Mass.is sending notifications of retroactive taxes

The Boston Globe is reporting:

The tax levies are the result of a 2004 Supreme Judicial Court ruling that overturned a decision by the Legislature in 2002 to raise the state's capital gains tax rate to 5.3 percent midway through that year. The SJC ruled that the state could not change the rate in midyear, leaving the state with the choice of making the higher rate effective in January 2003 or January 2002.

Governor Mitt Romney and legislative Republicans urged lawmakers to set 2003 as the starting date, which would have meant that many taxpayers would be owed a rebate for taxes they had paid on transactions that occurred in the last eight months of 2002. Democrats rejected that plan, however, arguing that the state could not afford the roughly $275 million the refunds would cost.

The alternative favored by the Democrats, making the tax increase effective at the beginning of 2002, means that taxpayers now owe capital gains taxes on transactions made during the first four months of the year.

Yesterday, seeking to blunt the political fallout of the unusual tax increase, House Democrats approved a Senate measure to waive interest on the new capital gains payments and to exempt any taxpayer who owes $100 or less. That bill would shave about $45 million off the $150 million to $205 million that the tax hikes will reap, LeBovidge said. It would also reduce the number of people who owe money from 48,000 to 40,000, he said.

Amazing isn't it?