Bills: HB2016 , HB2104 , HB2105 , HB2288 , HB2289

Committees: House Ways & Means , House House Ways & Means Committee of Reference

Keywords: tax penalties, filing, tax returns, administration, Arizona Revised Statutes, HB2288, foreign dividends, corporate income tax, Arizona tax, A.R.S. 43-1122, subtraction, gross income subtraction, multinational corporations, GILTI, global intangible low-taxed income, subpart F income, IRC 78 gross-up, foreign-source income, international tax conformity, corporate tax base

Transcript Highlights:

• So Massachusetts made the choice to tax GILTI income.
• The bill in front of you remedies that by restoring the 50% clawback of GILTI.
• C corporations reported any GILTI income in 2021.
• There have been updates to GILTI, now called NCTI, and the OB3 federal legislation.
• I know that they recently changed the GILTI name, but I like the acronym GILTI, because these billionaire

Committee: Joint Joint Committee on Revenue

Summary: The Joint Committee on Revenue, chaired by Senator James Eldridge and Representative Adrian Madaro, opened its hearing with a moment of silence for the late Lowell State Senator Ed Kennedy and reviewed hearing procedures and deadlines. The committee then took testimony on several corporate tax bills, including S. 2033/H. 3110 on offshore tax avoidance, H. 3248 on a manufacturing tax exemption, H. 3057 on a tiered corporate minimum tax, and S. 2041 on a corporate tax haven blacklist, along with a separate business interest deduction bill. No votes were taken during the hearing. Supporters of S. 2033/H. 3110, including labor unions, health care workers, educators, public health advocates, seniors, and several legislators, argued that Massachusetts needs new revenue to offset federal cuts to Medicaid, SNAP, health care, education, and other services. They said the bill would raise roughly $400 million annually by increasing the share of offshore profits included in the state tax base from 5% to 50%, and they framed it as a fairness measure that would require large multinational corporations to pay more while leaving most local businesses and workers unaffected. Testimony emphasized risks to MassHealth, PCA services, adult dental care, hospitals, schools, and public health programs if new revenue is not raised. Opponents, including the Mass Taxpayers Foundation and the Council on State Taxation, argued the proposal is poor tax policy and likely unconstitutional because it would tax foreign-source income without allowing foreign tax credits or a comparable apportionment method. They said Massachusetts should take a broader, coordinated approach to federal tax changes rather than a standalone bill, and warned of litigation risk and possible double taxation. Supporters such as MassBudget and former tax counsel Don Griswold countered that the bill is a reasonable rough-justice approach, consistent with federal and neighboring-state treatment, and that it would primarily affect a small number of very large multinationals. On S. 2041, the Global Business Alliance opposed the proposed tax haven blacklist, while supporting a separate bill allowing business interest deductibility.

Transcript Highlights:

• GILTI is an acronym that stands for global intangible low-tax income.
• Because GILTI is not always GILTI.
• </c> state's collecting a lot under GILTI. state's collecting a lot under GILTI.
• ,</c><00:10:30.280><c> the</c> impermissibly collecting GILTI, the impermissibly collecting GILTI, the
• </c> as GILTI. as GILTI.

Committee: House Taxes

Transcript Highlights:

• So, um, we currently tax GILTI here in Minnesota.
• So, um, we currently tax GILTI here in Minnesota.
• Uh, on their otherwise GILTI income. Is Minnesota typical?
• So, other states tax GILTI in a variety of ways.
• of GILTI.

Committee: Senate Taxes

Transcript Highlights:

• It used to be called GILTI, which wasn't lovely either.
• Suffice it to say, GILTI brings back a certain amount of income of foreign subsidiaries into the national
• You know, we do have, you know, what was GILTI, now NCTI.
• that Minnesota, in the end, conformed to this federal tax provision, now known as NICT, then known as GILTI

