Worcester’s Dual Tax Classification System

Every fall, the Worcester City Council votes to set different rates for business and residential properties in the city’s dual tax system. Over the past four years, the Council has voted to shift a portion of the residential tax burden to commercial and industrial taxpayers. By doing so, it continues to put Worcester at a competitive disadvantage compared to surrounding communities with regard to business attraction and retention.

Our Advocacy on Behalf of Members and the Entire Business Community

The Worcester Regional Chamber of Commerce contends that reducing the gap between commercial tax rates and residential tax rates will lead to a more fair and equitable tax system in the city. Moreover, it will continue to grow the commercial workforce and tax base.

Surrounding communities, including Auburn, whose board of selectmen voted on November 12, 2019 to narrow their dual tax gap for the second consecutive year, are moving in the direction of giving relief to their businesses. In 2018, Webster voted unanimously to eliminate  the dual tax rate and went to a single tax rate making way for increased business development and more businesses to share the burden for all. On December 3, 2019, the City of Fitchburg also voted to eliminate their dual tax system and adopt a single tax rate beginning in just two weeks on January 1, 2020.

Unfortunately, as anticipated, in the City of Worcester, the majority of city councilors voted to increase the tax rate on commercial and industrial taxpayers while lowering the residential tax rate. This year’s vote will increase the commercial tax rate from $34.90 per $1,000 assessed valuation to $35.16 per $1,000 while lowering the residential tax rate from $18 per $1,000 to $17 per $1,000.

The Chamber will continue to advocate for a fair tax system in which everyone pays their fair share and in which businesses are encouraged to move to Worcester alleviating some of the burden for everyone.