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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

Supreme Judicial Court hears argument in First Marblehead Case

An active bench at the Supreme Judicial Court heard oral argument in First Marblehead Corp. & Gate Holdings, Inc. v. Commissioner, Docket No. 2013-P-0935 this morning; posing pointed questions to both parties. At issue is whether Gate Holdings (“Gate”) is entitled to look to the activities of third-party loan services for purposes of sourcing its … Continue Reading

Are early termination fees charges for “telecommunications services” in Massachusetts?

The ATB recently received a petition challenging the imposition of sales tax on the early termination fee charged by a mobile telecommunications  The Department asserted at audit that the early termination fees were charges for telecommunications services and, thus, subject to Massachusetts sales tax.  The taxpayer is now challenging that assessment. Read more about the … 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
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