Summary: The joint informational hearing examined California’s taxation of multinational corporations, especially the Water’s Edge election versus worldwide combined reporting. Chairs opened by framing the issue as a review of whether current rules fairly and sufficiently tax foreign subsidiary income, given profit shifting concerns, budget pressures, and the long history since Water’s Edge was adopted in the 1980s. The first panel from the Legislative Analyst’s Office and Franchise Tax Board explained the mechanics of unitary taxation, apportionment, and the Water’s Edge election, and provided filing data showing Water’s Edge filers are a small share of returns but account for a large share of corporate tax liability. FTB witnesses said the agency already administers both methods and could handle a shift to mandatory worldwide reporting with education and outreach, though revenue estimates are difficult because foreign affiliate information is not directly available. Committee members asked about foreign government pushback, administrative burden, industries with more profit shifting, revenue uncertainty, and whether companies would leave California. LAO and FTB witnesses said pushback from foreign governments was plausible, but they did not expect major business flight because California’s tax is largely based on sales rather than physical presence. They also said worldwide reporting could reduce profit shifting but might increase revenue volatility and litigation risk. A second panel of academic and tax policy witnesses argued that Water’s Edge is a loophole that rewards aggressive tax planning, that worldwide combined reporting would better capture income tied to California, and that modern federal and international rules such as NCTI/GILTI, CAMT, and Pillar Two reduce compliance concerns and make a return to worldwide reporting more feasible. They also said California’s current system can create selection effects and may under-tax large multinationals. In the next panel, a California Budget and Policy Center witness urged eliminating the Water’s Edge election, calling it a costly loophole that benefits large global corporations over smaller domestic businesses and deprives the state of billions in revenue that could support health care and other services. A Silicon Valley Leadership Group witness gave historical context for why Water’s Edge was adopted and began outlining concerns about compliance, double taxation, and the risk of overreaching beyond income truly connected to California. No bill was voted on or advanced; the hearing was informational only, with members using the testimony to weigh the policy trade-offs and possible transition periods if the Legislature were to change the current rules.

Transcript Highlights:

• It used to be called GILTI, which wasn't lovely either.
• Suffice it to say, GILTI brings back a certain amount of income of foreign subsidiaries into the national
• You know, we do have, you know, what was GILTI, now NCTI; we have BEAT, which is the base erosion anti-abuse
• that Minnesota, in the end, conformed to this federal tax provision, now known as NICT, then known as GILTI

Summary: The joint informational hearing examined California’s taxation of multinational corporations, especially the state’s water’s-edge election versus worldwide combined reporting. The LAO and Franchise Tax Board explained the basic mechanics of unitary taxation, apportionment, and how water’s-edge generally excludes most foreign subsidiaries while worldwide reporting includes the full unitary group. FTB officials said water’s-edge filers are a small share of corporate filers but account for a large share of tax liability, and they described filing trends, industry mix, and the administrative steps needed to administer either system. Members and witnesses debated the policy trade-offs. Supporters of moving away from water’s-edge argued that it enables profit shifting, especially for large multinational and IP-heavy firms, and that eliminating it could raise significant revenue and improve fairness for smaller domestic businesses. They cited estimates of billions in potential revenue and said California already has the audit and reporting infrastructure to handle worldwide reporting, though some transition time would be needed. Opponents argued that worldwide reporting would tax foreign activity unrelated to California, create double taxation, increase compliance burdens and litigation, and could be difficult for foreign-based multinationals to document. They also warned that some of the revenue estimates are highly uncertain because foreign affiliate income is not directly observable. Committee members asked about foreign government pushback, the risk of companies leaving California, the effect on intellectual property shifting, and whether federal or Supreme Court action could block a change. Witnesses generally said major firms would be unlikely to leave because California taxes sales rather than physical presence, but some costs could be passed on to consumers. The panel also discussed alternatives such as conforming to federal international tax rules like NCTI/GILTI and adding anti-abuse rules. No vote or bill action was taken; the hearing was informational only.

Transcript Highlights:

• It used to be called GILTI, which wasn't lovely either.
• Suffice it to say, GILTI brings back a certain amount of income of foreign subsidiaries into the national
• You know, we do have, you know, what was GILTI, now NCTI.
• that Minnesota, in the end, conformed to this federal tax provision, now known as NICT, then known as GILTI

