2.400
2.400 Adjustments to Apportionment Formula
Tax Expenditure Name
Tax Expenditure Number
FY2017
FY2018
FY2019
FY2020
FY2021
Adjustments to Apportionment Formula
2.400
411.4
419.6
428.1
436.8
445.6
Loading...
Tax Item
Description
Origin
FY2021
2.401
Unequal Weighting of Sales, Payroll, and Property in the Apportionment Formula
Unequal Weighting of Sales, Payroll, and Property in the Apportionment Formula
Corporations with a presence in Massachusetts and other states allocate incomes 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 to use a formula that weights sales 100%. For other qualified manufacturers, a 100% sales weight was phased-in over 5 years, and was fully effective January 1, 2000. Corporations other than mutual fund corporations will continue to use a formula that weights sales 50%. Financial institutions and public utility companies weigh all factors equally and do not result in a tax expenditure.
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: It is assumed that a standard apportionment formula gives equal weight to sales, property and payroll. The estimate measures the impact of departing from this standard formula.
Exporters benefit from an apportionment formula that weights sales more heavily than the other factors. Effective January 1, 1996, eligible defense corporations are allowed to use a formula that weights sales 100%. For other qualified manufacturers, a 100% sales weight was phased-in over 5 years, and was fully effective January 1, 2000. Corporations other than mutual fund corporations will continue to use a formula that weights sales 50%. Financial institutions and public utility companies weigh all factors equally and do not result in a tax expenditure.
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: It is assumed that a standard apportionment formula gives equal weight to sales, property and payroll. The estimate measures the impact of departing from this standard formula.
445.6
Loading...