830 CMR, § 63.38.1
Agent, any person whose actions would be imputed to a taxpayer under the standards of 830 CMR 63.39.1 for purposes of determining whether the taxpayer is doing business in Massachusetts (or another state). In general, any taxpayer employee or other representative acting under the direction and control of the taxpayer is an agent, provided that bona fide independent contractors retained by a taxpayer are not agents of the taxpayer.
Allocable Item of Income, in the instance of a taxpayer with income from business activity taxable in more than one state, income from a transaction or activity that, consistent with the U.S. Constitution, can only be taxed in the state of the taxpayer's commercial domicile, because the item of income was not derived from a unitary business or from transactions that serve an operational function.
Base of Operations, the taxpayer's place of business from which an employee customarily begins work or to which the employee customarily returns at some other time to receive instructions, direction, and supervision from the taxpayer or communications from customers or other persons, to replenish stock or other materials, to repair equipment, or to perform any other function necessary to the exercise of the employee's trade or profession.
Business Activity, all of a taxpayer's transactions and activities, regardless of classification or labels, occurring in the course of a taxpayer's trade or business, including, but not limited to "incidents" as described in M.G.L. c. 63, § 39(1) through (3). Business activities of an agent conducted on behalf of a principal are deemed to be the business activities of the principal.
Capital Asset, an asset as defined in 26 U.S. Code § 1221, as modified by M.G.L. c. 62, § 1(m) and 830 CMR 63.38.1(2). For purposes of 830 CMR 63.38.1, Capital Asset includes property used in a trade or business within the meaning of U.S. Code § 1231(b) without regard to the holding period requirement in U.S. Code § 1231(b), and property held in connection with a trade or business entered into for profit within the meaning of U.S. Code § 1231(a)(3)(A)(ii)(II) without regard to the holding period requirement in U.S. Code § 1231(a)(3)(A)(ii)(II).
Code, the Federal Internal Revenue Code in effect for the taxable year.
Commissioner, the Commissioner of Revenue or the Commissioner's duly authorized representative.
Corporate Partner, any corporation that is a partner in a partnership.
Corporation, a business corporation as defined in M.G.L. c. 63, § 30.1.
Documentary Evidence, journals, books of account, invoices, expense reports, or other records that are maintained by the taxpayer in the regular course of its business. Generally, an affidavit or other document prepared in anticipation of, or in connection with, a tax audit, examination, or litigation is not documentary evidence.
Domicile (or commercial domicile), the principal place from which the business activities of a taxpayer are directed or managed, or, in the case of a shareholder of a RIC, the domicile as described in 830 CMR 63.38.7(4)(c). If it is not possible to determine the principal place from which the business activities of a taxpayer are directed or managed, the state of the taxpayer's incorporation shall be considered to be its state of domicile.
Employee, in general, any officer of a corporation, or any person who, under the usual common-law rules applicable in determining the employer-employee relationship, has the status of an employee. Generally, a person will be presumed to be an employee if such person is included by the taxpayer as an employee for purposes of the payroll taxes imposed by the Federal Insurance Contributions Act. However, for purposes of 830 CMR 63.38.1, a leased employee is an employee of the client (lessee) organization, and not an employee of the employee leasing company.
Employee Leasing Company, a business that contracts with a client company to supply workers to perform services for the client company; provided that, Employee Leasing Company does not include private employment agencies that provide workers to employers on a temporary help basis or entities such as driver-leasing companies which lease employees to another business to perform a specific service. See430 CMR 5.07 through 5.13.
Income, taxable net income as defined in M.G.L. c. 63, § 38(a). Income encompasses both positive income and losses.
Independent Contractor, any person who performs services for a taxpayer but who is not an employee of the taxpayer, and who is not otherwise subject to the supervision or control of the taxpayer in the performance of the services. In general, a person is treated as an independent contractor with respect to a taxpayer if that person's actions would not be imputed to the taxpayer under the standards of 830 CMR 63.39.1 for purposes of determining whether the taxpayer is doing business in Massachusetts (or another state).
Leased Employee, a person who performs services for a client company pursuant to a contract between the client company and an employee leasing company.
Manufacture, Manufacturing or Manufacturing Activity, the process of transforming raw or finished physical materials by hand or machinery, and through human skill and knowledge, into a new product possessing a new name, nature and adapted to a new use. In determining whether a process constitutes manufacture, manufacturing or manufacturing activity, the Commissioner will examine the facts and circumstances of each case in the manner set forth in the Manufacturing Corporation Regulation, 830 CMR 58.2.1(6)(b) and (c).
Mobile Property, motor vehicles, construction equipment, or other tangible personal property that an owner or lessee regularly moves from place to place in the course of its business. Property normally used in a fixed location is not mobile property merely because it happens to be moved into or out of Massachusetts or another state during the taxable year.
Mutual Fund Sales, mutual fund sales within the meaning of M.G.L. c. 63, § 38 and § 38(m)(1).
Mutual Fund Service Corporation, a mutual fund service corporation within the meaning of M.G.L. c. 63, § 38(m)(1).
Partnership and Partner, as a general rule, Partnership and Partner have the same meaning as in 26 U.S. Code § 7701, provided that Partnership and Partner shall also apply to other entities and their members treated as partnerships and partners for purposes of M.G.L. c. 62, § 17. Partnership does not include any trust or estate subject to taxation under M.G.L. c. 62 or any entity taxed as a corporation under M.G.L. c. 63.
Person, a natural or legal person, including, but not limited to, an individual, corporation, corporate trust, limited liability company, partnership, or S corporation.
Presumption, a conclusion of law or fact that is assumed to apply to a taxpayer unless the Commissioner or the taxpayer affirmatively rebuts the presumption by presenting contrary evidence of the actual facts and circumstances applicable to the taxpayer.
Receipts, consideration or value of any kind received from a taxpayer's business activity, including but not limited to cash, cash equivalents, payments in kind, and boot, that the taxpayer obtains from selling or providing property or services to another party. In the case of a sale, exchange or other disposition of a capital asset, including a transaction with respect to a capital asset that is deemed to be a sale or exchange under 26 U.S. Code, Receipts as used in 830 CMR 63.38.1 refers to the amount of the gain from the transaction. Receipts are subject to the Commissioner's adjustments under M.G.L. c. 63, § 39A.
Regulated Investment Company (RIC), a regulated investment company within the meaning of M.G.L. c. 63, § 38(m)(1).
Section 38 Manufacturer, a corporation that is engaged in manufacturing during the taxable year, and whose manufacturing activities during the taxable year are substantial within the meaning of 830 CMR 63.38.1(10)(b)2. and 3., regardless of whether the corporation is a manufacturing corporation under M.G.L. c. 63, § 42B, and regardless of whether the corporation is classified as a manufacturing corporation under M.G.L c. 58, § 2 and 830 CMR 58.2.1: Manufacturing Corporations. As used in 830 CMR 63.38.1, Section 38 Manufacturer refers to a corporation that is a manufacturing corporation within the meaning of M.G.L. c. 63, § 38(l)1.
Security, any interest or instrument commonly treated as a "security," as well as other instruments which are customarily sold in a public or secondary market or on a recognized exchange, including, but not limited to, transferable shares of beneficial interest in any corporation or other entity, bonds, debentures, notes, and other evidences of indebtedness, accounts receivable and notes receivable, cash and cash equivalents including foreign currencies, and futures contracts. A partnership interest will be treated as a security for purposes of 830 CMR 63.38.1 only in the case of a limited partnership whose activity is not attributed to its corporate limited partners under the provisions of 830 CMR 63.39.1(8) (Corporate Nexus). Security shall not be applied to the determination of security corporation classification under M.G.L. c. 63, § 38B.
State, any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, and any foreign country or a political subdivision of any of the foregoing. M.G.L. c. 63, § 30.13.
State of the Purchaser, the state to which tangible personal property sold by a taxpayer is ultimately shipped or delivered. In the case of a third party recipient who receives the tangible personal property by direct shipment from the taxpayer at the direction of the purchaser, the "state of the purchaser" is the state of the third party recipient.
Tax or Taxes, with regard to Massachusetts, any tax or excise, including the corporate excise imposed under M.G.L. c. 63, § 39 or the personal income tax imposed under M.G.L. c. 62, § 4 as it applies under M.G.L. c. 62, § 5A for nonresidents, M.G.L. c. 62, § 17 for partners of partnerships, and M.G.L. c. 62, § 17A for shareholders of S corporations.
Taxable Net Income, the part of the net income of a taxpayer derived from the taxpayer's business activities carried on in Massachusetts and which is adjusted as required by the applicable provisions of M.G.L. c. 63, § 38(a) or M.G.L. c. 62, §§ 5A, 17, or 17A, or by regulation, in order to determine the base amount of income to be multiplied by the apportionment percentage.
Taxpayer, any person as defined in 830 CMR 63.38.1(2) who is entitled or required to allocate or apportion income under M.G.L. c. 63, § 38 and 830 CMR 63.38.1. In the case of a combined group within the meaning of M.G.L. c. 63 § 32B and 830 CMR 63.32B.2, any member of the group who is entitled or required to allocate or apportion income under M.G.L. c. 63, § 38 and 830 CMR 63.38.1 is a taxpayer.
Three Factor Apportionment Percentage , a fraction, the numerator of which consists of the property factor, payroll factor, and sales factor, and the denominator of which is the total number of factors utilized in the numerator. In the case of a taxpayer subject to tax under M.G.L. c. 63, § 38(c), or M.G.L. c. 62, §§ 5A, 17 or 17A, the numerator of the fraction is the property factor plus the payroll factor plus twice the sales factor, and the denominator of the fraction is four. The factors are computed in accordance with the provisions of 830 CMR 63.38.1.
