Bill > S1543

This bill modernizes the corporate excise tax by updating the tax rates applied to a business corporation's net income, with the rate decreasing incrementally for tax years beginning from 2010 through 2012, ultimately settling at 8.0 percent for tax years beginning on or after January 1, 2012. The corporate excise tax, which is levied on businesses operating within the commonwealth, is calculated based on either a percentage of net income or a flat fee of $456, whichever is greater. The bill clarifies that "doing business" includes any act or privilege exercised in the commonwealth as an incident to the corporation's powers, as well as buying or selling services or property, and also covers the continuation of a corporation's charter or owning property in the state. Importantly, businesses selling tangible personal property that are constitutionally exempt from income tax under federal law, such as Public Law 86-272, will still be subject to the flat $456 excise tax, unless they store property in a licensed public warehouse. These changes are set to take effect on January 1, 2016.