Under the corporate excise statute, an investment tax credit equal to 1% (or 3% up until July 1, 1999) of the cost of certain tangible property, including buildings, is available to corporations "primarily engaged in agriculture or commercial fishing." G.L. c. 63, § 31A. In Commissioner of Revenue v. Cargill, Inc., 429 Mass. 79, 706 N.E.2d 625 (1999), decided March 1, 1999, the Supreme Judicial Court held that a foreign corporation principally engaged within Massachusetts in the distribution of petroleum products nonetheless qualified for the investment tax credit on the basis of its substantial agricultural activities conducted outside of Massachusetts. The Court held that the language of the statute was clear and did not require that the corporation's agricultural activity be conducted within the Commonwealth if, viewing its activities as a whole, the corporation was primarily engaged in agriculture.

Accordingly, under the Cargill decision, the determination of whether a corporation is "primarily engaged in agriculture or commercial fishing" for purposes of G.L. c. 63, § 31A, must include a review of both the corporation's in-state and out-of-state activities.

Frederick A. Laskey,
Commissioner of Revenue

April 16, 1999
TIR 99-8