Question 5, Change State Tax Revenue Limit Initiative
Massachusetts Ballot Measure - Question 5
Election: Nov. 3, 2026 (General)
Outcome: Pending
Categories:
Budget, Spending and TaxesSummary
Question 5 would change the method of calculating the state tax revenue limit. As of 2026, Massachusetts has a state tax revenue limit that sets the maximum amount of tax revenue the state can collect in a given tax year. Any tax revenue collected by the state over the limit must be refunded to taxpayers the following year. Question 5 would change the method of calculating the limit so that it is equal to the sum of:
- the net amount of state revenue from the year prior, and
- the average growth of wages and salaries in Massachusetts over the past three years.
As of 2026, the state tax revenue limit is equal to the sum of:
- the state tax revenue limit for the prior tax year, and
- the average growth of wages and salaries in Massachusetts over the past three years.
In effect, Question 5 would result in a decrease potential state tax revenue limit each year compared to the current system of calculating the limit, because the new limit would be calculated based on the actual revenue collected by the state instead of the maximum amount of revenue the state could have collected.
Question 5 would also explicitly add income tax revenue collected under Section 2BBBBBB of Chapter 29 of Massachusetts law to the state's definition of State Tax Revenue, thus using that revenue to calculate the state tax revenue limit. That section implements an additional 4% tax on annual income that is greater than $1,000,000. The additional income tax rate, sometimes referred to as the millionaire's tax, was implemented when voters approved Question 1 in 2022. As of 2026, the revenue collected from the millionaire's tax is not included in the legal definition of State Tax Revenue and is not generally used to calculate the state tax revenue limit.
Measure Text
Be it enacted by the People, and by their authority:
SECTION 1. Section 2 of chapter 62F of the General Laws as appearing in the 2024 Official
Edition is hereby amended by replacing the definitions of Computed Maximum State Tax
Revenues and State Tax Revenues with the following -
Computed Maximum State Tax Revenues means for any fiscal year beginning after June 30,
2027 an amount determined by multiplying the Net State Tax Revenues, as defined herein, for
the immediately preceding fiscal year by the allowable state tax growth factor, as defined herein,
for the then current fiscal year.
State Tax Revenues means the revenues of the Commonwealth from every tax, surtax, receipt,
penalty and other monetary exaction, and interest in connection therewith, including but not
limited to, taxes and surtaxes on personal income (including, for purposes of any calculation
under this chapter beginning after June 30, 2027, income surtax revenues collected and deposited
into the Education and Transportation Fund pursuant to Section 2BBBBBB of chapter 29 of the
General Laws), excises and taxes on retail sales and use, meals, motor vehicle fuels, businesses
and corporations, public utilities, alcoholic beverages, tobacco, inheritances, estates, deeds, room
occupancy and pari-mutuel wagering; but excluding federal reimbursements, proceeds from
bond issues, earnings on investments, tuitions, fees, service charges and other departmental
revenues, and revenues directly attributable to the additional taxes levied pursuant to section
eighty-eight of chapter six hundred and eighty-four of the Acts of nineteen hundred and seventy-five.
SECTION 2. Effective for purposes of any calculation under chapter 62F ofthe General Laws as
appearing in the 2024 Official Edition for any fiscal year beginning after June 30, 2027, Section
2BBBBBB of chapter 29 of the General Laws as appearing in the 2024 Official Edition is hereby
amended by striking out subparagraph (d).
SECTION 3. The provisions of this law are severable, and if any clause, sentence, paragraph or
section ofthis chapter, or an application thereof, shall be adjudged by any court of competent
jurisdiction to be invalid, such judgment shall not affect, impair, or invalidate the remainder
thereof but shall be confined in its operation to the clause, sentence, paragraph, section, or
application adjudged invalid.
Resources
Official Summary
Full Text