A PROPOSED LAW TO ELIMINATE THE STATE INCOME TAX" Question #1 This proposed law would eliminate the state personal income tax for all tax years beginning on or after January 1, 2009. The personal income tax applies to income received or gain realized by individuals and married couples, by estates of deceased persons, by certain trustees and other fiduciaries, by persons who are partners in and receive income from partnerships, by corporate trusts, and by persons who receive income as shareholders of âS corporationsâ as defined under federal tax law. The proposed law would not affect the tax due on income or gain realized in a tax year beginning before January 1, 2009. The proposed law states that if any of its parts were declared invalid, the other parts would stay in effect. What about the numbers? Income tax receipts in Massachusetts currently account for 39 percent of overall state revenue, approximately $11 billion a year. Removed from the proposed 2008 state budget of $29 billion, legislators would be left with about $18 billion to spend.