providers are mom-and-pop owners rather than large corporations, and said the policy would make it harder to maintain and improve housing. Committee members pressed both sides on the need for a middle ground between affordability and preserving development incentives, but no vote was taken at the hearing.

Transcript Highlights:

• , but maybe this suddenly makes it not taxable, but then I also do this, which makes it taxable again
• makes it not taxable, but then I also do this, which makes it taxable again.
• So you start to tax information technology, support, Newly taxable services.
• But now we're here to see guidance where it says consulting is taxable.
• But now we're here to see guidance where it says consulting is taxable.

Summary: The House Finance Committee held a work session that began with welcoming new member Rep. Janice Zahn, who introduced herself as representing the 41st Legislative District. The Department of Revenue then gave an update on the Antio-related legislation following the Washington Supreme Court decision and the 2025 session changes. DOR explained its voluntary disclosure program and the new expanded voluntary disclosure agreement for taxpayers with unreported investment income, including broader eligibility and interest/penalty relief, but said utilization has been minimal so far because additional implementation questions remain unresolved. The committee next received the annual update on the Working Families Tax Credit. DOR reported record participation in 2025, with about $205 million refunded through October and a major increase in applications after TurboTax added the credit to its filing software. Officials said most dollars went to households with children, outreach efforts remained important, and community partners and state agencies helped increase uptake. Members focused heavily on fraud concerns, especially tax preparers allegedly filing claims without applicants’ knowledge or diverting refunds; DOR said it is using fraud detection tools, training preparers, and trying to make applicants whole, but current law does not provide direct penalties against preparers. The final portion covered implementation of engrossed substitute Senate Bill 5814, which expanded sales tax to certain services. DOR described the new tax framework, its guidance process, and the large volume of ruling requests and outreach since the law took effect October 1. Committee members asked about fiscal assumptions, the scope of taxable services, and whether the department had revised its implementation estimates; DOR said the fiscal note assumed broad application absent explicit exemptions and that no expenditure revision had been made. In stakeholder testimony, Expedia and T-Mobile argued the law creates complexity and competitive disadvantages for Washington businesses, while a construction training provider said the tax raises tuition for workers seeking required certifications. School and nonprofit representatives said the tax will increase costs for special education services, arts programming, and other public-facing activities, and urged exemptions or further legislative fixes. The chair closed by noting the committee would revisit 5814 in the next session and then adjourned the meeting.

Transcript Highlights:

• The individuals that receive these apprenticeships have higher wages over time for themselves and their
• So right now, there are four wage classifications to the Department of Workforce: there's Class A, Class
• Maybe their market share is 20% prevailing wage paid by taxpayers. They pay into it.
• It would amend the tech jobs and R&D credit to provide that if... ...the credit is claimed on wages for
• an employee, those wages are limited to $500,000 per employee.

Committee: Senate Senate Tax, Business & Transportation