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.

©2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.

The KPMG logo and name are trademarks of KPMG International.

KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.

The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Direct comments, including requests for subscriptions, to
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.

Share this

Share this


Current and future KPMG clients may subscribe to TaxNewsFlash email alerts.

Email your contact information.

TaxNewsFlash-United States by year