Senate President Karen Spilka speaks with Greater Boston Chamber of Commerce CEO Jim Rooney during an event at the Westin Boston Seaport on Wednesday, May 7, 2025. Photo by Alison Kuznitz | State House News Service
Senate Democrats are moving to study the trade-offs associated with suspending the sales tax on construction materials used in multifamily housing projects, potentially forgoing some state revenue in a bid to encourage badly-needed housing production.
Senate President Karen Spilka said a forthcoming proposal from Sen. Julian Cyr, co-chair of the Joint Committee on Housing, will explore nixing the sales tax on building materials used for multifamily housing developments in conjunction with the Healey administration. The president’s comments on the idea drew applause from the audience at a Greater Boston Chamber of Commerce event Wednesday.
The idea is expected to take the form of an amendment to the budget the Senate will debate starting May 20. Cyr, who was at the forum Wednesday, said it stems from the Unlocking Housing Production Commission’s report released in February.
The report, which noted Massachusetts has some of the country’s highest construction costs, recommended the state “provide a sales tax credit for construction materials purchased” for new multifamily projects or “substantial rehabilitations.” The credit should be applied to projects in which at least 15% of units are affordable or in communities where the median household income is less than 120% of the state average, according to the report.
“We’re going to look to file an amendment to study that issue,” Cyr told the News Service. “We want to really understand how that would make a difference in housing production, what the cost of that would be to the commonwealth.”
Cyr described it as an “internal study” from the Department of Revenue that would take roughly six months. The commission report said a sales tax exemption could help bridge financing gaps for stalled projects, make developments more financially possible for smaller builders, expand housing in “high-need communities,” and support housing revitalization efforts in rural communities.
Spilka lamented that President Donald Trump’s tariffs on Canadian goods are raising the costs of lumber and steel, along with other building materials. The Senate Committee on Steering and Policy, which is tasked with tracking shifting White House policies, had a briefing with the consul general of Canada about the issue last week, Spilka said.
“It makes it even more difficult, right? We already have an incredibly challenging situation,” Cyr said. “And look, to be fair, the challenges we see on housing are more of a homegrown challenge than a Washington or Trump challenge, right?”
