(781) 786-2662

To Clear Up Roads, Baker Proposes Corporate Tax Break for Telecommuting

Jul 26, 2019 | Boston Business Journal

By Greg Ryan, Jul 25, 2019

In a bid to ease the gridlock choking Greater Boston, Gov. Charlie Baker has proposed giving Massachusetts employers up to $50 million a year in tax breaks if they allow employees to work remotely and stay off the roads.

The proposal is one small part of an $18 billion transportation bond bill unveiled by Baker on Thursday. The legislation would set aside up to half of the revenue from programs like the Transportation and Climate Initiative for improving public transit. It would also support the expansion of designated bus lanes, among many other items.

One of those items is a tax credit of $2,000 for every employee that a Massachusetts employer allows to work from home or another location “closer to the employee’s residence” than the employer’s office. The tax credits, which would go to the employer, would be capped at $50 million for all employers in Massachusetts.

The goal of the proposal is to get commuters off the roads during rush hour. The tax credits would apply to “normal and regular work functions during the Monday through Friday workweek,” according to the legislation.

In a press conference announcing the bill, Baker said no other state has implemented such a tax credit, meaning his proposal would be the first of its kind. He claimed that while telecommuting is on the rise nationally, it’s not as prevalent in Massachusetts. 

“We still have a larger share of workers that ride transit rather than work from home, which is the opposite of the national trend,” Baker said, according to prepared remarks.

The bill contains little detail about how the tax-credit program would work. It directs the state Department of Transportation to draw up regulations for the tax breaks.

One of the state’s leading transportation advocates, Chris Dempsey of the lobbying group Transportation for Massachusetts, expressed some initial skepticism about the program’s effectiveness. He questioned how the state would ensure that employees are actually working from home.

“Of course we want employers to provide flexibility to their employees, but there’s no evidence yet that this is going to be an effective way to actually solve congestion,” Dempsey said. “It could serve as a distraction from tools that have been proven to be more effective.” 

Dempsey also argued that white-collar workers are more likely to be able to work remotely, meaning businesses that employ blue-collar workers may not be able to take advantage of the tax credits.

Mark Gallagher, vice president of the business group Massachusetts High Technology Council, told the Business Journal that the organization supports the proposal. He thinks employers should collaborate on managing employee commutes even beyond the tax break.

“Our executive committee and board of directors is wholeheartedly behind this idea and concept. It’s something we’ve had early conversations with other business groups about,” Gallagher said.

Material from State House News Service was used in this report.

 

 

 

Leaders of Massachusetts’ Innovation Economy

Leaders of Massachusetts’ innovation economy have much to accomplish in the next few years.

The Council distinguishes itself by specializing in complex, multi-year public policy strategies in support of conditions that protect and enhance a strong Massachusetts economy.

Learn more, contact Bernie Prusaczyk.

SEND EMAIL