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HOUSE . . . . . . . . No. 4104
The Commonwealth of Massachusetts
________________________________________
The committee of conference on the disagreeing votes of the two
branches with reference to the Senate amendment (striking out all after the
enacting clause and inserting in place thereof the text contained in Senate
document numbered 2406) of the House Bill to improve the
Commonwealth’s competitiveness, affordability, and equity (House, No.
3770), reports, in part, recommending passage of the accompanying bill
(House, No. 4104). September 26, 2023.
Aaron MichlewitzMichael J. RodriguesMark J. CusackSusan L. MoranMichael J. SoterBruce E. Tarr
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FILED ON: 9/26/2023
HOUSE . . . . . . . . . . . . . . . No. 4104
The Commonwealth of Massachusetts
_______________
In the One Hundred and Ninety-Third General Court
(2023-2024)
_______________
An Act to improve the Commonwealth’s competitiveness, affordability, and equity.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
of the same, as follows:
1 SECTION 1. Section 2H of chapter 29 of the General Laws, as appearing in the 2022
2Official Edition, is hereby amended by striking out, in line 29, the figure “15” and inserting in
3place thereof the following figure:- 25.5.
4 SECTION 2. Section 5K of chapter 59 of the General Laws, as so appearing, is hereby
5amended by striking out, in lines 14 and 39, the figure “$1,500” and inserting in place thereof, in
6each instance, the following figure:- $2,000.
7 SECTION 3. Said chapter 59 is hereby further amended by inserting after section 5N the
8following section:-
9 Section 5O. (a) In any city or town that accepts this section, the board of selectmen or
10select board of the town, the town council of a municipality having a town council form of
11government, the city manager, with the approval of the city council, in the case of a city with a
12plan D or plan E form of government, or the mayor, with the approval of the city council, in all 3 of 28
13other cities, may establish a property tax exemption for real property classified as Class One,
14residential in the city or town. To qualify for the exemption, the property shall be: (i) rented at an
15affordable housing rate, as determined by the city or town and in accordance with the United
16States Department of Housing and Urban Development guidance and regulations; (ii) rented on a
17yearly basis; and (iii) occupied year-round by a person or persons whose household income does
18not exceed an amount to be set by the city or town; provided, however, that said income shall not
19be more than 200 per cent of the area median income. The property tax exemption shall be for an
20amount determined by the city or town; provided, however, that the amount shall not be more
21than the tax otherwise due on the parcel based on the full and fair assessed value multiplied by
22the square footage of the housing units rented and occupied by a person or persons whose
23household income is not more than the income limit set pursuant to clause (iii), divided by the
24total square footage of a structure located on the parcel. Assessment of property seeking an
25exemption under this section, if by an income approach to value, shall assume fair market rent
26for all units. The property owner seeking the exemption shall submit to the city or town any
27documentation the city or town deems necessary, including, but not limited to, a signed lease and
28proof of the occupying person or persons’ household income, to confirm the eligibility of the
29property for the exemption under this section.
30 (b) A municipality may adopt ordinances or by-laws to implement this section.
31 SECTION 4. Section 3 of chapter 62 of the General Laws, as appearing in the 2022
32Official Edition, is hereby amended by striking out, in line 72, the figure “$3,000” and inserting
33in place thereof the following figure:- $4,000. 4 of 28
34 SECTION 5. Said section 3 of said chapter 62, as so appearing, is hereby further
35amended by striking out, in lines 121 and 122, the words “weekly or monthly transit commuter
36passes” and inserting in place thereof the following word:- fares.
37 SECTION 6. Said section 3 of said chapter 62, as so appearing, is hereby further
38amended by inserting after the word “boat”, in line 123, the following words:- , or for regional
39transit authority fares, or for bikeshare memberships, or for bicycles, including electric bicycles,
40or for bicycle improvements, repair and storage, or for any fare for a commuter boat owned,
41operated or contracted by a municipality, public or quasi-public entity, agency or authority.
42 SECTION 7. Paragraph (a) of part B of said section 3 of said chapter 62, as so appearing,
43is hereby amended by adding the following subparagraph:-
44 (20) An amount equal to the amount of student loan payment assistance received by an
45individual from their employer during the taxable year not already excluded under section 127 of
46the Code. For the purposes of this subparagraph, “student loan payment assistance” shall mean
47the payment of principal or interest on a qualified education loan, as defined in section 221 of the
48Code.
