Massachusetts Tax Rate to Drop Slightly on Jan. 1

moneyBOSTON (AP) — Massachusetts taxpayers will be enjoying a small income tax cut in the new year.

Gov. Charlie Baker’s administration announced Tuesday that all requirements have been met to automatically reduce the income tax rate from 5.15 percent to 5.1 percent, effective Jan. 1.

A 2002 state law requires the income tax rate be reduced by 0.05 percent each year that the state meets certain requirements for tax revenue growth. The rate could continue to fall in future years until it hits 5 percent.

Baker said in a statement that the tax cut is a sign that the state’s economy remains strong.

The reduction is expected to cost the state $74 million over the next six months and was anticipated in the state budget approved for the fiscal year ending July 1.

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