Bill > H3110

This bill addresses offshore tax avoidance by making several technical changes to how certain types of international corporate income are treated for tax purposes in Massachusetts. Specifically, the bill modifies how income reported under sections 951 and 951A of the federal tax code (which relate to income from controlled foreign corporations and global intangible low-taxed income) is classified for state tax calculations. The bill introduces a nuanced approach where income under section 951 will continue to be treated as dividends, while income under section 951A will not be treated as dividends. Additionally, the bill provides for a 50% deduction for amounts included in federal gross income under section 951A, effectively providing a partial tax benefit for this type of international corporate income. The changes will apply to all tax years beginning on or after January 1, 2025, giving businesses time to adjust to the new tax treatment. These modifications aim to align Massachusetts' tax treatment of offshore income with federal tax regulations while providing some tax relief for corporations with international subsidiaries.

Budget and Finance

https://malegislature.gov/Bills/194/H3110