Adjustments to Apportionment Formula
TAX EXPENDITURE | FY2010 | FY2011 | FY2012 |
---|---|---|---|
Adjustments to Apportionment Formula | 304.7 | 320.7 | 340.0 |
item | description | amount |
---|---|---|
Adjustments to Apportionment Formula | 340.0 | |
2.401 |
Unequal Weighting of Sales, Payroll, and Property in the Apportionment Formula
Corporations with a presence in Massachusetts and other states allocate income to the Commonwealth using a three-factor apportionment formula. A corporation's sales, payroll, and property in Massachusetts are compared to those outside Massachusetts. Exporters benefit from an apportionment formula that weights sales more heavily than the other factors. Effective January 1, 1996, eligible defense corporations are allowed a formula that weights sales 100%. For other qualified manufacturers, a 100% sales weight was phased-in over five years, and was fully effective January 1, 2000. All corporations other than mutual fund corporations (see below) will continue to use a formula that weights sales 50%. Effective January 1, 1997 mutual fund corporations are allowed to attribute mutual fund sales to Massachusetts based on the domicile of shareholders in the mutual funds. Effective July 1, 1997, mutual fund corporations are allowed to apportion their income to Massachusetts based solely on the percentage of sales to Massachusetts' residents. Comment: In listing this item, it is assumed that a standard apportionment formula gives equal weight to sales, property and payroll. The estimate is of the impact of departing from this standard formula. Origin: M.G.L. c. 63, S. 38 (c), (k), (l), (m) Estimate: $340.0 |
340.0 |
Key:
ORIGIN | |
IRC | Federal Internal Revenue Code (26 U.S.C.) |
---|---|
M.G.L. | Massachusetts General Laws |
U.S.C | United States Code |
ESTIMATES | All estimates are in $ millions. |
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