September 17, 1984

You inquire whether a corporation which has no business activity in Massachusetts, other than being authorized or qualified to do business here, must file a corporate excise return. You also inquire whether a foreign corporation which calls under the protection of Public Law 86-272 is required to file a corporate excise return.

Every foreign or domestic corporation exercising its charter, or qualified to do business or actually doing business in Massachusetts, or owning or using any part or all of its capital, plant, or any other property in Massachusetts, pay an excise on account of each taxable year. The term "doing business" includes each and every act, power, right, privilege or immunity exercised or enjoyed in Massachusetts. (G.L. c. 63, §63, § 39). Every, corporation subject to the corporate excise must pay a excise of 228 dollars. (G.L. c. 63, § 32(b)).

The corporate excise is due and payable on any one or all of the following alternative incidents:

(1) The qualification to carry on or do business in this state or the actual doing of business within the commonwealth in a corporate form. The term "doing business" as used herein shall mean and include each and every act, power, right, privilege, or immunity exercised or enjoyed in the commonwealth, as an incident to or by virtue of the powers and privileges acquired by the nature of such organizations, as well as, the buying, selling or procuring of services or property.

(2) The exercising of a corporation's charter or the continuance of its charter within the commonwealth.

(3) The owning or using any part or all of its capital, plant or other property in the commonwealth in a corporate capacity. (G.L. c. 63, § 32).

Public Law 86-272 prohibits a state from imposing a net income tax on income derived within that state from interstate commerce if the only business activity within the state is the solicitation of orders for sales of tangible personal property filled by shipment or delivery from outside the state after orders are sent outside the state for approval or rejection. (15 U.S.C. § 381(a)). The provisions of subsection (a) do not apply to the imposition of a state income tax on a corporation which is incorporated under the laws of that state. (15 U.S.C. § 381(b)).

A foreign or domestic corporation which is authorized or qualified to do business in Massachusetts, but which has no other activity here, must file a Massachusetts corporate excise return and pay the corporate excise.

A foreign corporation which is not authorized or qualified to do business in Massachusetts and which falls under the protection of Public Law 86-272 is not subject to the Massachusetts corporate excise and is not required to file a Massachusetts corporate excise return.

Very truly yours,

Commissioner of Revenue

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LR 84-78