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Local News

April 3, 2013

Lawmakers struggle to find new way to raise taxes

(Continued)

House Revenue Chairman Jay Kaufman (D-Lexington) said he was “concerned” about the volatility of the income tax and the constitutionality of the proposal, while Rep. Randy Hunt (R-Sandwich) questioned whether state income tax credits would lower local residents’ tax burden.

Two Cape Cod lawmakers argued in favor of updating the definition of rooms subject to local hotel and motel taxes so that vacations homes and condos would be subject to the tax as well (H 2692).

“This is a growing market. There’s a shift in the way people vacation,” said Rep. Sarah Peake (D-Provincetown). Peake said she had found 6,000 Cape vacation rentals listed with one company, and 4,000 listed at another, and said the costs for a week’s stay can range from $1,500 to $10,000.

At the same time, Peake is proposing a bill (H 2753) that she said would provide amnesty for those who had failed to disclose to the Department of Revenue income received from renting out a second home.

“Amnesties tend to work best when there’s an advantage to ’fessing up, if you will, and consequences for failing to do so,” said Kaufman. “I don’t see any language in here that addresses the failure to do so.”

Peake said she would be happy to amend the bill, and to cover her bases, she said, Peake filed a bill specific to Provincetown (H 2689).

Sen. Dan Wolf (D-Barnstable), who joined Peake in seeking to group vacation rentals with hotels, also spoke in favor of a constitutional amendment to allow for a progressive income tax (S 16 and S 17).

“The way our economy is structured now, historically is different than ever before. It hasn’t been this skewed in one hundred years,” Wolf said. A potential gubernatorial candidate, Wolf said, “I would work tirelessly to take this to the public.”

Wolf said it is “bizarre” that a mechanic or clerical worker at the company where he is CEO – Cape Air – pays the same tax rate as him.

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