October 24, 1979

You inquire as to whether corporations filing consolidated corporation excise tax returns in Massachusetts must separately allocate their net incomes before arriving at the combined net income measure of the excise.

Section 32B of Chapter 63 entitles corporations who have filed a consolidated income tax return with the federal government to have the net income tax measure of their excises assessed on their combined net incomes. Each corporation within the combination must, however, separately apportion its net income on Schedules E and F of Forms 355A or 355B, the Massachusetts Domestic and Foreign Corporate excise tax returns, and then report the combined incomes in the tax computation schedule of the parent or principal reporting corporation.

You also ask if the use of the property factor to apportion income is inconsistent with the requirement (in the instructions to Forms 355A and 355B) to report separately for each corporation the property measure of the excise.

Each corporation remains individually liable for the portion of the excise measured by tangible property or net worth (Chapter 63, Section 32(a)(1)). Instruction number six of Forms 355A and 355B reminds taxpayers that the tangible property or net worth measure of the excise must be reported separately by each corporation, regardless of whether net income are combined for purposes of the net income measure of the excise.

Very truly yours,

/s/L. Joyce Hampers

L. Joyce Hampers
Commissioner of Revenue

LJH/LSB/jmcd

LR 79-42