Bill Sponsors
Rogers, Paolino, E Morgan, and de la Cruz
Committee
Senate Finance
Summary
Select
This bill, known as the "Surplus Funds Tax Credit Act," establishes a requirement for the state to return money to taxpayers if the state collects more in taxes than it originally budgeted for the year. If there is extra revenue, the state must calculate the excess amount and refund it to taxpayers. The amount each person receives back is based on how much personal income tax they paid in the previous year. The bill also allows groups of citizens to sue the state to enforce this rule if the government fails to provide the refunds.
Sponsor
Analysis
Pros for Progressives
- Increases government transparency and accountability by allowing citizens to legally challenge the state if financial rules regarding surplus revenue are not followed.
- Provides a direct financial return to residents, which could offer immediate economic relief to working families who have paid into the system during the tax year.
- Establishes a mechanism that prevents the state from hoarding excess funds without a clear spending plan, potentially encouraging more precise budgeting practices.
Cons for Progressives
- Distributes refunds proportionally based on tax liability, meaning the wealthiest individuals receive the largest payouts while low-income residents receive little to nothing, exacerbating wealth inequality.
- Prevents the state from using surplus revenue to fund vital social programs, infrastructure repairs, or education, effectively capping investment in public services.
- Undermines the state's ability to save for economic downturns or emergencies, potentially leading to cuts in the social safety net during future budget deficits.
Pros for Conservatives
- Strictly limits the growth of government spending by ensuring that excess revenue is returned to taxpayers rather than being used to expand bureaucracy or create new programs.
- Reinforces the principle that tax money belongs to the people, ensuring that individuals who pay the most in taxes are rightfully reimbursed when the government over-collects.
- Empowers citizens to hold the government accountable through the courts, providing a mechanism to force the state to follow the law and limiting government overreach.
Cons for Conservatives
- Grants the judiciary significant power over state fiscal matters, potentially leading to "legislating from the bench" if judges interpret revenue calculations differently than the executive branch.
- Creates an administrative burden and cost to calculate and process refunds for every taxpayer, which could be seen as inefficient government waste.
- Allows for the recovery of attorney's fees from the state, which could encourage frivolous lawsuits by activist groups looking to drain public resources under the guise of enforcement.
Constitutional Concerns
None Likely
Impact Overview
Groups Affected
- Taxpayers
- State Budget Officer
- Department of Revenue
- Attorneys
- State Courts
Towns Affected
All
Cost to Taxpayers
Amount unknown
Revenue Generated
None
BillBuddy Impact Ratings
Importance
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Freedom Impact
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Public Services
How much the bill is likely to impact one or more public services.
Regulatory
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Clarity of Bill Language
How clear the language of the bill is. Higher ambiguity equals a lower score.
Enforcement Provisions
Measures enforcement provisions and penalties for non-compliance (if applicable).
Environmental Impact
Impact the bill will have on the environment, positive or negative.
Privacy Impact
Impact the bill is likely to have on the privacy of individuals.
Bill Status
Current Status
Held
Comm Passed
Floor Passed
Law
History
• 01/16/2026 Introduced, referred to Senate Finance
Bill Text
SECTION 1. Title 44 of the General Laws entitled "TAXATION" is hereby amended by adding thereto the following chapter: CHAPTER 73 SURPLUS FUNDS TAX CREDIT ACT
44-73-1. Title.
This chapter shall be known and may be cited as the "Surplus Funds Tax Credit Act."
44-73-2. Tax credit resulting in taxpayer refund.
(a) If net state tax revenues in any fiscal year exceed the projected revenue estimates as contained in the budget for said fiscal year, the amount of such excess, as determined by the state budget officer and reported to the director of the department of revenue by September 1 of each fiscal year, shall result in a credit equal to the total amount of such excess. The credit shall be applied to the then current personal income tax liability of all taxpayers on a proportional basis to the personal income tax liability incurred by all taxpayers in the immediately preceding taxable year.
(b) Upon receipt of the report by the director required in subsection (a) of this section, the state budget officer shall then make the determination as to whether the net state tax revenue exceeds the projected revenue estimates as contained in the budget and by what amount, if any, on or before September 20 of each fiscal year.
(c) The excess shall be calculated, and the excess amount shall be refunded to the taxpayers in proportion to the personal income tax liability incurred by the taxpayers in the immediately preceding taxable year. The percentage to determine the amount of the refund in dollars shall be calculated by the director.
44-73-3. Enforceability by taxpayers.
The supreme court or superior court may, upon the petition of not less than twenty-eight (28) taxable inhabitants of the state, not more than seven (7) of whom shall be from any one county, enforce the provisions of this chapter. If successful, said taxable inhabitants shall be entitled to recover reasonable attorneys' fees and other costs from the state incurred in maintaining such suit.
44-73-4. Rules and regulations.
The director shall take such action and shall have the authority to promulgate such rules and regulations as are necessary to implement the provisions of this chapter.
SECTION 2. This act shall take effect on July 1, 2026.
44-73-1. Title.
This chapter shall be known and may be cited as the "Surplus Funds Tax Credit Act."
44-73-2. Tax credit resulting in taxpayer refund.
(a) If net state tax revenues in any fiscal year exceed the projected revenue estimates as contained in the budget for said fiscal year, the amount of such excess, as determined by the state budget officer and reported to the director of the department of revenue by September 1 of each fiscal year, shall result in a credit equal to the total amount of such excess. The credit shall be applied to the then current personal income tax liability of all taxpayers on a proportional basis to the personal income tax liability incurred by all taxpayers in the immediately preceding taxable year.
(b) Upon receipt of the report by the director required in subsection (a) of this section, the state budget officer shall then make the determination as to whether the net state tax revenue exceeds the projected revenue estimates as contained in the budget and by what amount, if any, on or before September 20 of each fiscal year.
(c) The excess shall be calculated, and the excess amount shall be refunded to the taxpayers in proportion to the personal income tax liability incurred by the taxpayers in the immediately preceding taxable year. The percentage to determine the amount of the refund in dollars shall be calculated by the director.
44-73-3. Enforceability by taxpayers.
The supreme court or superior court may, upon the petition of not less than twenty-eight (28) taxable inhabitants of the state, not more than seven (7) of whom shall be from any one county, enforce the provisions of this chapter. If successful, said taxable inhabitants shall be entitled to recover reasonable attorneys' fees and other costs from the state incurred in maintaining such suit.
44-73-4. Rules and regulations.
The director shall take such action and shall have the authority to promulgate such rules and regulations as are necessary to implement the provisions of this chapter.
SECTION 2. This act shall take effect on July 1, 2026.