Archives: Corporate Excise Tax

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Massachusetts Audits and Appeals Update—Transfer Pricing and Embedded Royalties

From time to time, we’ll be using this space to discuss recurring Massachusetts state tax issues were seeing at audit and on appeal.  In the first in this series, we’ll focus on transfer pricing adjustments. Over the past few years, the Department’s auditors have aggressively attacked intercompany payments between affiliated entities—especially for tax years prior … Continue Reading

Commonwealth Faces Tough Questions from Appeals Court Justices In Sham Transaction Case

As we previously reported, last year the Appellate Tax Board issued a decision expanding the application of the sham transaction doctrine to transactions intended to transfer Massachusetts payroll and property to a corporation that otherwise lacked nexus with Massachusetts.  The case, Allied Domecq Spirits and Wines USA, Inc. v. Commissioner, Mass. App. Ct. Dckt No. 2013-P-0984, … Continue Reading

Department Extends Comment Period for Proposed Market Sourcing Regulations

The Department of Revenue announced Wednesday that the period for commenting on the proposed market-based sourcing regulations has been extended from May 1 to May 19, 2014.  At the teleseminar held on April 10, Reed Smith discussed several provisions in the proposed regulations worthy of comments.  To view our slide deck from the teleseminar or … Continue Reading

Corporate members of LLC can qualify as mutual fund service corporations

On March 13, 2014, the Department issued Letter Ruling 14-2, which ruled that the members of an LLC—four S Corporations—qualified as mutual fund services corporations because the income passed through from the LLC to its members qualified as income from mutual fund services. The LLC was treated as a partnership for federal and Massachusetts tax … Continue Reading

Reed Smith Comments on the Draft Market-Based Souring Regulations

Tax Analysts published an article (subscription required) today which included some commentary from Reed Smith’s Mike Jacobs and Robert Weyman on the new Market-based sourcing regulations.  The article, written by Jennifer DePaul, includes the initial reaction of practitioners to the draft regulations which were released March 25.  Reed Smith will expand on and clarify its … Continue Reading

Massachusetts Releases Proposed Market Sourcing and Throwout Regulations, What Does it Mean for You?

On July 24, 2013, the Massachusetts Legislature replaced the cost of performance sourcing regime with a market-based sourcing rule for all tax years starting on or after January 1, 2014. The same law also added a throwout rule.  Today, the Department released their proposed regulations to implement the market sourcing and throwout rules. Reed Smith … Continue Reading