Unrelated Business Activities, (or Unrelated Activities), two or more of a taxpayer's business activities that are not related business activities as defined in 830 CMR 63.38.1(4).
Example 1. Famous Corporation is a corporation doing business in Massachusetts but domiciled in another state. Famous acquires a minority interest in the shares of Unknown Corporation as a long-term investment. The operations of Famous and Unknown are not related business activities. Any gain or loss on the sale of the Unknown stock is excluded from Famous' taxable net income and is not apportioned to Massachusetts. Famous must disclose the nature and amount of the excluded gain or loss on its Massachusetts return.
Example 2. Local Corporation is a corporation doing business and domiciled in Massachusetts. Local acquires a minority interest in the shares of Distant Corporation as a long-term investment. The operations of Local and Distant are not related business activities. Any gain or loss on the sale of Distant stock is included in Local's taxable net income and is allocated to Massachusetts.
Either the Commissioner or a taxpayer may rebut the presumption of unrelated business activity by demonstrating that the corporate limited partner and the partnership are engaged in a unitary business. If a corporate limited partner has engaged in a unitary business with the partnership in one or more taxable years, the corporate limited partner may not separately account in any such taxable year for the income it derives from the partnership. Instead, the corporate limited partner shall apportion to Massachusetts all income derived from business activity carried on within the commonwealth, including income derived from its partnership interest, in accordance with the rules of M.G.L. c. 63, § 2A, 38 or 42 using the corporate limited partner's own property, payroll, and sales plus its pro rata portion of the partnership's property, payroll, and sales to determine an apportionment percentage.
Example 1. Corporation A, which is domiciled outside of Massachusetts, owns a minority limited partnership interest in Partnership A. Partnership A conducts business in Massachusetts. Apart from this partnership holding, Corporation A does not conduct business in Massachusetts. Neither Corporation A nor the Commissioner rebuts the presumption that the business activities of Corporation A and Partnership A are unrelated. Corporation A must separately apportion to Massachusetts income from the holding or disposition of its interest in Partnership A, using the apportionment factors derived from the partnership's activity. Income from Corporation A's other activities is not subject to Massachusetts tax jurisdiction and is excluded from the Corporation's taxable net income.
Example 2. Corporation B, which is domiciled outside of Massachusetts, conducts business in Massachusetts and, in addition, owns a minority limited partnership interest in Partnership B. Partnership B does not conduct business in Massachusetts. Neither Corporation B nor the Commissioner rebuts the presumption that the business activities of Corporation B and Partnership B are unrelated. Income from Corporation B's holding or disposition of its interest in Partnership B is not subject to Massachusetts tax jurisdiction and is excluded from the Corporation's taxable net income. Corporation B must apportion the balance of its income to Massachusetts using the apportionment factors derived from its other activities.
Example 3. Corporation C is domiciled in Massachusetts and holds a minority limited partnership interest in Partnership C. Partnership C may or may not be engaged in business in Massachusetts. Neither Corporation C nor the Commissioner rebuts the presumption that the activities of Corporation C and Partnership C are unrelated. Corporation C must separately apportion to Massachusetts income derived from its interest in Partnership C, using the apportionment factors derived from the partnership's activity. Corporation C must apportion the balance of its income to Massachusetts using the apportionment factors derived from its other activities. The taxable net income of Corporation C is the sum of these separately apportioned amounts.
For purposes of determining a taxpayer's apportionment percentage under 830 CMR 63.38.1(9)(c)2., pertaining to throwback sales, a taxpayer is taxable in another state if it meets either test set forth in 830 CMR 63.38.1(5)(a) or (b) for all or part of the taxable year.
The provisions in 830 CMR 63.38.1(5) also applies to corporate partners as set forth in 830 CMR 63.38.1(12).
In addition to documentary evidence, the Commissioner will generally recognize that another state has jurisdiction to subject a particular taxpayer to a net income tax if the state has issued a written opinion to the taxpayer to that effect, provided that:
The following examples illustrate the application of 830 CMR 63.38.1(5)(a) and (b).
Example 1. In Year 1, a corporation that is incorporated in Massachusetts ("Corporation") and has business activities in Massachusetts is also engaged in the solicitation of sales of tangible personal property in Nevada, which does not impose a corporate income tax. In addition, if Nevada imposed a corporate income tax, the imposition of that tax would be proscribed by the provisions of the Federal law, Public Law 86-272. Although Corporation is engaged in business activity in both Massachusetts and one other state, it does not have income from business activity in a state other than Massachusetts that is taxable in such state. Therefore, all of Corporation's income from its business activities is allocated to Massachusetts. (Note that if Corporation were entitled to apportion its income by reason of its activities in an additional state, it would not be taxable in Nevada for purposes of determining its throwback sales under 830 CMR 63.38.1(9)(c)2. See830 CMR 63.38.1(5)(a) and (b).)
Example 2. Same facts as in Example 1, except that in Year 2, Corporation undergoes an F reorganization under the Code and, as a result of this reorganization, is re-incorporated in Delaware. Merely as a result of this re-incorporation, Corporation is required to file a franchise tax return for the privilege of doing business in Delaware. Although Corporation is required to make a franchise tax filing in Delaware, Corporation is not engaged in business activity in that state. It continues to be the case that Corporation does not have income from business activity in a state other than Massachusetts that is taxable in such state. Therefore, all of Corporation's income from its business activities is allocated to Massachusetts. (Note that if Corporation were entitled to apportion its income by reason of its activities in an additional state, it would not be taxable in Nevada but would be taxable in Delaware for purposes of determining its throwback sales under 830 CMR 63.38.1(9)(c)2. See830 CMR 63.38.1(5)(a) and (b).)
Example 3. Same facts as in Example 2, except that in Year 3, apart from its Massachusetts business activities, Corporation is also engaged in the solicitation of sales of tangible personal property in both Nevada and Pennsylvania. Although Pennsylvania imposes an income tax on corporations, Corporation is protected from the imposition of this tax by the application of the Federal law, Public Law 86-272. Pennsylvania also imposes a capital stock tax, which that state does impose upon Corporation. Although Corporation is subject to the Pennsylvania capital stock tax, this tax is not a tax on the Corporation's income from business activity in Pennsylvania. It continues to be the case that Corporation does not have income from business activity in a state other than Massachusetts that is taxable in such state. Therefore, all of Corporation's income from its business activities is allocated to Massachusetts. (Note that if Corporation were entitled to apportion its income by reason of its activities in an additional state, it would not be taxable in Nevada but would be taxable in Delaware and Pennsylvania for purposes of determining its throwback sales under 830 CMR 63.38.1(9)(c)2. See 830 CMR 63.38.1(5)(a) and (b).)
Example 4. Same facts as in Example 3, except that in Year 4, apart from its Massachusetts business activities and its sales solicitation activities in Nevada and Pennsylvania, Corporation also opens a sales office in Nevada. Nevada does not impose a corporate income tax. However, if Nevada imposed a corporate income tax, Corporation would no longer be protected from the imposition of this tax by the application of the Federal law, Public Law 86-272. Therefore, Corporation has income from business activity that is taxable in one state other than Massachusetts, and is required to apportion its income. For purposes of determining Corporation's throwback sales under 830 CMR 63.38.1(9)(c)2., Corporation is taxable in Nevada and also Pennsylvania and Delaware. See830 CMR 63.38.1(5)(a) and (b).
The Commissioner will presume that the methods stated in 830 CMR 63.38.1(7)(d)1. through 4. reasonably approximate the use of mobile property in Massachusetts.
The following examples illustrate the application of 830 CMR 63.38.1(7)(f)1.:
Example 1. Pursuant to the terms of a lease of real property, a taxpayer pays the lessor $12,000 a year rent, which includes a $1,200 fee for janitorial services. Additionally, the taxpayer pays taxes in the amount of $2,000 and interest in the amount of $1,000. The annual rent is $13,800.
Example 2. A taxpayer stores part of its inventory in a public warehouse. Under the terms of the contract, the total charge for the year is $1,000, of which $700 was for the exclusive use of a designated storage space and $300 for inventory insurance, handling and shipping charges, and C.O.D. collections. The annual rent is $700.
The following example illustrates the application of 830 CMR 63.38.1(7)(f)3.:
A corporation rents a ten-story building at an annual rent of $1,000,000. It occupies two stories and sublets eight stories for $1,000,000 a year. The net annual rent of the corporation must not be less than two-tenths of the corporation's annual rent for the entire year, or $200,000.
Inclusion of items in the payroll factor depends upon the particular facts and circumstances. In determining whether compensation is includible in the payroll factor, the following guidelines will be employed:
The following example illustrates the application of 830 CMR 63.38.1(9)(c)1.:
Example. Office Objects, Inc. ("Objects") manufactures office furniture in Massachusetts. Objects will either ship furniture from its Massachusetts manufacturing facility to its customers by common carrier, or it will allow customers to pick up their purchase at its Massachusetts facility. Empty Environment, Inc., ("Empty"), a Rhode Island corporation, purchases some office furniture from Objects. If Objects hires a common carrier to ship the furniture to Rhode Island, the sale is not a Massachusetts sale under the destination rule of 830 CMR 63.38.1(9)(c)1. because Objects did not transfer possession and control of the furniture to Empty in Massachusetts. If Empty uses its own truck and driver or hires its own carrier to pick up the furniture from Object's Massachusetts facility and transport it to Rhode Island, the sale will not be a Massachusetts sale under the destination rule if the taxpayer substantiates that no use is made of the property in Massachusetts other than the immediate transshipment.
