Businesses owe state $160M
Backlog of back taxes defended as a small proportion
More than $160 million in state revenue remains uncollected — unpaid by delinquent businesses — even as lawmakers eye new levies on ordinary citizens and an overhaul of the tax code.
“Before they advocate for all new tax increases that would impact almost every person in the state, they should at the very least do a better job at collecting the taxes that are owed,” Massachusetts Fiscal Alliance spokesman Paul Craney told the Herald.
Businesses owe at least $163 million in taxes, about $39 million of which are outof-state vendors, according to the list maintained by the Department of Revenue of tax debts over $25,000 that have been delinquent for more than six months.
More than a dozen companies that owe more than $1 million include $4.4 million owed by Cafenos Inc. of West Springfield; $3.9 million owed by AMD Corp. of Tampa, Fla.; $3.2 million owed by Dan Agency Inc. of Brockton; $2.5 million owed by S&T Industrial Service Co. of Dracut; and $2.1 million owed by Homestead Direct Inc. of Centerville.
Craney warned of the portentous impact added taxes will have on small businesses, including a gas tax that legislators have been mulling over for months, as well as a multistate Transportation Climate Initiative, which would charge transportation fuel companies for the carbon emissions associated with the gas and diesel they sell.
“These legislators are very tax-and-spend hungry right now. Just this year almost every notable politician in the State House has proposed his or her own tax increase,” Craney said. “Our government should do a better job collecting the taxes that are owed before asking taxpayers to pay more.”
Eileen McAnneny, president of the Massachusetts Taxpayers Foundation and co-chair of the income tax subcommittee within a Senate Revenue Working Group charged with revamping the state’s tax code, said that members have discussed ways to ensure maximum adherence to existing laws.
“We always want to make sure we’re collecting all of the revenue that is due to the commonwealth,” McAnneny said, “but it is important to keep this in perspective.”
Both McAnneny and Jon Hurst, president of the Retailers Association of Massachusetts, argued that $163 million is a small fraction of the $29.69 billion in total revenue collected by the department in fiscal 2019.
“Look, you want people to be following the law, it’s only fair for your competitors who are following the law,” Hurst said. “But when you’re talking about a $44 billion dollar state budget, I look at that figure and say, ‘Well, that’s a lot lower than I would have expected.’ I would say DOR, frankly, is doing a pretty good job of collecting taxes.”
All tax debt owed to the state is considered collectible under a 10-year statute of limitations, according to the DOR.
Spokeswoman Naysa Woomer said the DOR is, “committed to collecting tax debt it is owed, and takes several steps to receive these funds including closely coordinating with businesses and individuals and utilizing technology systems to ensure it has up-to-date records and information on amounts owed.”
The department is prevented by law from commenting on any individual taxpayer’s account or details, according to Woomer.