Nicole St. Peter
The Massachusetts Department of Revenue announced today it has resolved the last case in the Department's inventory under the old bank excise tax statute. The Department has reached a settlement regarding state bank excise tax claims involving the First National Bank of Boston for the years 1992 to 1994.
"We are pleased to have resolved the last case in the Department's inventory under the old bank excise statute. This settlement allows us to remove this case from the listing of contingent liabilities that the Commonwealth is required to disclose for bond purposes," said Frederick Laskey, Commissioner of the Department of Revenue.
Prior to revision of the tax law in 1995, a bank was required to pay an excise tax in Massachusetts based on all of its income worldwide. The 1995 law change allows a bank to apportion its income and pay a tax calculated upon the percentage of its property, payroll and receipts within Massachusetts. The Bank of Boston paid approximately $79 million in bank excise tax for the years 1992 and 1994. Under the settlement, $27.5 million for the years 1992 and 1994 will be refunded to the bank. The 1993 tax year was previously abated on a basis unrelated to the claims made by the bank. Had a full abatement of $79 million in bank excise tax with interest been required, the Commonwealth would have been required to refund approximately $125 million.
"We are pleased to have settled this matter pertaining to Bank of Boston on mutually agreeable terms, beneficial to both the Commonwealth and the Bank" said Richard C. Angelone, Director of Corporate Taxes of Fleet National Bank, which is the banking subsidiary to FleetBoston Financial.