Reorders of property originating from the efforts of a person who negotiated and effected the original order are treated the same as the original order unless this treatment is not reasonable in light of material changes in the taxpayer's business operations after the time the original order was placed.
A taxpayer's catalog sales, made when a customer, who has received mail-order solicitations from the taxpayer, telephones or sends a written order to a Massachusetts location of the taxpayer, are not sales made by an agent from premises outside Massachusetts.
Business Premises. For purposes of the sales factor, the taxpayer's owned or rented premises for the transaction of business ("business premises") is the taxpayer's owned or rented sales office that the selling agent customarily uses to receive instructions, directions, or supervision from the taxpayer, or communications from customers; to replenish stock or other materials; to repair equipment; or to perform any other function necessary to the selling of the taxpayer's tangible personal property. Facilities used exclusively as warehouses or manufacturing facilities are not sales offices. The presence of company employees receiving orders and shipping tangible personal property will not, by itself, change a facility from a warehouse to a sales office.
Chiefly Situated at. In the case of an agent who spends 50% or more of his or her time at a taxpayer's owned or rented business premises, the agent is chiefly situated at that business location.
Chiefly Sent out from. In the case of an agent who spends more than 50% of his or her working hours away from a fixed business premises, the agent is chiefly sent out from that business premises where the agent customarily returns for various paperwork, correspondence and administrative matters, such as participation in office meetings and conferences, meetings with supervisors or managers, and preparation of sales materials, contracts and the like.
Chiefly Connected With. In the case of an agent who does not fall within the rules described above in - Chiefly Situated at or - Chiefly Sent out From, the agent is chiefly connected with the business premises that exercises supervision and control over the agent's activities.
The following example illustrates the application of 830 CMR 63.38.1(9)(c)2.c.iii.
Taxpayer A has its executive office, sales office, and factory in New York. Taxpayer A also rents a branch sales office in Massachusetts and a warehouse in Rhode Island. Taxpayer A has four sales representatives in the New England region.
Saleswoman Barbara Resides in Massachusetts. She works daily at the branch sales office in Massachusetts where she meets with customers, receives telephone orders, approves and transmits approved orders to the warehouse personnel in Rhode Island for shipment. Barbara is "situated at" the Massachusetts branch sales office, and all sales made by Barbara are attributed to Massachusetts.
Salesman Bob operates out of his New Hampshire residence and solicits orders throughout New Hampshire and Maine. Bob regularly visits, reports to, and sends orders for approval to Saleswoman Barbara at the branch office in Massachusetts. Based on the facts, Bob is "sent out from" the taxpayer's rented branch sales office in Massachusetts. Assuming Taxpayer A is not taxable in New Hampshire and Maine, all sales of tangible personal property made by Bob to purchasers in New Hampshire and Maine are attributed to Massachusetts.
Salesman John operates out of his Vermont residence and solicits orders in Vermont. John was hired by, makes weekly reports to, and receives instructions from, the Vice President of Sales who operates out of the New York office. Although John routes his orders through the Massachusetts branch office where they are approved, he has no other contacts with that office. Based on the facts, John is "connected with" the taxpayer's owned New York office. Whether or not Taxpayer A is taxable in Vermont, none of the John's sales of tangible personal property to purchasers in Vermont are attributed to Massachusetts.
Salesman Tom resides in Rhode Island and solicits orders in Connecticut. Although Tom regularly visits the warehouse in Rhode Island, he reports to, and sends orders for approval to Saleswoman Barbara at the branch office in Massachusetts. Based on the facts, Tom is "connected with" the taxpayer's rented branch sales office in Massachusetts. Assuming that Taxpayer A is not taxable in Connecticut, all sales of tangible personal property made by Tom to purchasers in Connecticut are attributed to Massachusetts.
Billing Address means the location indicated in the books and records of the taxpayer as the primary mailing address relating to a customer's account as of the time of the transaction as kept in good faith in the normal course of business and not for tax avoidance purposes.
Business Customer means a customer that is a business operating in any form, including an individual that operates a business through the form of a sole proprietorship. Sales to a non-profit organization, to a trust, to the U.S. Government, to any foreign, state or local government, or to any agency or instrumentality of such government shall be treated as sales to a business customer and shall be assigned consistent with the rules that apply to such sales.
Individual Customer means any customer that is not a business customer.
Intangible Property, generally includes, without limitation, copyrights; patents; trademarks; trade names; brand names; franchises; licenses; trade secrets; trade dress; information; know-how; methods; programs; procedures; systems; formulae; processes; technical data; designs; licenses; literary, musical, or artistic compositions; information; ideas; contract rights including broadcast rights; agreements not to compete; goodwill and going concern value; securities (see830 CMR 63.38.1(2) (definition of "security")); and, except as otherwise provided in 830 CMR 63.38.1, computer software. In the case of a sale of intangible property, such sale may or may not be includable in the numerator and denominator of the taxpayer's sales factor, depending upon the application of 830 CMR 63.38.1(9)(d)6.
Place of Order, means the physical location from which a customer places an order for a sale other than a sale of tangible personal property from a taxpayer, resulting in a contract with the taxpayer.
State Where a Contract of Sale is Principally Managed by the Customer, means the primary location at which an employee or other representative of a customer serves as the primary contact person for the taxpayer with respect to the implementation and day-to-day execution of a contract entered into by the taxpayer with the customer.
Various professional services, including legal, accounting, financial and consulting services, and other such services as described in 830 CMR 63.38.1(9)(d)4.d., although they may involve some amount of in-person contact, are not treated as in-person services within the meaning of 830 CMR 63.38.1(9)(d)4.b.
In any instance in which the state or states where a service is actually received cannot be determined, but the taxpayer has sufficient information regarding the place of receipt from which it can reasonably approximate the state or states where the service is received, the taxpayer shall reasonably approximate such state or states. In any instance where the state to which the sale is to be assigned can be determined or reasonably approximated, but the taxpayer is not taxable in such state, the sale that would otherwise be assigned to such state shall be excluded from the numerator and denominator of the taxpayer's sales factor. See 830 CMR 63.38.1(9)(d)1.f.ii.
Example 1. Salon Corp. has retail locations in Massachusetts and in other states where it provides hair cutting services to individual and business customers, the latter of whom are paid for through the means of a company account. The sales of services provided at Salon Corp.'s Massachusetts locations are in Massachusetts. The sales of services provided at Salon Corp.'s locations outside Massachusetts, even when provided to Massachusetts residents, are not Massachusetts sales.
Example 2. Landscape Corp. provides landscaping and gardening services in Massachusetts and in neighboring states. Landscape Corp. provides landscaping services at the Massachusetts vacation home of an individual who is a resident of another state and who is located outside Massachusetts at the time the services are performed. The sale of services provided at the Massachusetts location is in Massachusetts.
Example 3. Same facts as in Example 2, except that Landscape Corp. provides the landscaping services to Retail Corp., a corporation with retail locations in several states, and the services are with respect to such locations of Retail Corp. that are in Massachusetts and in other states. The sale of services provided to Retail Corp. is in Massachusetts to the extent the services are provided in Massachusetts.
Example 4. Camera Corp. provides camera repair services at a Massachusetts retail location to walk-in individual and business customers. In some cases, Camera Corp. actually repairs a camera that is brought to its Massachusetts location at a facility that is in another state. In such cases, the repaired camera is then returned to the customer at Camera Corp.'s Massachusetts location. The sale of such services is in Massachusetts.
Example 5. Same facts as in Example 4, except that a customer located in Massachusetts mails the camera directly to the out-of-state facility owned by Camera Corp. to be fixed, and receives the repaired camera back in Massachusetts by mail. The sale of the service is in Massachusetts.
Example 6. Teaching Corp. provides seminars in Massachusetts to individual and business customers. The seminars and the materials used in connection with the seminars are prepared outside the state, the teachers who teach the seminars include teachers that are resident outside the state, and the students who attend the seminars include students that are resident outside the state. Because the seminars are taught in Massachusetts the sales of the services are in Massachusetts.
Example 7. Bus Corp. sells bus tickets to individual and business customers at bus depots located in Massachusetts and in other states, and also through phone and Internet sales. The bus tickets are for travel to locations in Massachusetts and to locations in other states. During the taxable year, Bus Corp. sells 150,000 bus tickets. Each ticket has a departure location and an arrival location, for a total of 300,000 departure and arrival locations. Of these bus tickets, 25,000 have a departure location in Massachusetts and 20,000 have an arrival location in Massachusetts. The sale of such transportation services shall be assigned by multiplying Bus Corp.'s total revenues from such services by the percentage of Bus Corp.'s total departures and arrivals that take place in Massachusetts relative to Bus Corp.'s total number of departures and arrivals. Therefore, Bus Corp. must determine the amount of its ticket sales that are to be assigned to Massachusetts by multiplying its total such sales by a fraction equal to 45,000 divided by 300,000, or.15. For purposes of the analysis it is irrelevant where and how the bus tickets are sold or whether the customer is an individual or business customer.
Example 1. Direct Mail Corp., a corporation based outside Massachusetts, provides direct mail services to its customer, Business Corp. Business Corp. transacts with Direct Mail Corp. to deliver printed fliers to a list of customers that is provided to it by Business Corp. Some of Business Corp.'s customers are in Massachusetts and some of those customers are in other states. Direct Mail Corp. will use the postal service to deliver the printed fliers to Business Corp'.s customers. The sale of Direct Mail Corp.'s services to Business Corp. is assigned to Massachusetts to the extent that the services are delivered on behalf of Business Corp. to Massachusetts customers (i.e., to the extent that the fliers are delivered on behalf of Business Corp. to Business Corp.'s intended audience in Massachusetts).
