Tag Archives: True Debt

Disallowance of Deduction for Interest Paid to Hungarian Affiliate Serves as a Reminder of Department’s Continued Audit Scrutiny of Intercompany Debt

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

Massachusetts Net Worth “True Debt” Litigation Moves Forward—Oral Argument Held, Awaiting Decision

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

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

Report from the Boston Bar Association Annual Tax Conference

The Boston Bar Association held its annual tax conference this past Thursday, and as always the BBA pulled together a great lineup of practitioners, legislators, and Department of Revenue officials to discuss the latest in Massachusetts state tax.  The event was broken into four sections; one each on tax policy, litigation, and administrative updates, as … Continue Reading

Appellate Tax Board Case Update: MassMutual Proves Intercompany Debt is True Debt

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
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