The Reed Smith State Tax Group’s Massachusetts tax practice assists clients by combining significant experience in handling cutting-edge Massachusetts corporate tax matters, with a commitment to obtaining unpublished documents that give us an inside view into the current state of Massachusetts tax law.
Our team has broad experience handling various Massachusetts tax controversy matters. Our goal is to find the solution that best meets our clients’ needs, whether it is requesting a private letter ruling, negotiating a voluntary disclosure, assisting with an audit, participating in the early mediation program, or, when necessary, representing clients in litigation.
Here is a brief summary of a few of the Massachusetts issues and opportunities we are working on for our clients:
Corporate Excise Tax Matters
- Represented national telecommunications service provider in a series of corporate excise tax appeals involving utility corporation classifications, classification of intercompany obligations as true debt, and non-apportionable income.
- Represented Fortune 500 IT services company in appeals involving cost of performance sourcing, and calculation of research and investment tax credits.
- Challenged corporate excise tax assessments resulting from the Department’s disregard of the separate existence of several out-of-state subsidiaries of an in-state financial institution.
- Advised a Fortune 50 financial institution challenging corporate excise tax assessments involving add-back of interest expense paid to affiliated entities; SINAA sourcing of loans; exclusion of mark-to-market gains from income; and disregard of the separate existence of out-of-state subsidiaries.
- Represented a national petroleum company in a multimillion-dollar, multi-year corporate excise tax transfer-pricing adjustment.
- Represented a national media and advertising company in appealing a corporate excise tax assessment resulting from various attacks on the company’s corporate structure, including interest expense disallowance, recharacterization of debt to equity, elimination of “insignificant” apportionment factors, and the disregard for the separate existence of certain corporate entities.
- Represented a Fortune 500 company in a multi-year corporate excise tax audit and Appellate Tax Board appeal involving the add-back of royalties and interest paid to affiliated entities, and other issues.
- Represented a taxpayer in an appeal regarding the proper sourcing of receipts from the sale of vehicle service agreements under Massachusetts’ cost-of-performance provision.
- Represented an out-of-state taxpayer in an appeal involving whether gain from the sale of a partnership interest should be characterized as apportionable income for purposes of the corporate excise tax.
Sales Tax Matters
- Represented a national retailer in challenging an assessment of Massachusetts’ use tax on sales to Massachusetts residents made at the retailer’s stores located outside of Massachusetts.
- Represented a national telecommunications service provider in challenging sales tax assessments involving proper application of Massachusetts’ tax exemption for residential phone service, and deduction for bad debts.
- Represented a Fortune 500 company in a successful mediation of a multi-year corporate excise tax audit involving transfer pricing adjustments to management fees paid to affiliated entities, and the add-back of and interest paid to affiliated entities.
Voluntary Disclosure/Closing Agreements
- Represented several clients seeking to voluntarily disclose tax, interest and penalties due for income, sales and use, and telecommunications taxes.
- Successfully negotiated closing agreements for taxpayers not qualifying for voluntary disclosure program, who nonetheless desired to voluntarily disclose tax, penalty and interest due.
Massachusetts State Tax Intelligence
Our focus is always on achieving the best result for our clients in an efficient and low-profile manner. This starts with our commitment to identifying new issues and unpublished Department of Revenue positions. Our team devotes significant resources to develop and maintain a Massachusetts unpublished document database—giving us an inside look into the Department’s audit policies, implementation of new tax legislation and other regulatory developments, as well as all ongoing litigation pending at the Appellate Tax Board. With this information, we can advise our clients on planning around tax traps, or taking advantage of hidden opportunities to minimize their taxable exposure.