Example 2. Ad Corp. is a corporation based outside Massachusetts that provides advertising and advertising-related services in Massachusetts and in neighboring states. Ad Corp. enters into a contract at a location outside Massachusetts with an individual customer who is not a Massachusetts resident to design advertisements for billboards to be displayed in Massachusetts, and to design fliers to be mailed to Massachusetts residents. All of the design work is performed outside Massachusetts. The sale of the design services is in Massachusetts because the service is physically delivered on behalf of the customer to the customer's intended audience in Massachusetts.
Example 3. Same facts as Example 2, except that the contract is with a business customer that is based outside Massachusetts. The sale of the design services is in Massachusetts because the services are physically delivered on behalf of the customer to the customer's intended audience in Massachusetts.
Example 4. Fulfillment Corp., a corporation based outside Massachusetts, provides product delivery fulfillment services in Massachusetts and in neighboring states to Sales Corp., a corporation located outside Massachusetts that sells tangible personal property through a mail order catalog and over the Internet to customers. In some cases when a customer purchases tangible personal property from Sales Corp. to be delivered in Massachusetts, Fulfillment Corp. will, pursuant to its contract with Sales Corp., deliver that property from its fulfillment warehouse located outside Massachusetts. The sale of the fulfillment services of Fulfillment Corp. to Sales Corp. is assigned to Massachusetts to the extent that Fulfillment Corp'.s deliveries on behalf of Sales Corp. are to recipients in Massachusetts.
Example 5. Software Corp., a software development corporation, enters into a contract with a business customer, Buyer Corp., which is physically located in Massachusetts, to develop custom software to be used in Buyer Corp.'s business. Software Corp. develops the custom software outside Massachusetts, and then physically installs the software on Buyer Corp.'s computer hardware located in Massachusetts. The development and sale of the custom software is properly characterized as a service transaction, and the sale is assigned to Massachusetts because the software is physically delivered to the customer in Massachusetts.
Example 6. Same facts as Example 5, except that Buyer Corp. has offices in Massachusetts and several other states, but is commercially domiciled outside Massachusetts and orders the software from a location outside Massachusetts. The receipts from the development and sale of the custom software service are assigned to Massachusetts because the software is physically delivered to the customer in Massachusetts.
Example 1. Support Corp., a corporation that is based outside Massachusetts, provides software support and diagnostic services to individual and business customers that have previously purchased certain software from third-party vendors. These individual and business customers are located in Massachusetts and other states. Support Corp. supplies its services on a case by case basis when directly contacted by its customer. Support Corp. generally provides these services through the Internet but sometimes provides these services by phone. In all cases, Support Corp. verifies the customer's account information before providing any service. Using the information that Support Corp. verifies before performing a service, Support Corp. can determine where its services are received, and therefore must assign its sales to these locations. The sales made to Support Corp.'s individual and business customers are in Massachusetts to the extent that Support Corp.'s services are received in Massachusetts. See830 CMR 63.38.1(9)(d)4.c.ii.(B)1. and 2.
Example 2. Online Corp., a corporation based outside Massachusetts, provides web-based services through the means of the Internet to individual customers who are resident in Massachusetts and in other states. These customers access Online Corp.'s web services primarily in their states of residence, and sometimes, while traveling, in other states. For a substantial portion of its sales, either Online Corp. can determine the state or states where such services are received, or, where it cannot determine such state or states, it has sufficient information regarding the place of receipt to reasonably approximate such state or states. However, Online Corp. cannot determine or reasonably approximate the state or states of receipt for all of such sales. Assuming that Online Corp. reasonably believes, based on all available information, that the geographic distribution of the sales for which it cannot determine or reasonably approximate the location of the receipt of its services generally tracks those for which it does have this information, Online Corp. must assign to Massachusetts the sales for which it does not know the customers' location in the same proportion as those sales for which it has this information. See830 CMR 63.38.1(9)(d)1.e.ii.
Example 3. Same facts as in Example 2, except that Online Corp. reasonably believes that the geographic distribution of the sales for which it cannot determine or reasonably approximate the location of the receipt of its web-based services do not generally track the sales for which it does have this information. Online Corp. must assign the sales of its services for which it lacks information as provided to its individual customers using the customers' billing addresses. See830 CMR 63.38.1(9)(d)4.c.ii.(B)1.b.
Example 4. Same facts as in Example 3, except that Online Corp. is not taxable in one state to which some of its sales would be otherwise assigned. The sales that would be otherwise assigned to that state are to be excluded from the numerator and denominator of Online Corp.'s sales factor. See830 CMR 63.38.1(9)(d)4.c.ii.(B); 830 CMR 63.38.1(9)(d)1.f.ii.
Example 5. Net Corp., a corporation based outside Massachusetts, provides web-based services to a business customer, Business Corp., a company with offices in Massachusetts and two neighboring states. Particular employees of Business Corp. access the services from computers in each Business Corp. office. Assume that Net Corp. determines that Business Corp. employees in Massachusetts were responsible for 75% of Business Corp.'s use of Net Corp.'s services, and Business Corp. employees in other states were responsible for 25% of Business Corp.'s use of Net Corp.'s services. In such case, 75% of the sale is received in Massachusetts, and therefore 75% of the sale is in Massachusetts. See830 CMR 63.38.1(9)(d)4.c.ii.(B)2.a. Assume alternatively that Net Corp. lacks sufficient information regarding the location or locations where Business Corp.'s employees used the services to determine or reasonably approximate such location or locations. Under these circumstances, if Net Corp. derives 5% or less of its sales from Business Corp., Net Corp. must assign the sale under 830 CMR 63.38.1(9)(d)4.c.ii.(B)2.c. to the state where Business Corp. principally managed the contract, or if that state is not reasonably determinable, to the state where Business Corp. placed the order for the services, or if that state is not reasonably determinable, to the state of Business Corp.'s billing address. If Net Corp. derives more than 5% of its sales of services from Business Corp., Net Corp. is required to identify the state in which its contract of sale is principally managed by Business Corp. and must assign the receipts to that state.
Example 6. Net Corp., a corporation based outside Massachusetts, provides web-based services through the means of the Internet to more than 250 individual and business customers in Massachusetts and in other states. Assume that for each customer Net Corp. cannot determine the state or states where its web services are actually received, and lacks sufficient information regarding the place of receipt to reasonably approximate such state or states. Also assume that Net Corp. does not derive more than 5% of its sales of services from any single customer. Net Corp. may apply the safe harbor stated in 830 CMR 63.38.1(9)(d)4.c.ii.(B)2.d., and may assign its sales using each customer's billing address. If Net Corp. is not taxable in one or more states to which some of its sales would be otherwise assigned, it must exclude those sales from the numerator and denominator of its sales factor. See 830 CMR 63.38.1(9)(d)1.f.ii.
Example 1. Cable TV Corp., a corporation that is based outside of Massachusetts, has two revenue streams. First, Cable TV Corp. sells advertising time to business customers pursuant to which the business customers' advertisements will run as commercials during Cable TV Corp.'s televised programming. Some of these business customers, though not all of them, have a physical presence in Massachusetts. Second, Cable TV Corp. sells monthly subscriptions to individual customers in Massachusetts and in other states. Cable TV Corp.'s sale of advertising time to its business customers is assigned to Massachusetts to the extent that the audience for Cable TV Corp.'s televised programming during which the advertisements run is in Massachusetts. See830 CMR 63.38.1(9)(d)4.c.ii.(C)1. If Cable TV Corp. is unable to determine the actual location of its audience for the programming, and lacks sufficient information regarding audience location to reasonably approximate such location, Cable TV Corp. must approximate its Massachusetts audience using the percentage that reflects the ratio of its Massachusetts subscribers in the geographic area in which Cable TV Corp.'s televised programming featuring such advertisements is delivered relative to its total number of subscribers in such area. See830 CMR 63.38.1(9)(d)4.c.ii.(C)3.i. To the extent that Cable TV Corp.'s sales of monthly subscriptions represent the sale of a service, such sales are properly assigned to Massachusetts in any case in which the programming is received by a customer in Massachusetts. See830 CMR 63.38.1(9)(d)4.c.ii.(B)1. In any case in which Cable TV Corp. cannot determine the actual location where the programming is received, and lacks sufficient information regarding the location of receipt to reasonably approximate such location, such sales of Cable TV Corp.'s monthly subscriptions are assigned to Massachusetts where its customer's billing address is in Massachusetts. See830 CMR 63.38.1(9)(d)4.c.ii.(B)1.b. Note that whether and to the extent that the monthly subscription fee represents a fee for a service or for a license of intangible property does not affect the analysis or result as to the state or states to which the sales are properly assigned. See830 CMR 63.38.1(9)(d)5.e.
