Archives: Dept. of Revenue

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Mark Nunnelly Leaving Position as DOR Commissioner – DOR Now Seeking 3rd Commissioner in Less Than 2 years

Governor Charlie Baker’s office announced in a press release today that Mark Nunnelly has accepted a new role as Executive Director of MassIT, the state technology office, beginning April 4.  In that role, Mr. Nunnelly is expected to lead an effort to “revamp and improve” the way that people interact online with government on matters … Continue Reading

Massachusetts Department of Revenue Launches Pilot Program for Settling Uncertain Tax Issues—Lack of Anonymity in Settlement Process a Concern

Continuing its efforts to improve the process for resolving tax disputes in Massachusetts, the Massachusetts Department of Revenue has released final AP 637 Voluntary Disclosure Program for Settlement of Uncertain Tax Issues (Click Here) outlining a new pilot program for settling “uncertain tax issues” through its voluntary disclosure program.  (Click Here for a redline showing the modest … Continue Reading

Massachusetts Joint Committee Hears Testimony Yesterday on Bill to Ban Use of Contingent Fee Auditors

Yesterday, the Massachusetts Legislature’s Joint Committee on State Administration and Regulatory Oversight heard testimony on Senate Bill 1710, a bill that would prohibit the use of contingent fee auditors by state agencies, including the Massachusetts Department of Revenue (the “Department”). As the name suggests, such auditors get paid a fee which is contingent on the … Continue Reading

Massachusetts Denies ‘True Debt’ Treatment for Cash Management Obligations

The Massachusetts Appellate Tax Board (“ATB”) has once again issued a Findings of Fact and Report upholding a Department assessment on the basis that a taxpayer’s intercompany obligations under a cash management system were not bona fide debt.  The most recent decision, issued September 4, 2015, is Staples, Inc. and Staples Contract and Commercial, Inc. … Continue Reading

Silver Tsunami Quickly Approaching Department of Revenue Thanks to Early Retirement Incentive Program

On May 4, 2015, Governor Charlie Baker signed into law a bill creating an early retirement incentive program for Massachusetts state employees. Under the incentive plan, employees choosing to retire effective June 30, 2015, will be eligible to add up to five years to either their age or years of service, in order to increase … Continue Reading

The Commissioner of Revenue’s Use of the Sham Transaction Doctrine Examined in Tax Analysts Column

In the most recent edition of “The Taxpayers’ Advocate”, a quarterly column published by Tax Analysts focusing on taxpayers’ rights in state and local tax, Michael A. Jacobs, Robert E. Weyman, Brent Beissel, and Jack Trachtenberg of Reed Smith LLP discuss the Massachusetts Commissioner of Revenue’s use of the sham transaction doctrine.  The column, titled … Continue Reading

Governor Baker Names Mark Nunnelly New Commissioner of Revenue

Today, Mark Nunnelly, a former Managing Director of Bain Capital, was named the new Commissioner of the Department of Revenue. Mr. Nunnelly replaces outgoing Commissioner Amy Pitter effective March 30, 2015. Mr. Nunnelly has also been named special advisor to Governor Baker for technology and innovation competitiveness. In this capacity he will work with Governor … Continue Reading

Department of Revenue releases detailed guidance for corporate excise tax amnesty program

The Massachusetts Department of Revenue released TIR 15-2 specifying the administrative details of the amnesty program authorized by the legislature earlier this year. The amnesty period is open now through May 15, 2015, for eligible taxpayers who owe corporate excise taxes (business corporations, as well as financial institutions, and insurance companies); estate taxes; fiduciary income taxes; … Continue Reading

A Quick Overview of Substantive Changes in Final Massachusetts Market Sourcing Regulation 830 CMR 63.38.1—From 10/30/14 Draft to Final

As we reported on Friday, the Massachusetts Department of Revenue has promulgated its final regulations governing the apportionment of income (830 CMR 63.38.1).  The regulations implement legislation that mandates market-based sourcing and a throwout rule for sales other than sales of tangible personal property, effective for tax years beginning on or after January 1, 2014. … Continue Reading

Massachusetts Promulgates Final Market Sourcing Regulation

This afternoon, the Massachusetts Department of Revenue promulgated its Final Regulation 830 CMR 63.38.1: Apportionment of Income, to implement the market-based sourcing rules which took effect for tax years beginning after January 1, 2014.  The final regulation can be found here: Final Market Sourcing Regulations. The Final Regulation follows a Working Draft of the same regulation which was released by … Continue Reading

