New MA Law Provides Economic Development Benefits and Lowers Nonprofit Audit and Review Thresholds

By Anne Cloutier December 12, 2024

Co-authored by Anne Cloutier and Leanne Scott

In late November, Governor Healey signed a much-anticipated economic development bill (also known as “the Mass Leads Act”) into law. This $4 billion package will benefit many segments of the Massachusetts economy, with the goal of boosting the Commonwealth’s competitiveness. The legislation itself can be accessed here, along with other supporting information.

Overview

Businesses in the life sciences and climatetech industries will see additional tax credits and other benefits. The Massachusetts Life Sciences Center’s mission has been expanded, and the annual tax credit authorization for the industry will be increased from $30 million to $40 million. The Massachusetts Clean Energy Center is also receiving significant funding for both innovation and deployment of climatetech technologies and to support the offshore wind industry.

Small businesses will also see expanded resources made available via the Massachusetts Growth Capital Corporation and the Massachusetts Development Finance Agency. The bill also includes policy changes in various other segments, as outlined in this press release from the Senate President’s Office issued a few days before the legislation was signed.

New tax credits for live theater and data centers were included in the package.

Expanded Review and Audit Thresholds

Of particular interest to many of our clients, the legislation immediately increased the financial statement review and audit thresholds for nonprofits. Specifically, the review threshold rises from $200,000 to $500,000 (based on gross revenue), and the audit threshold moved from $500,000 to $1,000,000 (also based on gross revenue).

This is a welcome change for both nonprofits and their management teams, as well as their advisors. It is something that has been advocated for continually for quite some time. Our understanding is that the thresholds also apply retroactively to cover any outstanding Massachusetts Forms PC.

Raising these thresholds will reduce the number of organizations requiring formal audits, and should thereby help smaller organizations from a cost and administrative perspective, allowing them to focus more of their efforts on their mission.

For more information, see the Massachusetts Attorney General’s website here.

If you would like to discuss the new thresholds applicable to nonprofits, please contact Anne Cloutier. Should you need state and local tax assistance or have questions regarding the Massachusetts legislative landscape more broadly, please contact Leanne Scott. You may also always reach out to your preferred BNN advisor at 800.244-7444.