Small businesses could benefit from a 50 percent increase in the city’s personal property tax exemption – to $30,000 in assessed value from $20,000 – for the fiscal year starting July 1 and onward, though Cambridge relies on the state to allow the change.
The increase would save a small business $422, up from the current $281, according to city assessors.
“We’re looking at helping businesses such as dentists offices, optometrist offices, yoga and pilates studios, beauty salons, barbershops, small restaurants, small coffee shops,” said Gayle Willett, Cambridge’s director of assessment, on Monday.
This property refers to tangible assets such as office furniture and equipment, not real estate or anything attached permanently to a building.
Since 2021, when the levels were last set, any individual, business or an organization with these assets worth $20,000 or less haven’t had to bother with personal property tax bills from the city, Willett told city councillors of staff’s home rule petition request to the Legislature. The city maintains 2,574 personal property accounts, and 60 percent now qualify for the exemption; if the home rule petition succeeds, that figure will go up to 65 percent. The taxes aren’t due until April 1.
Why not a higher level of exemption to keep more businesses in Cambridge from seeing bills?
A city analysis showed larger exemption amounts would include more chain and corporate businesses, “and we’re trying to keep it focused,” Willett said.
Councillor Patty Nolan urged the city to consider a higher amount that would exempt more businesses, and councillor Marc McGovern seconded with consideration that a lot of chains are franchised by local people. “If you think of 7-Eleven as a billion-dollar corporation, that’s one thing. If you look at 7-Eleven as a Cambridge family that has one 7-Eleven, your feelings about a chain might differ,” McGovern said.
When policies exclude chains and other “formula businesses,” sometimes those are owned and run by local people, “and they’re not millionaires,” McGovern said.
The increase wanted by assessors was important “given the volatile economic conditions and persistent inflationary pressures” that business owners face, mayor Sumbul Siddiqui said. “This is a very tangible way to offer direct strategic financial relief to each small local business.”
As in Cambridge, personal property tax exemption limits were last set for neighboring Somerville in 2021, but at $10,000. There is no current effort to raise those limits, according to the Somerville assessor’s office.
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