Example 2. Network Corp., a corporation that is based outside of Massachusetts, sells advertising time to business customers pursuant to which the customers' advertisements will run as commercials during Network Corp.'s televised programming as distributed by unrelated cable television and satellite television transmission companies. Network Corp.'s sale of advertising time to its business customers is assigned to Massachusetts to the extent that the audience for Network Corp.'s televised programming during which the advertisements will run is in Massachusetts. See830 CMR 63.38.1(9)(d)4.c.ii.(C)1. If Network Corp. cannot determine the actual location of the audience for its programming during which the advertisements will run, and lacks sufficient information regarding audience location to reasonably approximate such location, Network Corp. must approximate the amount of the sales that constitutes Massachusetts sales by multiplying the amount of such sales by a percentage that reflects the ratio of the Massachusetts population in the specific geographic area in which the televised programming containing the advertising is run relative to the total population in such area. See830 CMR 63.38.1(9)(d)4.c.ii.(C)3.i. In any case in which Network Corp.'s sales would be assigned to a state in which Network Corp. is not taxable, such sales shall be excluded from the numerator and denominator of Network Corp.'s sales factor. See830 CMR 63.38.1(9)(d)1.f.ii.
Example 3. Web Corp., a corporation that is based outside Massachusetts, provides Internet content to viewers in Massachusetts and other states. Web Corp. sells advertising space to business customers pursuant to which the customers' advertisements will appear in connection with Web Corp.'s Internet content. Web Corp. receives a fee for running the advertisements that is determined by reference to the number of times the advertisement is viewed or clicked upon by the viewers of its website. Web Corp.'s sale of advertising space to its business customers is assigned to Massachusetts to the extent that the viewers of the Internet content are in Massachusetts, as measured by viewings or clicks. See830 CMR 63.38.1(9)(d)4.c.ii.(C)1. If Web Corp. is unable to determine the actual location of its viewers, and lacks sufficient information regarding the location of its viewers to reasonably approximate such location, Web Corp. must approximate the amount of its Massachusetts sales by multiplying the amount of such sales by a percentage that reflects the Massachusetts population in the specific geographic area in which the content containing the advertising is delivered relative to the total population in such area. See830 CMR 63.38.1(9)(d)4.c.ii.(C)3.i. In any case in which Web Corp.'s sales would be assigned to a state in which Web Corp. is not taxable, such sales shall be excluded from the numerator and denominator of Web Corp.'s sales factor. See830 CMR 63.38.1(9)(d).1.f.ii.
Example 4. Retail Corp., a corporation that is based outside of Massachusetts, sells tangible property through its retail stores located in Massachusetts and other states, and through a mail order catalog. Answer Co., a corporation that operates call centers in multiple states, contracts with Retail Corp. to answer telephone calls from individuals placing orders for products found in Retail Corp.'s catalogs. In this case, the phone answering services of Answer Co. are being delivered to Retail Corp.'s customers and prospective customers. Therefore, Answer Co. is delivering a service electronically to Retail Corp.'s customers or prospective customers on behalf of Retail Corp., and must assign the proceeds from this service to the state or states from which the phone calls are placed by such customers or prospective customers. If Answer Co. cannot determine the actual locations from which phone calls are placed, and lacks sufficient information regarding the locations to reasonably approximate such locations, Answer Co. must approximate the amount of its Massachusetts sales by multiplying the amount of its fee from Retail Corp. by a percentage that reflects the Massachusetts population in the specific geographic area from which the calls are placed relative to the total population in such area. See830 CMR 63.38.1(9)(d)4.c.i; 830 CMR 63.38.1(9)(d)4.c.ii(C). Answer Co.'s sales shall also be excluded from the numerator and denominator of its sales factor in any case in which such sales would be assigned to a state in which Answer Co. is not taxable. See830 CMR 63.38.1(9)(d).1.f.ii.
Example 5. Web Corp., a corporation that is based outside of Massachusetts, sells tangible property to customers via its Internet website. Design Co. designed and maintains Web Corp.'s website, including making changes to the site based on customer feedback received through the site. Design Co.'s services are delivered to Web Corp., the proceeds from which are assigned pursuant to 830 CMR 63.38.1(9)(d)4.c.ii(B). The fact that Web Corp.'s customers and prospective customers incidentally benefit from Design Co.'s services, and may even interact with Design Co. in the course of providing feedback, does not transform the service into one delivered "on behalf of" Web Corp. to Web Corp.'s customers and prospective customers.
Example 6. Wholesale Corp., a corporation that is based outside Massachusetts, develops an Internet-based information database outside Massachusetts and enters into a contract with Retail Corp. whereby Retail Corp. will market and sell access to this database to end users. Depending on the facts, the provision of database access may be either the sale of a service or the license of intangible property or may have elements of both. Assume that on the particular facts applicable in this example Wholesale Corp. is selling database access in transactions properly characterized as involving the performance of a service. When an end user purchases access to Wholesale Corp.'s database from Retail Corp., Retail Corp. in turn compensates Wholesale Corp. in connection with that transaction. In this case, Wholesale Corp.'s services are being delivered through Retail Corp to the end user. Wholesale Corp. must assign its sales to Retail Corp. to the state or states in which the end users receive access to Wholesale Corp.'s database. If Wholesale Corp. cannot determine the state or states where the end users actually receive access to Wholesale Corp.'s database, and lacks sufficient information regarding the location from which the end users access the database to reasonably approximate such location, Wholesale Corp. must approximate the extent to which its services are received by end users in Massachusetts by using a percentage that reflects the ratio of the Massachusetts population in the specific geographic area in which Retail Corp. regularly markets and sells Wholesale Corp.'s database relative to the total population in such area. See830 CMR 63.38.1(9)(d)4.c.ii.(C)3.ii. Note that it does not matter for purposes of the analysis whether Wholesale Corp's sale of database access constitutes a service or a license of intangible property, or some combination of both. See830 CMR 63.38.1(9)(d)5.e. In any case in which Wholesale Corp.'s sales would be assigned to a state in which Wholesale Corp. is not taxable, such sales shall be excluded from the numerator and denominator of Wholesale Corp.'s sales factor. See830 CMR 63.38.1(9)(d).1.f.ii.
Example 1. Broker Corp. provides securities brokerage services to individual customers who are resident in Massachusetts and in other states. Assume that Broker Corp. knows the state of primary residence for many of its customers, and where it does not know this state of primary residence, it knows the customer's billing address. Also assume that Broker Corp. does not derive more than 5% of its sales of services from any one individual customer. Where Broker Corp. knows its customer's state of primary residence, it shall assign the sale to that state. Where Broker Corp. does not know its customer's state of primary residence, but rather knows the customer's billing address, it shall assign the sale to that state. See830 CMR 63.38.1(9)(d)4.d.iii.(A)1.
Example 2. Same facts as in Example 1, except that Broker Corp. has several individual customers from whom it derives, in each instance, more than 5% of its sales of services. Sales to customers from whom Broker Corp. derives 5% or less of its sales of services shall be assigned as described in example 1. For each customer from whom it derives more than 5% of its sales of services, Broker Corp. is required to determine the customer's state of primary residence and must assign the receipts from the services provided to that customer to that state. In any case in which a 5% customer's state of primary residence is Massachusetts, a sale made to that customer must be assigned to Massachusetts; in any case in which a 5% customer's state of primary residence is not Massachusetts a sale made to that customer is not assigned to Massachusetts. Where a sale is assigned to a state other than Massachusetts, if the state of assignment (i.e., the state of primary residence of the individual customer) is a state in which Broker Corp. is not taxable, receipts from the sales shall be excluded from the numerator and denominator of Broker Corp.'s sales factor. See 830 CMR 63. 38. 1(9)(d)4.d.iii.(A); 830 CMR 63.38.1(9)(d)1.f.ii.
Example 3. Architecture Corp. provides building design services as to buildings located, or expected to be located, in Massachusetts to individual customers who are resident in Massachusetts and other states, and to business customers that are based in Massachusetts and other states. Architecture Corp.'s sales are assigned to Massachusetts because the locations of the buildings to which its design services relate are in Massachusetts, or are expected to be in Massachusetts. For purposes of assigning these sales, it is not relevant where, in the case of an individual customer, the customer primarily resides or is billed for such services, and it is not relevant where, in the case of a business customer, the customer principally manages the contract, placed the order for the services or is billed for such services. Further, such sales are assigned to Massachusetts even if Architecture Corp.'s designs are either physically delivered to its customer in paper form in a state other than Massachusetts or are electronically delivered to its customer in a state other than Massachusetts. See830 CMR 63.38.1(9)(d)4.d.iii.(B).
Example 4. Law Corp. provides legal services to individual clients who are resident in Massachusetts and in other states. In some cases, Law Corp. may prepare one or more legal documents for its client as a result of these services and/or the legal work may be related to litigation or a legal matter that is ongoing in a state other than where the client is resident. Assume that Law Corp. knows the state of primary residence for many of its clients, and where it does not know this state of primary residence, it knows the client's billing address. Also assume that Law Corp. does not derive more than 5% of its sales of services from any one individual client. Where Law Corp. knows its client's state of primary residence, it shall assign the sale to that state. Where Law Corp. does not know its client's state of primary residence, but rather knows the client's billing address, it shall assign the sale to that state. For purposes of the analysis it is irrelevant whether the legal documents relating to the service are mailed or otherwise delivered to a location in another state, or the litigation or other legal matter that is the underlying predicate for the services is in another state. See830 CMR 63.38.1(9)(d)4.d.ii.(B) and iii.(A)1.
Example 5. Same facts as in Example 4, except that Law Corp. provides legal services to several individual clients who it knows have a primary residence in a state where Law Corp. is not taxable. Receipts from these services shall be excluded from the numerator and denominator of Law Corp.'s sales factor even if the billing address of one or more of these clients is in a state in which Law Corp. is taxable, including Massachusetts. See830 CMR 63.38.1(9)(d)4.d.iii.(A)1.; 830 CMR 63.38.1(9)(d)1.f.ii.
