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Small Tax Break Kicks In Wednesday For Mass. Residents

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Massachusetts State House. (Photo by Darren McCollester/Getty Images)

Massachusetts State House. (Photo by Darren McCollester/Getty Images)

BOSTON (AP) — Massachusetts taxpayers will ring in the new year with a tax cut — but a very small one.

The state’s income tax rate drops from 5.25 percent to 5.2 percent on Wednesday. A state law requires an automatic .05 percent reduction in the rate when growth in state revenues exceeds certain benchmarks.

The Revenue Department says tax collections through November were running $766 million, or 9.7 percent, ahead of the same period in the previous financial year.

For most taxpayers, the Jan. 1 reduction will save less than $50 over the course of the year. But it will have an impact on state finances, with officials predicting a $65 million loss in revenue the state would have otherwise taken in for the remainder of the financial year that ends July 1.

Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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