Tech Industry Group Hires Law Firm to Challenge ‘Millionaire’s Tax’

By Greg Ryan

Mark Gallagher, an executive vice president at the tech council, told the Business Journal that while the legal arguments against the law are still being worked out, opponents would likely contend that amendments to the state constitution cannot set aside funding for specific uses.

The Massachusetts High Technology Council, one of the most vocal opponents of the proposed so-called “millionaires’ tax,” has hired the law firm Goodwin to work on a potential lawsuit that would seek to kill the proposal before it heads to voters next year.

The proposal, championed by the union-backed group Raise Up Massachusetts, would raise the income tax on residents who make over $1 million by 4 percentage points. Its backers landed a victory Wednesday when lawmakers on Beacon Hill overwhelmingly supported the measure, a vote that will put the proposal before Bay State voters as a ballot question in November 2018, barring a successful court challenge.

Arguing the tax will hurt the state’s business climate, the industry group has been raising money from its members to mount such a challenge. Lawmakers and advocates on both sides anticipate a court fight over the proposal. While the council hasn’t decided for sure to bring a lawsuit, it’s retained a trio of lawyers from Goodwin, the city’s second-largest law firm, to devise a litigation strategy.

Leading the Goodwin team is Kevin Martin, the co-chair of the firm’s appellate group with experience litigating cases before the U.S. Supreme Court and the state’s top appeals court, the Supreme Judicial Court. He is working alongside associates David Zimmer and Joshua Bone for the tech council. They also specialize in appellate law.

It’s the SJC that would decide whether the “millionaire’s tax” passes legal muster. Mark Gallagher, an executive vice president at the tech council, told the Business Journal that while the legal arguments against the law are still being worked out, opponents would likely contend that amendments to the state constitution cannot set aside funding for specific uses. All of the revenue generated by the tax, which requires amending the constitution, would be reserved for education and transportation.

If the tech council or another group is going to file a lawsuit, it will likely need to do so by the end of 2017, according to Gallagher. The SJC last year appeared to frown on challenges to ballot questions that are filed the same year the ballot is supposed to go before voters, he said.

Goodwin, one of the leading law firms in Boston’s technology industry, has a partner, private equity attorney Michael Kendall, that sits on the tech council’s board of directors.