Example 6. Law Corp. provides legal services to several multistate business clients. In each case, Law Corp. knows the state in which the agreement for legal services that governs the client relationship is principally managed by the client. In one case, the agreement is principally managed in Massachusetts; in the other cases, the agreement is principally managed in a state other than Massachusetts. Where the agreement for legal services is principally managed by the client in Massachusetts the sale of the services shall be assigned to Massachusetts; in the other cases, the sale is not assigned to Massachusetts. In the case of the sale that is assigned to Massachusetts, the sale shall be so assigned even if (1) the legal documents relating to the service are mailed or otherwise delivered to a location in another state, or (2) the litigation or other legal matter that is the underlying predicate for the services is in another state. See830 CMR 63.38.1(9)(d)4.d.ii.(B) and iii.(A)2.
Example 7. Same facts as in example 6, except that Law Corp. is not taxable in one of the states other than Massachusetts in which Law Corp.'s agreement for legal services that governs the client relationship is principally managed by the business client. Receipts from these latter services shall be excluded from the numerator and denominator of Law Corp.'s sales factor. See830 CMR 63.38.1(9)(d)4.d.iii. and iii.(A)2.; 830 CMR 63.38.1(9)(d)1.f.ii.
Example 8. Consulting Corp., a company that provides consulting services to law firms and other customers, is hired by Law Corp. in connection with legal representation that Law Corp. provides to Client Co. Specifically, Consulting Corp. is hired to provide expert testimony at a trial being conducted by Law Corp. on behalf of Client Co. Client Co. pays for Consulting Corp.'s services directly. Assuming that Consulting Corp. knows that its agreement with Law Co. is principally managed by Law Corp. in Massachusetts, the sale of Consulting Corp.'s services shall be assigned to Massachusetts. It is not relevant for purposes of the analysis that Client Co. is the ultimate beneficiary of Consulting Corp.'s services, or that Client Co. pays for Consulting Corp.'s services directly. See830 CMR 63.38.1(9)(d)4.d.iii.(A)2.
Example 9. Bank Corp. provides financial custodial services to 100 individual customers who are resident in Massachusetts and in other states, including the safekeeping of some of its customers' financial assets. Assume for purposes of this example that Bank Corp. knows the state of primary residence for many of its customers, and where it does not know this state of primary residence, it knows the customer's billing address. Also assume that Bank Corp. does not derive more than 5% of its sales of all of its services from any single customer. Note that because Bank Corp. does not have more than 250 customers, it may not apply the safe harbor for professional services stated in 830 CMR 63.38.1(9)(d)4.d.iii.(A)3. Where Bank Corp. knows its customer's state of primary residence, it must assign the sale to that state. Where Bank Corp. does not know its customer's state of primary residence, but rather knows the customer's billing address, it must assign the sale to that state. Bank Corp.'s sales are assigned to Massachusetts if the customer's state of primary residence (or billing address, in cases where it does not know the customer's state of primary residence) is in Massachusetts, even if Bank Corp.'s financial custodial work, including the safekeeping of the customer's financial assets, takes place in a state other than Massachusetts. See830 CMR 63.38.1(9)(d)4.d.iii.(A)1. and (C).
Example 10. Same facts as Example 9, except that Bank Corp. has more than 250 customers, individual or business. Bank Corp. may apply the safe harbor for professional services stated in 830 CMR 63.38.1(9)(d)4.d.iii.(A)3., and may assign its sales to a state or states using each customer's billing address. If Bank Corp is not taxable in one or more states to which some of its sales would be assigned, it must exclude the sales that would be assigned to those states from the numerator and denominator of its sales factor. See830 CMR 63.38.1(9)(d)4.d.iii., iii.(C); 830 CMR 63.38.1(9)(d)1.f.ii.
Example 11. Same facts as Example 10, except that Bank Corp. derives more than 5% of its sales from a single individual customer. As to the sales made to this customer, Bank Corp. is required to determine the individual customer's state of primary residence and must assign the receipts from the service or services provided to that customer to that state. See830 CMR 63.38.1(9)(d)4.d.iii.(A)1., iii.(C). Sales to all other customers are assigned as described in Example 10.
Example 12. Advisor Corp., a corporation that provides investment advisory services, provides such advisory services to Investment Co. Investment Co. is a multistate business client of Advisor Corp. that uses Advisor Corp.'s services in connection with investment accounts that it manages for individual clients, who are the ultimate beneficiaries of Advisor Corp.'s services. Assume that Investment Co.'s individual clients are persons that are resident in numerous states, which may or may not include Massachusetts. Assuming that Advisor Corp. knows that its agreement with Investment Co. is principally managed by Investment Co. in Massachusetts, the sale of Advisor Corp.'s services shall be assigned to Massachusetts. It is not relevant for purposes of the analysis that the ultimate beneficiaries of Advisor Corp.'s services may be Investment Co.'s clients, who are residents of numerous states. See830 CMR 63.38.1(9)(d)4.d.iii.(A)2.
Example 13. Same facts as Example 12, except that in addition to providing investment advisory services to Investment Co., Advisor Corp. also provides its advisory services to Mutual Fund Co., a regulated investment company with shareholders that are resident in numerous states, including Massachusetts. Advisor Corp. is not a mutual fund service corporation; however Advisor Corp.'s services provided to Mutual Fund Co. constitute mutual fund sales within the meaning of 830 CMR 63.38.1. See830 CMR 63.38.1(2). Advisor Corp.'s mutual fund sales to Mutual Fund Co. shall be assigned to Massachusetts to the extent that Mutual Fund Co.'s shareholders of record are domiciled in Massachusetts. See830 CMR 63.38.1(9)(d)4.d.iii.(D). However, unlike in the rule set forth generally in 830 CMR 63.38.1(9)(d), there shall be no exclusion of such sales from the numerator and denominator of Advisor Corp.'s sales factor in any case in which such shareholders of record are domiciled in a state in which Advisor Corp. is not taxable. See id. In contrast to its mutual fund sales made to Mutual Fund Co., Advisor Corp.'s advisory services provided to Investment Co. are assigned as stated in Example 12, and its sales to Investment Co. shall be excluded from the numerator and denominator of Advisor Corp.'s sales factor if such sales would be assigned to a state in which Advisor Corp. is not taxable. See830 CMR 63.38.1(9)(d)4.d.iii. and iii.(A)2.
Example 14. Advisor Corp. provides investment advisory services to Investment Fund LP, a partnership that invests in securities and other assets. Assuming that Advisor Corp. knows that its agreement with Investment Fund LP is principally managed by Investment Fund LP in Massachusetts, the sale of Advisor Corp.'s services shall be assigned to Massachusetts. See830 CMR 63.38.1(9)(d)4.d.iii.(A)2. Note that, unlike in the case of mutual fund sales (see 830 CMR 63.38.1(9)(d)4.d.iii.(D)), it is not relevant for purposes of the analysis that the partners in Investment Fund LP are residents of numerous states.
Example 15. Design Corp. is a corporation based outside Massachusetts that provides graphic design and similar services in Massachusetts and in neighboring states. Design Corp. enters into a contract at a location outside Massachusetts with an individual customer to design fliers for the customer. Assume that Design Corp. does not know the individual customer's state of primary residence and does not derive more than 5% of its sales of services from the individual customer. All of the design work is performed outside Massachusetts. The sale is in Massachusetts if the customer's billing address is in Massachusetts. See 830 CMR 63.38.1(9)(d)4.d.iii.(A)1.
Example 1. Crayon Corp. and Dealer Co. enter into a license contract under which Dealer Co. as licensee is permitted to use trademarks that are owned by Crayon Corp. in connection with Dealer Co.'s sale of certain products to retail customers. Under the contract, Dealer Co. is required to pay Crayon Corp. a licensing fee that is a fixed percentage of the total volume of monthly sales made by Dealer Co. of products using the Crayon Corp. trademarks. Under the contract, Dealer Co. is permitted to sell the products at multiple store locations, including store locations that are both within and without Massachusetts. Further, the licensing fees that are paid by Dealer Co. are broken out on a per-store basis. The licensing fees paid to Crayon Corp. by Dealer Co. represent fees from the license of a marketing intangible. The portion of the fees to be assigned to Massachusetts shall be determined by multiplying the fees by a percentage that reflects the ratio of Dealer Co.'s receipts that are derived from its Massachusetts stores relative to Dealer Co.'s total receipts. See830 CMR 63.38.1(9)(d)5.b.
Example 2. Program Corp., a corporation that is based outside Massachusetts, licenses programming that it owns to licensees, such as cable networks, that in turn will offer the programming to their customers on television or other media outlets in Massachusetts and in all other U.S. states. Each of these licensing contracts constitutes the license of a marketing intangible. For each licensee, assuming that Program Corp. lacks evidence of the actual number of viewers of the programming in Massachusetts, the component of the licensing fee paid to Program Corp. by the licensee that constitutes Program Corp.'s Massachusetts sales is determined by multiplying the amount of the licensing fee by a percentage that reflects the ratio of the Massachusetts audience of the licensee for the programming relative to the licensee's total U.S. audience for the programming. See830 CMR 63.38.1(9)(d)5.b. If Program Corp. is not taxable in any state in which the licensee's audience is located, the sales that would be assigned to such state shall be excluded from the numerator and denominator of Program Corp.'s sales factor. See830 CMR 63.38.1(9)(d)1.f.ii. Note that the analysis and result as to the state or states to which sales are properly assigned would be the same to the extent that the substance of Program Corp.'s licensing transactions may be determined to resemble a sale of goods or services, instead of the license of a marketing intangible. See830 CMR 63.38.1(9)(d)5.e.
