By Mr. Koutoujian of Waltham, petition (accompanied by bill, House, No. 2992) of Peter J. Koutoujian and others relative to the definition of a research and development corporation under the tax laws of the Commonwealth.  Revenue.

The Commonwealth of Massachusetts

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PETITION OF:

Peter J. Koutoujian

James E. Timilty

Jennifer M. Callahan

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In the Year Two Thousand and Seven.

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An Act relative to the definition of a research and development corporation.

    Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

Section 1. The first sentence of paragraph 2 of Section 38C of Chapter 63 is hereby amended by striking the number “2/3” in both instances and inserting in place thereof in both instances the number “1/3”.

Section 2. The second sentence of paragraph 2 of Section 38C of Chapter 63 is herby amended by striking the number “2/3” and inserting in place thereof the number “1/3”. 

Section 3. Section 38 C of Chapter 63 is hereby amended by inserting at the end of said section the following:  Receipts attributable to the commonwealth shall only include receipts from ordinary business activity attributable to the commonwealth and shall not include receipts from investment income or from extraordinary transactions such as the sale of a business or settlements. Expenditures attributable to the commonwealth shall exclude expenditures related to corporate headquarters located in the commonwealth including expenses attributable to a company’s financial, personnel, legal and planning activities. Expenditures attributable to the commonwealth shall include expenditures related to research projects initiated, managed and directed from within the commonwealth. Expenditures allocable to research and development shall include both direct and indirect expenditures, including expenditures related to research and development activities performed by a third party

Section 4. The third sentence of Section 42B of Chapter 63 is hereby amended by striking the number “2/3” in both instances and inserting in place thereof in both instances, the number “1/3”.

Section 5. The fourth sentence of Section 42B of Chapter 63 is hereby amended by striking the number “2/3” and inserting in place thereof the number “1/3”.

Section 6. Section 42b of Chapter 63 is hereby amended by inserting at the end of said section the following: :  Receipts attributable to the commonwealth shall only include receipts from ordinary business activity attributable to the commonwealth and shall not include receipts from investment income or from extraordinary transactions such as the sale of a business or settlements. Expenditures attributable to the commonwealth shall exclude expenditures related to corporate headquarters located in the commonwealth including expenses attributable to a company’s financial, personnel, legal and planning activities. Expenditures attributable to the commonwealth shall include expenditures related to research projects initiated, managed and directed from within the commonwealth. Expenditures allocable to research and development shall include both direct and indirect expenditures, including expenditures related to research and development activities performed by a third party.