Facts: Taxpayer Cooper is a uniformed member in the military service of the United States who is domiciled in Massachusetts. During her most recent taxable year, she lived in a state other than Massachusetts because she was temporarily assigned to active duty at a military base in such state.

Issue: Is the compensation Taxpayer Cooper received for her military service while on active duty in a state other than Massachusetts subject to the Massachusetts income tax?

Discussion: The Massachusetts gross income of an individual domiciled in Massachusetts includes income derived from sources both inside and outside the Commonwealth. G.L. c. 62, § 2(a). Accordingly, the compensation paid by the United States to uniformed military personnel domiciled in Massachusetts, but assigned to active duty outside the Commonwealth, is subject to Massachusetts taxation. Such compensation is, however, not subject to taxation in the state of military assignment because such taxation is prohibited by federal law. 50 U.S.C. § 574.

Directive: The compensation received by Taxpayer Cooper for her military service while on active duty in a state other than Massachusetts is subject to Massachusetts income tax, and must be reported on a resident return.

Reference: G.L. c. 62, § 2(a); 50 U.S.C. § 574; DOR-D 86-11; DOR-D 86-12.

/s/Ira A. Jackson
Ira A. Jackson
Commissioner of Revenue

12 June 1986

DOR-D 86-10

This Directive represents the official position of the Department of Revenue on the application of the law to the facts as stated. The Department and its personnel will follow this Directive, and taxpayers may rely upon it, unless it is revoked or modified pursuant to 830 CMR § 62C.01(5)(e). In applying this Directive, however, the effect of subsequent legislation, regulations, court decisions, Directives, and TIRs must be considered, and Department personnel and taxpayers may rely upon this Directive only if the facts, circumstances and issues presented in other cases are substantially the same as those set forth in this Directive.