Summary: The joint informational hearing focused on California’s taxation of foreign subsidiaries of U.S. corporations, especially the state’s water’s-edge election versus worldwide combined reporting. Committee members and witnesses discussed how unitary taxation and sales-factor apportionment work, why multinational corporations are a small share of filers but a large share of tax liability, and how foreign income, profit shifting, and double taxation concerns affect policy choices. The Franchise Tax Board explained current filing rules, the seven-year water’s-edge election, and recent filing statistics showing about 21,562 water’s-edge returns in 2023, roughly 6% of C corporation filers but about half of corporate tax liability. The Legislative Analyst’s Office and FTB staff emphasized that revenue effects from eliminating water’s edge are uncertain because foreign affiliate income is not directly observable, and they noted possible revenue volatility and administrative complexity. Several committee members asked about foreign government pushback, the burden on FTB, whether certain industries are more likely to shift profits, and whether companies would leave California; witnesses generally said there was no strong evidence that firms would exit the state because tax liability is driven mainly by California sales. They also discussed how California already administers both methods, how the election can be advantageous or disadvantageous depending on a firm’s facts, and how federal reforms like GILTI/NCTI, CAMT, and OECD Pillar Two may affect the issue. The second panel presented sharply contrasting views. One professor and a tax policy advocate argued that water’s edge creates unfairness, encourages profit shifting, and leaves California with billions in lost revenue, while a Tax Foundation witness argued that mandatory worldwide reporting would tax the wrong income, create double taxation and litigation risk, and impose heavy compliance burdens, especially for foreign-based multinationals. A later panel from the California Budget and Policy Center supported closing the “water’s-edge loophole,” saying it would raise needed revenue for public services and level the playing field between large multinationals and smaller domestic businesses. No vote or formal action was taken; the hearing was informational only.

Transcript Highlights:

• It used to be called GILTI, which wasn't lovely either.
• Suffice it to say, GILTI brings back a certain amount of income of foreign subsidiaries into the national
• You know, we do have, you know, what was GILTI, now NICTI; we have BEAT, which is the base erosion anti-abuse
• that Minnesota, in the end, conformed to this federal tax provision, now known as NICT, then known as GILTI

Transcript Highlights:

• :49.360><c> to</c><00:29:49.760><c> the</c><00:29:49.919><c> guilty</c> The first change is to the GILTI
• GILTI stands for global intangible low-tax income.
• Congress has decided that they don't want to try to target a deemed intangible return anymore from GILTI
• So without that deduction, the amount of GILTI now would increase.
• One of the largest revenue raisers in that category is the GILTI modification to net CFC tested income

Bills: HR1 , HF387

Committee: House Taxes

Keywords: January 6 insurrection, pardon, law enforcement, violent crimes, public safety, justice system, political accountability, Blaine, local sales tax, special tax, restaurant tax, lodging tax, admissions tax, amusement tax, hotel tax, redevelopment, capital improvements, municipal finance, bonding authority, tourism tax

Transcript Highlights:

• It used to be called GILTI, which wasn't lovely either.
• Suffice it to say, GILTI brings back a certain amount of income of foreign subsidiaries into the national
• You know, we do have, you know, what was GILTI, now NICTI.

Transcript Highlights:

• they decided to do was to create a. category of income called Global Intangible Low-Taxed Income, or GILTI
• GILTI income, net CFC tested income, or NCTI, is computed on a much broader base.

Committee: House Revenue Stabilization & Tax Policy Committee

Transcript Highlights:

• They're moving from a system called GILTI to a system called NECTI.

Bills: SB240

Committee: House House Taxation & Revenue

Keywords: capital outlay, capital projects, severance tax bonds, general fund appropriations, supplemental severance tax bonds, UNM School of Medicine, University of New Mexico, infrastructure, state buildings, courts, schools, higher education, road improvements, water and wastewater, tribal infrastructure, tribal projects, public safety, housing, emergency services, bonding

Transcript Highlights:

• It's called the GILTI tax, Global Intangible Low-Taxed Income, and essentially this federal government
• It's called the GILTI tax, Global Intangible Low-Taxed Income, and essentially this federal government
• It's called the GILTI tax, Global Intangible Low-Taxed Income, and essentially this federal government
• It's called the GILTI tax, Global Intangible Low-Taxed Income, and essentially this federal government

