Massachusetts Widens Net for Capturing Corporate Income Tax

Massachusetts joined a small but growing group of states that are using a company’s economic activity in the state as a reason for having to pay corporate income tax.

The state Department of Revenue published a regulation Oct. 18 amending the conditions under which a general business corporation is subject to Massachusetts’s general corporate excise tax.

Citing the Supreme Court’s South Dakota v. Wayfair, Inc., decision, the rule adds “considerable in-state sales derived through either economic or virtual contacts” to the physical presence circumstances which make a general business corporation—whether in- or out-of-state—subject to the excise tax.

The ...