Massachusetts - New tax law includes market-based sourcing rule; utility classification repeal; sales tax changes for computer systems 

July 26:  Massachusetts lawmakers on July 24, 2013, overrode Governor Patrick’s veto of H. 3535. The governor vetoed the bill on July 19 because of concerns that it did not raise sufficient revenue to cover transportation expenditures in light of anticipated toll repeal.

The legislation includes an estimated $500 million in tax increases earmarked to fund transportation and infrastructure improvements.


As enacted, the bill contains a number of changes to the corporate income and sales and use taxes, including:


  • Market-based sourcing and “throwout rules”
  • Repeal of the utility corporation classification
  • Delay of the FAS 109 deduction
  • Sales and use tax changes for computer systems design services tax
  • Gasoline and tobacco tax increases

Read a July 2013 report [PDF 226 KB] prepared by KPMG LLP.




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