Similarly for individual income tax, for purposes of the corporate excise the starting point for the computation of Massachusetts taxable net income is federal gross income as defined under the IRC, as amended and in effect for the taxable year (with certain modifications not relevant here). Federal gross income includes income from the sale, lease or other transfer of all patents and income from property subject to such patents. Pursuant to M.G.L. c. 63, § 30.3 income from certain patents that are useful for energy conservation or alternative energy development may be deducted from Massachusetts gross income (and therefore is not subject to tax) for a period of five years. The five-year period begins on the date of issuance of the United States patent or the date of approval by the Commissioner of Energy Resources, whichever expires first.
The income may only be deducted in relation to patents that were issued to or applied for by a Massachusetts resident or a Massachusetts corporation. Also, the patents must be of economic value, practicable, and necessary for the Commonwealth. Finally, the patents must be approved by the Commissioner of Energy Resources.
The FY22 Budget repeals the exemption effective for taxable years beginning on or after January 1, 2022.
Origin: M.G.L. c. 63, § 30.3; c. 62, § 2(a)(2)(G)
Corporate Excise Tax
Exclusions from Gross Income
2.002
Exemption of Income from the Sale, Lease or Transfer of Certain Patents
Similarly for individual income tax, for purposes of the corporate excise the starting point for the computation of Massachusetts taxable net income is federal gross income as defined under the IRC, as amended and in effect for the taxable year (with certain modifications not relevant here). Federal gross income includes income from the sale, lease or other transfer of all patents and income from property subject to such patents. Pursuant to M.G.L. c. 63, § 30.3 income from certain patents that are useful for energy conservation or alternative energy development may be deducted from Massachusetts gross income (and therefore is not subject to tax) for a period of five years. The five-year period begins on the date of issuance of the United States patent or the date of approval by the Commissioner of Energy Resources, whichever expires first. <BR><BR>The income may only be deducted in relation to patents that were issued to or applied for by a Massachusetts resident or a Massachusetts corporation. Also, the patents must be of economic value, practicable, and necessary for the Commonwealth. Finally, the patents must be approved by the Commissioner of Energy Resources.<BR><BR>The FY22 Budget repeals the exemption effective for taxable years beginning on or after January 1, 2022.
M.G.L. <a href="https://malegislature.gov/Laws/GeneralLaws/PartI/TitleIX/Chapter63/Section30" target="_blank">c. 63, § 30.3</a>; <a href="https://malegislature.gov/Laws/GeneralLaws/PartI/TitleIX/Chapter62/Section2" target="_blank">c. 62, § 2(a)(2)(G)</a>
0.0
0.0
0.0
N.A.
N.A.
