Boston Council Committee Holds Small Commercial Tax Exemption Hearing, Seeks Working Session

BOSTON -- July 9, 2024, Boston city councillors scrutinized a proposed ordinance to adopt a small commercial property tax exemption for qualifying businesses, with no vote taken and the matter sent to a future working session. Councillor Gabriela Coletta Zapata, chair of the Committee on Government Operations and co-sponsor of Docket 0925 with Councillor Enrique J. Pepén, said the measure would have Boston opt into MGL Chapter 59, Section 5I, exempting up to 10 percent of assessed value on Class 3 commercial parcels under $1 million occupied by businesses with no more than 10 employees. Chief Financial Officer Ashley Graffenberger said roughly 6,000 properties could be eligible and that a maximum exemption scenario would shift approximately $5.8 million from those parcels onto the broader commercial and industrial tax rate. Graffenberger warned that a fully staffed nine-person taxpayer referral office would need five solid weeks to complete the required eligibility cross-checks before tax rate setting. Testifying small business owners Brad Brown of Blue Frog Bakery and Carlos Castillo of Castillo Wine and Spirits raised concerns that the state-set parameters, a $1 million property cap and a 10-employee ceiling, are poorly matched to Boston's commercial real estate market and would leave many intended beneficiaries ineligible.