Example 3. Moniker Corp. enters into a license contract with Wholesale Co. Pursuant to the contract Wholesale Co. is granted the right to use trademarks owned by Moniker Corp. to brand sports equipment that is to be manufactured by Wholesale Co. or an unrelated entity, and to sell the manufactured equipment to unrelated companies that will ultimately market the equipment to consumers in a specific geographic region, including a foreign country. The license agreement confers a license of a marketing intangible, even though the trademarks in question will be affixed to property to be manufactured. In addition, the license of the marketing intangible is for the right to use the intangible property in connection with sales to be made at wholesale rather than directly to retail customers. The component of the licensing fee that constitutes the Massachusetts sales of Moniker Corp. is determined by multiplying the amount of the fee by a percentage that reflects the ratio of the Massachusetts population in the specific geographic region relative to the total population in such region. See830 CMR 63.38.1(9)(d)5.b. If Moniker Corp. is not taxable in any state (including a foreign country, see830 CMR 63.38.1(2)) in which Wholesale Co.'s ultimate consumers are located, the sales that would be assigned to such state shall be excluded from the numerator and denominator of Moniker Corp.'s sales factor. See830 CMR 63.38.1(9)(d)1.f.ii.
Example 4. Formula, Inc and Appliance Co. enter into a license contract under which Appliance Co. is permitted to use a patent owned by Formula, Inc. to manufacture appliances. The license contract specifies that Appliance Co. is to pay Formula, Inc. a royalty that is a fixed percentage of the gross receipts from the products that are later sold. The contract does not specify any other fees. The appliances are both manufactured and sold in Massachusetts and several other states. Assume the licensing fees are paid for the license of a production intangible, even though the royalty is to be paid based upon the sales of a manufactured product (i.e., the license is not one that includes a marketing intangible). Because the Commissioner can reasonably establish that the actual use of the intangible property takes place in part in Massachusetts, the royalty is assigned based to the location of such use rather than to location of the licensee's commercial domicile, in accordance with 830 CMR 63.38.1(9)(d)5.c. It is presumed that the entire use is in Massachusetts except to the extent that the taxpayer can demonstrate that the actual location of some or all of the use takes place outside Massachusetts. Assuming that Formula, Inc. can demonstrate the percentage of manufacturing that takes place in Massachusetts using the patent relative to such manufacturing in other states, that percentage of the total licensing fee paid to Formula, Inc. under the contract will constitute Formula, Inc.'s Massachusetts sales. See830 CMR 63.38.1(9)(d)5.c.
Example 5. Axel Corp. enters into a license agreement with Biker Co. in which Biker Co. is granted the right to produce motor scooters using patented technology owned by Axel Corp., and also to sell such scooters by marketing the fact that the scooters were manufactured using the special technology. The contract is a license of both a marketing and production intangible, i.e., a mixed intangible. The scooters are manufactured outside Massachusetts. Assume that Axel Corp. lacks actual information regarding the proportion of Biker Co.'s receipts that are derived from Massachusetts customers. Also assume that Biker Co. is granted the right to sell the scooters in a U.S. geographic region in which the Massachusetts population constitutes 25% of the total population during the period in question. The licensing contract requires an up front licensing fee to be paid by Biker Co. to Axel Corp. and does not specify what percentage of the fee derives from Biker Co.'s right to use Axel Corp.'s patented technology. Because the fees for the license of the marketing and production intangible are not separately and reasonably stated in the contract, it is presumed that the licensing fees are paid entirely for the license of a marketing intangible, unless either the taxpayer or Commissioner reasonably establishes otherwise. Assuming that neither party establishes otherwise, 25% of the licensing fee constitutes Massachusetts sales. See830 CMR 63.38.1(9)(d)5.b. and d.
Example 6. Same facts as Example 5, except that the license contract specifies separate fees to be paid for the right to produce the motor scooters and for the right to sell the scooters by marketing the fact that the scooters were manufactured using the special technology. The licensing contract constitutes both the license of a marketing intangible and the license of a production intangible. Assuming that the separately stated fees are reasonable, the Commissioner will:
Example 7. Better Burger Corp., which is based outside Massachusetts, enters into franchise contracts with franchisees who agree to operate Better Burger restaurants as franchisees in various states. Several of the Better Burger Corp. franchises are in Massachusetts. In each case, the franchise contract between the individual and Better Burger provides that the franchisee is to pay Better Burger Corp. an upfront fee for the receipt of the franchise and monthly franchise fees, which cover, among other things, the right to use the Better Burger name and service marks, food processes and cooking know-how, as well as fees for management services. The upfront fees for the receipt of the Massachusetts franchises constitute fees paid for the licensing of a marketing intangible. These fees constitute Massachusetts sales because the franchises are for the right to make Massachusetts sales. The monthly franchise fees paid by Massachusetts franchisees constitute fees paid for (1) the license of marketing intangibles (the Better Burger name and service marks), (2) the license of production intangibles (food processes and know-how) and (3) personal services (management fees). The fees paid for the license of the marketing intangibles and the production intangibles constitute Massachusetts sales because in each case the use of the intangibles is to take place in Massachusetts. See830 CMR 63.38.1(9)(d)5.b. and c. The fees paid for the personal services are to be assigned pursuant to 830 CMR 63.38.1(9)(d)4.
Example 8. Online Corp., a corporation based outside Massachusetts, licenses an information database through the means of the Internet to individual customers that are resident in Massachusetts and in other states. These customers access Online Corp.'s information database primarily in their states of residence, and sometimes, while traveling, in other states. The license is a license of intangible property that resembles a sale of goods or services and shall be assigned in accordance with 830 CMR 63.38.1(9)(d)5.e. If Online Corp. can determine or reasonably approximate the state or states where its database is accessed, then it must do so. Assuming that Online Corp. cannot determine or reasonably approximate the location where its database is accessed, Online Corp. must assign the sales made to the individual customers using the customers' billing addresses to the extent known. Assume for purposes of this example that Online Corp. knows the billing address for each of its customers. In this case, Online Corp.'s sales made to its individual customers are in Massachusetts in any case in which the customer's billing address is in Massachusetts. See830 CMR 63.38.1(9)(d)4.c.ii.(B)1.
Example 9. Net Corp., a corporation based outside Massachusetts, licenses an information database through the means of the Internet to a business customer, Business Corp., a company with offices in Massachusetts and two neighboring states. The license is a license of intangible property that resembles a sale of goods or services and shall be assigned in accordance with 830 CMR 63.38.1(9)(d)5.e. Assume that Net Corp. cannot determine where its database is accessed but reasonably approximates that 75% of Business Corp.'s database access took place in Massachusetts, and 25% of Business Corp.'s database access took place in other states. In such case, 75% of the receipts from database access is in Massachusetts. Assume alternatively that Net Corp. lacks sufficient information regarding the location where its database is accessed to reasonably approximate such location. Under these circumstances, if Net Corp. derives 5% or less of its receipts from database access from Business Corp., Net Corp. must assign the sale under 830 CMR 63.38.1(9)(d)4.c.ii.(B)2. to the state where Business Corp. principally managed the contract, or if that state is not reasonably determinable to the state where Business Corp. placed the order for the services, or if that state is not reasonably determinable to the state of Business Corp.'s billing address. If Net Corp. derives more than 5% of its receipts from database access from Business Corp., Net Corp. is required to identify the state in which its contract of sale is principally managed by Business Corp. and must assign the receipts to that state. See830 CMR 63.38.1(9)(d)4.c.ii.(B)2.
Example 10. Net Corp., a corporation based outside Massachusetts, licenses an information database through the means of the Internet to more than 250 individual and business customers in Massachusetts and in other states. The license is a license of intangible property that resembles a sale of goods or services and shall be assigned in accordance with 830 CMR 63.38.1(9)(d)5.e. Assume that Net Corp. cannot determine or reasonably approximate the location where its information database is accessed. Also assume that Net Corp. does not derive more than 5% of its sales of database access from any single customer. Net Corp. may apply the safe harbor stated in 830 CMR 63.38.1(9)(d)4.c.ii.(B)2.d., and may assign its sales to a state or states using each customer's billing address. If Net Corp. is not taxable in one or more states to which some of its sales would be otherwise assigned, it must exclude those sales from the numerator and denominator of its sales factor. See830 CMR 63.38.1(9)(d)1.f.ii.
Example 11. Web Corp., a corporation based outside of Massachusetts, licenses an Internet-based information database to business customers who then sublicense the database to individual end users that are resident in Massachusetts and in other states. These end users access Web Corp.'s information database primarily in their states of residence, and sometimes, while traveling, in other states. Web Corp.'s license of the database to its customers includes the right to sublicense the database to end users, while the sublicenses provide that the rights to access and use the database are limited to the end users' own use and prohibit the individual end users from further sublicensing the database. Web Corp. receives a fee from each customer based upon the number of sublicenses issued to end users. The license is a license of intangible property that resembles a sale of goods or services and shall be assigned by applying the rules set forth in 830 CMR 63.38.1(9)(d)4.c.ii.(C). See830 CMR 63.38.1(9)(d)5.e. If Web Corp. can determine or reasonably approximate the state or states where its database is accessed by end users, then it must do so. Assuming that Web Corp. lacks sufficient information from which it can determine or reasonably approximate the location where its database is accessed by end users, Web Corp. must approximate the extent to which its database is accessed in Massachusetts using a percentage that represents the ratio of the Massachusetts population in the specific geographic area in which Web Corp.'s customer sublicenses the database access relative to the total population in such area. See830 CMR 63.38.1(9)(d)4.c.ii.(C)3.ii.
