On April 23, 2019, Reed Smith’s Massachusetts tax team held a webinar discussing issues and opportunities that arise under the net worth measure of the Massachusetts corporate excise tax. The program, titled “Massachusetts’ Net Worth Based Tax – Not As Simple As It Appears”, ran about 35 minutes and included discussion on how the net … Continue Reading
The Massachusetts Appellate Tax Board (“ATB”) has—on its own motion—reconsidered and reversed a 2017 decision that denied refund claims for sales tax paid on software downloaded onto servers located in Massachusetts, but used outside of Massachusetts. Taxpayers that paid Massachusetts sales tax on software used outside the Commonwealth may have a refund opportunity and should … Continue Reading
Can a Department of Revenue auditor reduce a taxpayer’s deduction for a net operating loss (“NOL”) carryforward, even if the NOL was generated in a tax year that is closed under the statute of limitations? This question is the subject of an appeal currently pending at the ATB. The appeal involves a telecommunications company that … Continue Reading
A case recently resolved at the Appellate Tax Board serves as a reminder that Massachusetts’ auditors continue to aggressively challenge the following intercompany transactions: Interest deductions for interest paid to foreign affiliates that are not members of the unitary combined group—even if the foreign affiliate is domiciled in a country with a comprehensive tax treaty … Continue Reading
In D & H Distributing Company v. Commissioner, the Supreme Judicial Court (“SJC”) considered whether the taxpayer, a distributor located outside of Massachusetts, bore the burden of proving that a drop shipment to a Massachusetts customer was a “sale at retail” upon which the distributor had an obligation to collect Massachusetts sales or use tax. The transactions … Continue Reading
The Massachusetts Appellate Tax Board (“ATB”) has issued an order denying three sales tax refund claims involving multiple points of use (“MPU”) sourcing. In each case, vendors had filed refund claims arguing that their customers were eligible for refunds of sales tax charged on the full sales price of software delivered to Massachusetts to the … Continue Reading
With oral argument and briefing complete, the Massachusetts Department of Revenue’s authority to increase the net worth component of a taxpayer’s corporate excise using its “true debt” analysis is under review by the Appeals Court in National Grid Holdings, Inc. et. al. v. Commissioner. The appeal should be of particular interest to taxpayers because, in … Continue Reading
On October 13, the United States Supreme Court granted a request for review in the case of First Marblehead Corporation v. Massachusetts Commissioner of Revenue, and summarily vacated the decision issued January 28, 2015, by the Supreme Judicial Court of Massachusetts. The case has been remanded to the Supreme Judicial Court for further consideration in … Continue Reading
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
Today, the Appellate Tax Board (“ATB”) released its Findings of Fact and Report in the related cases of Massachusetts Mutual Life Insurance Company and MassMutual Holding LLC v. Commissioner and MML Investor Services, Inc. v. Commissioner, in which the ATB held that intercompany debt between MassMutual and its affiliates was true debt. As true debt, … Continue Reading
The Massachusetts Supreme Judicial Court has agreed to accept jurisdiction and hear the taxpayer’s appeal in Regency Transportation, Inc. v. Commissioner, a case in which the Appellate Tax Board, (“ATB”) upheld the Department of Revenue’s assessment of use tax on trucks which, although stored and serviced in Massachusetts, were purchased outside of Massachusetts and used for transportation … Continue Reading
In a ruling that will be of interest to taxpayers following Massachusetts appeals on the issue, Washington has issued recent guidance (see Washington DOR – Termination Fees) asserting that early termination fees for cancelling cellular phone contracts are subject to retail sales tax as taxable telecommunications services. This guidance takes the same position that the Massachusetts Department … Continue Reading
While Massachusetts’ expansion of its sales tax to include computer-related services was repealed within three months of its enactment, the Massachusetts Department of Revenue continues to take a close look at sales treated as non-taxable services by vendors, and characterize those sales as either sales of tangible personal property or telecommunications services, both of which … Continue Reading
Early this month, the Appellate Tax Board issued a decision involving the application of Massachusetts use tax to trucks that could have implications for all transportation companies doing business in the Commonwealth. In Regency Transportation, Inc. v. Commissioner, the Board held that Regency Transportation, an interstate freight transportation company, was subject to Massachusetts use tax … Continue Reading
This post is part of a series of posts discussing key issues in the Appellate Tax Board’s recent decision in Genentech, Inc. v. Commissioner. We previously reported on this decision in our prior post. In Genentech, Inc. v. Commissioner, the Appellate Tax Board held that the Massachusetts activities of a biotechnology company were not protected … Continue Reading
On November 17, 2014, the Appellate Tax Board released its Findings of Fact and Report in Genentech v. Commissioner which held that a pharmaceutical company qualified as a “manufacturer” under Massachusetts law, and was required to apportion its corporate excise tax base using the single sales factor formula for manufacturing corporations, instead of the three … Continue Reading
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
