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Massachusetts Top Court Nixes Tax on Florida Company’s Gains (1)

May 16, 2022, 3:39 PMUpdated: May 16, 2022, 9:15 PM

Massachusetts lacks the statutory authority to tax capital gains realized by a Florida company on its sale of a Massachusetts limited liability company, the state’s high court ruled unanimously.

The state has the constitutional authority to tax the Florida company VAS Holdings & Investments LLC for the financial benefit it gained from selling its 50% ownership interest in in-state company Cloud5 LLC, the Massachusetts Supreme Judicial Court ruled Monday. However, the state lacked the statutory authority under its taxing statutes to deviate from the unitary business principle by imposing the tax, Justice Dalila Argaez Wendlandt wrote for the court.

“The ...