Example 1. Airline Corp., a corporation based outside Massachusetts, sells its rights to use several gates at an airport located in Massachusetts to Buyer Corp., a corporation that is based outside Massachusetts. The contract of sale is negotiated and signed outside of Massachusetts. The sale is in Massachusetts because the intangible property sold is a contract right that authorizes the holder to conduct a business activity solely in Massachusetts. See830 CMR 63.38.1(9)(d)6.a.i.
Example 2. Wireless Corp., a corporation based outside Massachusetts, sells a license issued by the Federal Communications Commission (FCC) to operate wireless telecommunications services in a designated area in Massachusetts to Buyer Corp., a corporation that is based outside Massachusetts. The contract of sale is negotiated and signed outside of Massachusetts. The sale is in Massachusetts because the intangible property sold is a government license that authorizes the holder to conduct business activity solely in Massachusetts. See id.
Example 3. Same facts as in Example 2 except that Wireless Corp. sells to Buyer Corp. an FCC license to operate wireless telecommunications services in a designated area in Massachusetts and an adjacent state. Wireless Corp. must attempt to reasonably approximate the extent to which the intangible property is used in or associated with Massachusetts. For purposes of making this reasonable approximation, Wireless Corp. may rely upon credible data that identifies the percentage of persons that use wireless telecommunications in the two states covered by the license. See id.
Example 4. Same facts as in Example 3 except that Wireless Corp. is not taxable in the adjacent state in which the FCC license authorizes it to operate wireless telecommunications services. The receipts paid to Wireless Corp. that would be assigned to the adjacent state must be excluded from the numerator and denominator of Wireless Corp's sales factor. See830 CMR 63.38.1(9)(d)6.a.i.; 830 CMR 63.38.1(9)(d)1.f.ii.
Example 5. Sports League Corp., a corporation that is based outside Massachusetts, sells the rights to broadcast the sporting events played by the teams in its league in all 50 U.S. states to Network Corp. Although the games played by Sports League Corp. will be broadcast in all 50 states, the games are of greater interest in the northeast region of the country, including Massachusetts. Because the intangible property sold is a contract right that authorizes the holder to conduct a business activity in a specified geographic area, Sports League Corp. must attempt to reasonably approximate the extent to which the intangible property is used in or associated with Massachusetts. For purposes of making this reasonable approximation, Sports League Corp. may rely upon audience measurement information that identifies the percentage of the audience for its sporting events in Massachusetts and the other states. See830 CMR 63.38.1(9)(d)6.a.i.
Example 6. Same facts as in Example 5, except that Sports League Corp. is not taxable in one state. The receipts paid to Sports League Corp. that would be assigned to that state must be excluded from the numerator and denominator of Sports League Corp.'s sales factor. See830 CMR 63.38.1(9)(d)6.a.i.; 830 CMR 63.38.1(9)(d)1.f.ii.
Example 7. Business Corp., a corporation based outside Massachusetts engaged in business activities in Massachusetts and other states, enters into a covenant not to compete with Competition Corp., a corporation that is based outside Massachusetts, in exchange for a fee. The agreement requires Business Corp. to refrain from engaging in certain business activity in Massachusetts and other states. The component of the fee that constitutes a Massachusetts sale is determined by multiplying the amount of the fee by a fraction represented by the percentage of the Massachusetts population over the total population in the specified geographic region. See830 CMR 63.38.1(9)(d)6.a.ii. In any case in which a portion of the fee would be assigned to a state in which Business Corp. is not taxable, such portion shall be excluded from the numerator and denominator of Business Corp.'s sales factor. See830 CMR 63.38.1(9)(d)1.f.ii.
Example 8. Business Corp., a corporation that is commercially domiciled in Massachusetts, sells all of its assets including its business goodwill, to a business customer that is based in Massachusetts. The sale of the goodwill shall be excluded from the numerator and denominator of Business Corp.'s sales factor. See830 CMR 63.38.1(9)(d)6.a.vi.
Example 9. Inventor Corp., a corporation that is based outside Massachusetts, sells patented technology that it has developed to Buyer Corp., a business customer that is based in Massachusetts. Assume that the sale is not one in which the receipts derive from payments that are contingent on the productivity, use or disposition of the property. See830 CMR 63.38.1(9)(d)6.a.iv. Inventor Corp. understands that Buyer Corp. is likely to use the patented technology in Massachusetts, but the patented technology can be used anywhere (i.e., the rights sold are not rights that authorize the holder to conduct a business activity in a specific geographic area). The sale of the patented technology shall be excluded from the numerator and denominator of Inventor Corp.'s sales factor. See 830 CMR 63.38.1(9)(d)6.a.vi.
Corporation C has a 20% profits interest in Partnership P. C's own payroll is $1,000,000, half of which is attributable to Massachusetts employees, and P's payroll is $800,000, one quarter of which is attributable to Massachusetts employees. The denominator of C's payroll factor is $1,160,000 ($1,000,000, plus 20% of $800,000, or $160,000). The numerator of C's payroll factor is $540,000 (50% of $1,000,000 plus 25% of $160,000).
The denominator of C's sales factor is $21,000,000 determined as follows:
Sales by Corporation C | ..................................................... | 20,000,000 |
Add: Corporation C's interest | ||
(20%) in Partnership P's sales | ..................................................... | 2,000,000 |
Less: Corporation C's interest | ||
(20%) in Corporation C's sales to | ||
Partnership P | .................. 1,000,000 .................. | ................. 1,000,000 |
Denominator of sales factor | ..................................................... | 21,000,000 |
Corporation C | ................................. | 20,000,000 |
Corporation D | ...................................... | 60,000,000 |
Partnership P: | ||
To Corporation C | ..................................................... | 2,000,000 |
To Corporation D | ..................................................... | 8,000,000 |
10,000,000 |
The denominator of Corporation C's sales factor is $20,000,000 determined as follows:
Sales by Corporation C | ....................................... | 20,000,000 | |
Add: Corporation C's interest | |||
(20%) in Partnership P's sales | ....................................... | 2,000,000 | |
Less: Partnership P's sales to Corporation C | ....................................... | 2,000,000 | -0- |
The denominator of Corporation D's sales factor is $60,000,000 determined as follows:
Sales by Corporation D | ....................................... | 60,000,000 |
Add: Corporation D's interest (80%) in Partnership P's sales ¦¦¦¦¦¦ | ....................................... 8,000,000 | |
Less: Partnership P's sales to Corporation D ¦. | .........................8,000,000 | -0- |
60,000,000 |
Corporation C Corporation D | ....................................... ....................................... | 20,000,000 60,000,000 |
Partnership P: | ||
To Corporation C | ....................................... | 1,000,000 |
To Corporation D | ....................................... | 9,000,000 |
10,000,000 |
The denominator of Corporation C's sales factor is $21,000,000 determined as follows:
Sales by Corporation C | ....................................... | 20,000,000 |
Add: Corporation C's interest (20%) in Partnership P's sales | ........................ 2,000,000 | |
Less: Partnership P's sales to Corporation C | ........................1,000,000 | 1,000,000 |
Denominator of Corporation C's sales factor | ........................ | 21,000,000 |
The denominator of Corporation D's sales factor is $60,000,000 determined as follows:
Sales by Corporation D | ........................ | 60,000,000 |
Add: Corporation D's interest (80%) in Partnership P's sales | ........................ 8,000,000 | |
Less: Intercompany sales between Partnership P and Corporation D | ............... 8,000,000 1 | -0- |
Denominator of Corporation | ||
D's sales factor................ | 60,000,000 |
Corporation C | ........................ | 20,000,000 |
Corporation D | ........................ | 80,000,000 |
Partnership P: | ||
To Corporation C | .....................3,000,000 | |
To Corporation D | ..........................6,000,000 | |
To Corporation X | ...............1,000,000 | 10,000,000 |
__________________________
1 Not to exceed taxpayer's interest in Partnership P's sales.
The denominator of Corporation C's sales factor is $20,200,000 determined as follows:
Sales by Corporation C | ........................ | 20,000,000 |
Add: Corporation C's interest in Partnership P's sales to nonpartner X Corporation (20% x $1,000,000) | ........................ | 200,000 |
Corporation C's interest in Partnership P's sales to Partners (20% x $9,000,000) | ...............1,800,000 | |
Less: Intercompany sales from Partnership P to Corporation C | .............1,800,000 2 | -0- |
Denominator of Corporation C's sales factor | ........................ | 20,200,000 |
The denominator of Corporation D's sales factor is $82,000,000 determined as follows:
Sales by Corporation D | ........................ | 80,000,000 |
Add: Corporation D's interest in Partnership P's sales to nonpartner X Corporation | ||
(80% x $1,000,000) | ........................ | 800,000 |
Corporation D's interest in Partnership P's sales to Partners (80% x $9,000,000) | ........................... 7,200,000 | |
Less: Intercompany sales from Partnership P to Corporation D | .............. 6,000,000 | 82,000,000 |
_____________________________
2 Not to exceed taxpayer's interest in Partnership P's sales.
830 CMR, § 63.38.1
New Regulation Promulgated: 2/5/99
Amended: 3/31/00 - sections (12)(e)3; (14)(d)
Amended: 12/21/01 - section (9)(b)7
New Regulation Promulgated: 10/20/06
REGULATORY AUTHORITY
830 CMR 63.38.1: M.G.L. c. 14, § 6(1); M.G.L. c. 62C, § 3; M.G.L. c. 63, § 38(j),(k),(l),(m)(n).