Bill > S1887

This bill proposes changes to the calculation of taxes for certain financial institutions in Massachusetts. The key provisions are: 1. It amends the existing law to require financial institutions with income from business activity both within and outside Massachusetts to apportion their net income to the state based solely on their "receipts factor" (i.e., the ratio of their Massachusetts receipts to total receipts), rather than using a combined formula based on property, payroll, and receipts. 2. It modifies the rules for how certain types of income, such as interest, dividends, and gains from investment and trading activities, are attributed to Massachusetts for purposes of calculating the receipts factor. 3. It provides a process for financial institutions to request an alternative method for determining their Massachusetts-sourced net income if the standard apportionment formula does not reasonably approximate their in-state activity. 4. It also makes related changes to the general corporate tax apportionment rules, including adopting a single-factor sales formula and providing specific rules for the sourcing of different types of sales. The overall effect of the bill is to move the tax calculation for certain financial institutions towards a "single sales factor" approach, which aims to better align a company's Massachusetts tax liability with its in-state sales and receipts.

Budget and Finance

https://malegislature.gov/Bills/193/S1887