MASSACHUSETTS DEPARTMENT OF REVENUE REGULATION FACT SHEET
TITLE: 830 CMR 63.38.1: Apportionment of Income
Regulation promulgated 8/11/95; New Regulation promulgated 2/5/99; Amended 3/31/00 by replacing section (13)(e)(3) and adding new section (15)(d); Amended 12/21/01 by replacing section (9)(b)7; New Regulation Promulgated 10/20/06; New Regulation Promulgated 1/2/15
SUMMARY OF REGULATION:
830 CMR 63.38.1: Apportionment of Income explains the apportionment rules that are to be used by corporations to determine their Massachusetts income tax liability. The apportionment rules are intended to determine what percentage of a corporation’s income is attributable to Massachusetts for purposes of taxation. The regulation explains the three “factors” that determine a corporation’s apportionment formula. These three factors pertain to a corporation’s in-state property, payroll, and sales. The new regulation promulgated on 1/2/15 includes the implementation of the market-based sourcing principles adopted pursuant to St. 2013, c. 46, § 37, pertaining to the sales factor apportionment of sales of other than tangible personal property. The regulation provides specific market-based sourcing rules for (1) the sale, rental, lease or license of real property, (2) the rental, lease or license of tangible personal property, (3) the sale of a service, (4) the license or lease of intangible property, and (5) the sale of intangible property.
SMALL BUSINESS IMPACT REVIEW REQUIRED BY St. 2010, c. 240, § 167:
The regulation has been reviewed for its economic impact on small businesses as required by St. 2010, c. 240, § 167. The following criteria have been considered: (1) the continuing need for this regulation; (2) the nature of complaints and comments about this regulation received by the Department from the public; (3) the complexity of the regulation; (4) the extent to which this regulation overlaps, duplicates, or conflicts with other federal, state and local government regulations; (5) the length of time since the regulation was enacted and/or amended; and (6) the degree to which technology, economic conditions or other factors have changed the subject areas affected by this regulation. This review recommended that this regulation be promulgated.
Massachusetts Department of Revenue
Rulings and Regulations Bureau
100 Cambridge Street, 7th floor
Boston, Massachusetts 02114
FAX: (617) 626-3290