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Intern proposes lowering Acton’s commercial tax rate to attract businesses; model shows trade-offs
Summary
Aditya Sharma presented a model suggesting a modest cut to Acton’s $17.15-per-$1,000 commercial tax rate could attract enough businesses from existing vacant commercial space to offset much of the near-term revenue loss.
Aditya Sharma, an intern and incoming freshman at Indiana University’s Kelley School of Business, presented a comparative analysis of Acton’s commercial tax rate and a model estimating how lower rates could affect business attraction and municipal revenue.
Sharma said Acton’s commercial tax rate for fiscal 2025 is $17.15 per $1,000 of assessed value and noted that about 70 percent of Massachusetts municipalities have lower commercial rates. He compared Acton to neighboring towns with lower rates and higher business density (examples shown: Concord, Westford, Wellesley).
Using fiscal 2024 business-tax revenues of approximately $6.75 million as a baseline, Sharma modeled a range of lower tax-rate scenarios and calculated the revenue gap created by each rate. He then estimated the number of new businesses required to offset the reduced rate, assuming the town could fill vacant commercial space (he estimated roughly 165,000 square feet vacant — roughly 83 average 2,000-square-foot businesses).
In one scenario, lowering the rate to $16 per $1,000 would create a revenue gap of about $400,000 but would require an estimated 45 additional businesses to break even; the town’s vacant space could accommodate that level of new firms, Sharma argued. He concluded that a modest rate cut could be revenue-neutral or beneficial over time if it attracted new businesses to existing vacant buildings.
Committee members asked whether taxes are a material component of total business costs and how a lower rate might compare to other costs (labor, rent, utilities). Sharma said taxes are only one input but can be a decisive factor in location decisions. He also noted that deeper cuts would raise short-term revenue losses; his model suggested phased reductions could be tested against vacancy and expected new-business capture rates.
Sharma recommended further analysis including industry mix, lease market conditions and a staged reduction plan tied to occupancy targets.
