An Act allowing for the deduction of business interest

The legislation decouples Massachusetts from the new limitations on interest expense deductibility under IRC §163(j). This action maintains the status quo for this particular corporate tax policy and does not represent a tax break. Decoupling reestablishes the tax treatment of interest expense that existed prior to the enactment of federal tax reform. It enables Massachusetts to continue to compete with other states that have already chosen to decouple or have more favorable tax regimes than Massachusetts. Decoupling would prevent a corporate tax increase, stop a hike in the cost of capital and ensure that Massachusetts remains competitive for investment.