BUSINESS TAX RATE FALLS

The state’s business corporation tax rate of 9.5 percent falls to 8.75 percent on Friday, Jan. 1, 2010 and the financial institution tax rate of 10.5 percent drops to 10 percent. The rate reductions were included as part of a corporate tax law reform bill last July that included a pair of major changes – the so-called combined reporting and check-the-box reforms – sought by Gov. Deval Patrick to bolster state tax collections and close what he called loopholes in the tax code. The Patrick administration at the time promoted that rate cut as a way to help businesses in Massachusetts, especially smaller ones, stay competitive. It was paired with tax law reforms that at the time were projected to generate $285 million in fiscal 2009, $390 million in fiscal 2010 and $269 million in fiscal 2011. At the time of the bill’s passage, Sen. Cynthia Creem estimated between 15,000 and 20,000 Massachusetts businesses would benefit from overall tax rate reductions that take effect next week.