Today in Globe Business
Health insurers sue to raise rates
A half-dozen health insurers yesterday filed a lawsuit against the state seeking to reverse last week’s decision by the insurance commissioner to block double-digit premium increases — a ruling they say could leave them with hundreds of millions in losses this year.
The proposed rate hikes would have taken effect April 1 for plans covering thousands of small businesses and individuals. Insurers wanted to raise base rates an average of 8 percent to 32 percent; tacked on to that are often additional costs calculated according to factors such as the size and age of the workforce.
Yesterday’s legal action sets the stage for a showdown between state regulators and the health insurance industry.
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The state’s highest court tomorrow will take up a long-running tax dispute that could determine how Massachusetts taxes start-up companies trying to design and launch new products here.
The case involves tax breaks the state gives companies under an 80-year-old law meant to encourage manufacturers to expand in Massachusetts. Onex Communications Corp. of Bedford was formed in 1999 to make a super-chip used to transmit large amounts of data. For its first three years, Onex said it was developing the design specifications for that super-chip and claimed it was exempt from sales taxes on $2.7 million in equipment purchased during the period, citing the manufacturing tax break.
But the state Department of Revenue disagreed, asserting the company’s activities during those years primarily consisted of conceptual work that did not meet the definition of manufacturing under the law. The state, which initiated the case under former Republican Governor Jane Swift, says it is owed about $294,000 in unpaid taxes, penalties, and interest. The Massachusetts tax department has lost its argument before a state board and an appeals court, but has appealed to the state Supreme Judicial Court.
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Part-time Florida couple must pay Bay State taxes
Warning to snowbirds: It takes more than a pair of winter homes in Florida to escape the long arm of Bay State tax collectors.
The Massachusetts Appellate Tax Board ruled late last week that the chairman of Timberland Co., Sidney W. Swartz, and his wife owe more than $890,000 in Massachusetts taxes and interest after selling millions of dollars in Timberland stock in 2004, even though they claimed to be Florida residents.
Sidney retired as chief executive from Timberland, the trendy outfitter based in Stratham, N.H., in 1998, but remains chairman of the company. Sidney and Judith Swartz, who spent most of their lives in Massachusetts, owned both a five-bedroom oceanside home in Marblehead and a condo in Brookline at the time of the stock sales.
The couple also owned both a six-bedroom oceanside house in Delray Beach, Fla., and a condo near a country club in Boca West, Fla.
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BOSTON CAPITAL: Success or no, CEOs score
This how my parochial little mind works: I thought Ray Elliott merely ran circles around other chief executives in Massachusetts when it came to compensation last year. But it turns out Elliott, the man named as CEO of Boston Scientific Corp. last summer, became one of the best-paid chief executives in America in 2009.
Separate national surveys published in the past week by The Wall Street Journal and The New York Times, although incomplete, come up with just one or two large-company CEOs with compensation packages that could outdo Elliott’s $33.5 million payday.
Oracle Corp. chief Larry Ellison certainly earned more, and the CEO at Occidental Petroleum Corp. may or may not have done better, depending on which consultant is counting the numbers. But that’s the entire list so far.
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Cold competition on the iced coffee front
Competition is brewing in the latest frontier of the java wars: iced coffee.
Dunkin’ Donuts rolled out its Iced Dunkin’ Dark Roast yesterday to undercut its biggest rivals. Meanwhile, java leader Starbucks is planning to upgrade its popular frappuccino iced coffee drink next month. And McDonald’s intends to launch new blended coffee iced drinks and smoothies this summer.
The new drinks show how competitive the coffee wars have gotten as chains that have increasingly tried to one-up one another attempt to take advantage of coffee drinkers’ growing affinity for having the beverage served over ice.
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