Associated Industries of Massachusetts Comments on Proposed Market Sourcing Regulations

On December 4, the Associated Industries of Massachusetts (AIM) submitted written comments to the Department of Revenue regarding the Department’s proposed market sourcing regulations.  The proposed regulations govern the sourcing of receipts from sales of services and intangibles.  In its comments, AIM rightly objected to provisions that prevent taxpayers from adjusting their sourcing methods through … Continue Reading

Massachusetts Market Sourcing Update: Report from Public Hearing on Market Sourcing and Special Industry Apportionment Regulations

Today, the Department of Revenue held a hearing for the public to present comment regarding the Department’s proposed market sourcing regulation.  In addition, the proposed special industry apportionment regulations for Airline Corporations, Motor Carriers, and Courier and Package Delivery Services; and the proposed corporate nexus regulation were also addressed at today’s hearing.  The proposed regulations were … Continue Reading

Public Hearing on Proposed Regulations Set for December 4

The Massachusetts Department of Revenue will hold its public hearing to discuss the proposed market sourcing regulation on December 4, 2014.  In addition, the proposed special industry apportionment regulations for Airline Corporations, Motor Carriers, and Courier and Package Delivery Services; and the proposed corporate nexus regulation are also scheduled to be heard as part of the … Continue Reading

Massachusetts Releases Second Draft of Market Sourcing Regulations

This afternoon, the Massachusetts Department of Revenue released its Proposed Regulation 830 CMR 63.38.1: Apportionment of Income, to implement the market-based sourcing rules which took effect for tax years beginning after January 1, 2014.  Here is the proposed market sourcing regulation. The Proposed Regulation follows a Working Draft of the same regulation which was released by the … Continue Reading

ATB rules that orthopedic braces sold by orthopedic surgeon are exempt from sales and use tax.

Earlier today, the Appellate Tax Board (“ATB”) released its Findings of Fact and Report in Excel Orthopedic Specialists, Inc. v. Commissioner, holding that orthopedic braces—rigid and semi-rigid knee, elbow, ankle, wrist, and back braces—were exempt from sales and use tax when sold by a medical practice of orthopedic surgeons.  The ATB concluded that the braces … Continue Reading

Tax Amnesty Program Becomes Law; Will Be Offered During Fall of 2014

As part of the Fiscal Year 2015 Budget, the Commonwealth has established a tax amnesty program.  The amnesty period will last from September 2 through October 31, 2014.  If a taxpayer pays delinquent taxes during the amnesty period, the Department of Revenue will waive any associated penalties.  The program will cover unpaid sales and use, … Continue Reading

Massachusetts House Budget Would Include Tax Amnesty Program For 2015 Fiscal Year

Monday, the Massachusetts House adopted several tax related amendments to their version of the fiscal year 2015 (July 1, 2014- June 30, 2015) budget.  If the House’s budget is adopted, one recently-adopted amendment, would create a two-month tax amnesty program for delinquent sales and use tax, pass-through entity withholding, meals tax, and other taxes.  The … 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

DOR Preparing for “Silver Tsunami”

Facing large-scale human capital losses in the next few years, the Department of Revenue has joined forces with Bunker Hill Community College (“BHCC”) to prepare for the retirement of baby boomers – the so-called “silver tsunami.” Over the next five years, the Department expects approximately 500 employees to retire.  According to Commissioner Amy Pitter, this … Continue Reading

Massachusetts Tax Regulation Changes on the Way—Department of Revenue lays out plans for amended and new regulations for 2014

The Massachusetts Department of Revenue has released its plans for drafting new and amended state tax regulations (as well as a few repeals) for 2014.  Notable planned changes to the Code of Massachusetts Regulations include: Amendments to the NOL deductions and carryforward regulation to reflect changes under combined reporting (830 CMR 63.30.2). Amendments to corporate … Continue Reading

Massachusetts Department of Revenue posts audit manual:

Taxpayers undergoing Massachusetts tax audits have a new public resource available—the Department of Revenue’s audit manual.  The manual lays out the procedures that auditors should follow when conducting an audit, as well as some high level interpretations of Massachusetts tax law to guide the auditors. You can find the published audit manual by clicking here. … Continue Reading
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