Tax News

CCH (cch.taxgroup.com) reports:

  The Massachusetts Commissioner of Revenue improperly adjusted the income of a parent corporation where the parent received fair compensation for the services which it provided to its subsidiaries, applicable to the calculation of the state's corporation excise tax. However, royalty income paid to a subsidiary for use of the company logo was properly reallocated by the Commissioner to the parent corporation since the transfer of the license agreements and purported transfer of the logo were sham transactions that had resulted in an improper assignment of income. Further, another subsidiary was entitled to abatements because it properly applied the alternative apportionment methodology that had been approved by the Commissioner and the Commissioner's adjustments to the numerator of the subsidiary's sales factor were improper.

IDC Research Inc. v. Commissioner of Revenue , Massachusetts Appellate Tax Board, Nos. C267868; C268725; C271245, April 17, 2009, ¶401-335

  Other References:

  Explanations at ¶10-520