Summary: The meeting was an introductory Ways and Means Committee orientation led by Chair John Janigian. Members went around the room introducing themselves, with several returning legislators and several freshmen describing their backgrounds in business, education, public service, finance, transportation, journalism, military service, and nonprofit work. Janigian explained his own legislative history and professional background, and other members, including Bill Bolton, Fred Doucette, Mary Ford, Jim Tierney, Scott Brier, Thomas Oppel, Mary Murphy, Representative Spar, Susan Elberger, Dennis Malloy, Jordan Ulery, and Julius Soti, briefly described their prior experience and reasons for serving on the committee. The chair then outlined the committee’s role. He said Ways and Means is responsible for revenue estimates that Finance will use to determine how much the state can spend over the next biennium, and that the committee would spend the next five to six weeks developing its best revenue estimate, due around February 15. He also explained that the committee hears from state agencies and departments about how taxes are created, collected, and performing against expectations, and that it reviews bills affecting state revenue, including tax increases, tax decreases, tax removals, and fee-related measures. Janigian noted that the committee had five bills at the time of the meeting and expected more to be referred. He explained that most would be first-committee bills, though some second-committee bills could come over if they involved taxes or fees after passing policy committees. He used marijuana-related legislation as an example of a bill that might first go to another committee and later reach Ways and Means if it had fiscal implications. No votes were taken; the meeting was informational, and members were told how to participate in hearings and follow-up questions during regular committee work.

Transcript Highlights:

• It also created a new income exclusion called Global Intangible Low-Taxed Income, or GILTI, that is meant
• To go along with GILTI, the TCJA enacted a deduction for foreign-derived intangible income to provide
• This GILTI subtraction was later repealed during the 2023 Minnesota session.

Committee: Senate Taxes

Transcript Highlights:

• revenue losses from flawed conformity again, this time to the federal anti-tax avoidance rules known as GILTI

Committee: Joint Joint Committee on Revenue

Summary: The Joint Committee on Revenue held a public hearing on H. 4975, Governor Healey’s bill to manage the impact of federal tax changes from the One Big Beautiful Bill Act (OB3) on Massachusetts. Secretary of Administration and Finance Matt Gorowitz said the bill would phase in selected corporate tax changes over time, avoid a $442 million FY26 revenue hit, preserve the current-year budget, and add a few related changes, including expanding the pass-through entity excise to income subject to the 4% surtax, delaying large federal tax changes over $20 million by one year, limiting opportunity zone benefits to Massachusetts investments, adjusting DFML contributions to match IRS guidance, and aligning casino slot-winnings reporting thresholds with federal law. Committee members questioned the administration about why it chose phased conformity rather than full decoupling, the effect on the budget if the bill does not pass, the purpose of the pass-through entity change, opportunity zones, and the slot-machine threshold and family leave provisions. Public testimony was sharply divided. MassBudget, Progressive Massachusetts, and Don Griswold of the Center on Budget and Policy Priorities urged the committee to go further and permanently decouple from the five most costly OB3 corporate tax provisions, arguing that automatic conformity is fiscally risky, rewards investment outside Massachusetts, and has already caused or could cause large revenue losses. Labor and public-sector witnesses, including leaders from the Massachusetts Teachers Association, AFT Massachusetts, SEIU 509, the Massachusetts AFL-CIO, and building trades unions, also called for permanent decoupling, warning that the federal law will deepen state budget pressures, harm schools, health care, human services, and infrastructure, and shift costs onto workers and public programs. Several speakers said Massachusetts should not adopt federal corporate tax cuts that mainly benefit wealthy individuals and corporations. Other testimony focused on specific provisions. Unite Here Local 26 asked the committee to strike the casino slot-winnings threshold change from $1,200 to $2,000, saying the current limit helps identify problem gambling, creates an opportunity for intervention, and supports union jobs. The Massachusetts Society of CPAs supported the administration’s phased approach, especially the research and experimental expense deduction, citing the importance of certainty for business filers and Massachusetts’ strong R&D economy. Greater Boston Legal Services testified on the paid family and medical leave sections, explaining that the bill’s changes would align PFML payroll contributions with new IRS guidance and, if paired with administrative action, would be cost-neutral for workers and employers. No votes were taken during the hearing.

Transcript Highlights:

• revenue losses from flawed conformity again, this time to the federal anti-tax avoidance rules known as GILTI

Bills: H4975

Committee: Joint Joint Committee on Revenue

Keywords: federal tax changes, OBBBA, revenue impact, pass-through entities, state budget, tax relief, high-income earners, opportunity zones

Transcript Highlights:

• revenue losses from flawed conformity again, this time to the federal anti-tax avoidance rules known as GILTI

Committee: Joint Joint Committee on Revenue

Summary: The Joint Committee on Revenue held a public hearing on H. 4975, Governor Healey’s bill to manage the impact of the federal “One Big Beautiful Bill” (OB3) on Massachusetts tax law and state revenues. Administration officials, led by Secretary of Administration and Finance Matt Gorowitz, said OB3 would otherwise reduce FY26 revenue by about $442 million and argued for a phased-in conformity approach that would preserve the current-year budget while still adopting selected federal business tax provisions over time. The proposal would phase in the research and experimental expenditure deduction first, delay other major corporate provisions for two years, extend the pass-through entity excise to income subject to the 4% surtax, add a one-year delay mechanism for future federal tax changes over $20 million, limit opportunity zone benefits to Massachusetts investments, and make smaller technical changes to DFML contributions and casino reporting thresholds. Committee members questioned the rationale for phasing in rather than fully decoupling, the effect on the budget if the bill did not pass, and the treatment of opportunity zones, the surtax, and future federal tax changes. Public testimony was split. MassBudget, Progressive Massachusetts, and several labor and public-sector groups urged the committee to permanently decouple from the federal corporate tax changes rather than delay them, arguing that the bill would still send state revenue to corporate tax breaks, often for investments outside Massachusetts, and that the state should protect funding for schools, health care, human services, and other public services. The Massachusetts Society of CPAs supported the administration’s timing and the research-and-development provisions, citing filing deadlines and the importance of certainty for businesses and startups. Business and tax experts also testified that rushed conformity can create revenue losses and that the governor’s review-and-delay framework was a prudent improvement, though some said decoupling should be the default if the Legislature does not act. Unite Here Local 26 testified against sections 3 and 4, which would raise the slot-machine jackpot reporting threshold from $1,200 to $2,000, arguing the current threshold helps with problem-gambling intervention, preserves slot attendant jobs, and generates revenue. Several union leaders, including the Massachusetts Teachers Association, AFT Massachusetts, SEIU 509, the Massachusetts Building Trades, the AFL-CIO, and 1199 SEIU, urged permanent decoupling, warning that OB3’s federal tax cuts and related spending reductions would worsen budget pressures, harm public services, and shift costs onto workers, patients, and schools. No votes were taken at the hearing.

Transcript Highlights:

• It's actually GILTI — G-I-L-T-I, Global Intangible Low-Taxed Income, also known as net-controlled foreign

Transcript Highlights:

• Changes include adjustments to the bonus depreciation tax and the GILTI tax, which is the Global Intangible

Committee: House Water & Natural Resources Committee

Transcript Highlights:

• I'm all, and I was just going to add, I don't have a question about GILTI or NCTI.

Summary: The Senate Tax, Business and Transportation Committee heard and voted on several bills, beginning with SB 190, which would authorize revenue bonds for Gila Regional Medical Center to replace an aging linear accelerator for cancer treatment. The sponsor and hospital representatives said the project is critical for rural patients who otherwise travel long distances for radiation therapy. After a brief amendment changing the bond term from 20 to 30 years, the committee advanced the bill 7-0. The committee then took up SB 152, a broadband affordability and rural telecommunications bill that would keep money in the broadband fund for maintenance, expansion, and a new affordability program after the federal ACP lapsed. The sponsor and broadband stakeholders said the bill is needed to close the digital divide, while some industry witnesses supported the affordability goal but wanted changes to broaden eligibility and adjust program rules. The committee heard public testimony from supporters and opponents, then passed the bill 8-0. Next, SB 77 would require certain highway and public works contractors to contribute to apprenticeship training funds; labor groups supported it as workforce development, while highway and asphalt contractors opposed it as an added cost and argued they already run their own training programs. After extended debate about whether the 60-cent-per-hour contribution would raise project costs or simply redirect existing prevailing-wage funds, the committee advanced SB 77 on a 5-3 vote. The committee also heard SB 182, a dyed diesel gross receipts tax deduction for agricultural use, but held it for the tax package without a vote. SB 151, a corporate income tax decoupling bill intended to recover revenue lost to federal tax changes, drew strong support from tax and advocacy groups and strong opposition from business, oil and gas, and chamber representatives who called it a tax increase that would hurt investment and competitiveness. Committee members raised concerns about long-term revenue stability and business impacts, but the sponsors said the bill would restore state tax capacity and selectively decouple from federal provisions; the bill was held for later consideration in the tax package. Finally, the committee heard SB 133 on eliminating gross receipts tax on medical providers for medical equipment and supplies, and SB 212 on a ski-area construction equipment gross receipts tax exemption, with sponsors arguing both would improve competitiveness and support industry investment; both were discussed as possible tax-package items and held for further consideration.