49 SECTION 8. Section 4 of said chapter 62 is hereby amended by inserting after the word
50“cent”, in line 5, as so appearing, the following words:- ; provided, however, that any gain from
51the sale or exchange of capital assets held for 1 year or less shall be taxed at the rate of 8.5 per
52cent.
53 SECTION 9. Subsection (e) of section 6 of said chapter 62, as so appearing, is hereby
54amended by striking out, in line 75, the words “one thousand five hundred dollars” and inserting
55in place thereof the following figure:- $3,000. 5 of 28
56 SECTION 10. Said subsection (e) of said section 6 of said chapter 62, as so appearing, is
57hereby further amended by striking out, in line 86, the words “five hundred dollars” and inserting
58in place thereof the following figure:- $1,000.
59 SECTION 11. Subsection (h) of said section 6 of said chapter 62, as so appearing, is
60hereby amended by striking out, in lines 245 and 250, the figure “30”, each time it appears, and
61inserting in place thereof, in each instance, the following figure:- 40.
62 SECTION 12. Subsection (i) of said section 6 of said chapter 62, as so appearing, is
63hereby amended by striking out, in line 269, the figure “40” and inserting in place thereof the
64following figure:- 60.
65 SECTION 13. Said subsection (i) of said section 6 of said chapter 62, as so appearing, is
66hereby further amended by striking out, in lines 271 and 272, the words “as promulgated by the
67department of environmental protection in 1995” and inserting in place thereof the following
68words:- of the State Environmental Code.
69 SECTION 14. Said subsection (i) of said section 6 of said chapter 62, as so appearing, is
70hereby further amended by striking out, in line 273, the figure “$15,000” and inserting in place
71thereof the following figure:- $30,000.
72 SECTION 15. Said subsection (i) of said section 6 of said chapter 62, as so appearing, is
73hereby further amended by striking out, in line 277, the figure “$1,500” and inserting in place
74thereof the following figure:- $4,000.
75 SECTION 16. Said subsection (i) of said section 6 of said chapter 62, as so appearing, is
76hereby further amended by striking out, in lines 279 to 282, inclusive, the words “$6,000. The 6 of 28
77amount of any such credit shall be reduced by an amount equal to the total interest subsidy or
78grant received from the commonwealth, whether directly or indirectly, toward the cost of said
79expenditures” and inserting in place thereof the following figure:- $18,000.
80 SECTION 17. Subsection (k) of said section 6 of said chapter 62, as so appearing, is
81hereby amended by striking out, in line 447, the figure “$750” and inserting in place thereof the
82following figure:- $1,500.
83 SECTION 18. Subsection (o) of said section 6 of said chapter 62, as so appearing, is
84hereby amended by striking out, in line 732, the figure “$6,000,000” and inserting in place
85thereof the following figure:- $8,000,000.
86 SECTION 19. Subsection (q) of said section 6 of said chapter 62, as amended by sections
87218 to 220, inclusive, of chapter 7 of the acts of 2023, is hereby further amended by striking out
88paragraph (5) and inserting in place thereof the following paragraph:-
89 (5) EOHLC may authorize not more than $30,000,000 in credits annually under this
90subsection and section 38BB of chapter 63. EOHLC may authorize annually any credits under
91this subsection or said section 38BB of said chapter 63 returned to EOHLC by a certified
92housing development project. The total amount of credits authorized during a year shall include:
93(1) credits granted during the year pursuant to this subsection or said section 38BB of said
94chapter 63; and (2) carry forwards of credits from prior years pursuant to this subsection or said
95section 38BB of said chapter 63, to the extent that such credit carry forwards are estimated by the
96commissioner to offset tax liabilities during the year. Any portion of the $30,000,000 annual cap
97not awarded by EOHLC in a calendar year shall not be applied to awards in a subsequent year.
98EOHLC shall provide the commissioner of revenue with any documentation that the 7 of 28
99commissioner deems necessary to confirm compliance with the annual cap and the commissioner
100shall provide a report confirming compliance with the annual cap to the secretary of
101administration and finance and the secretary of housing and livable communities.
102 SECTION 20. Subsection (v) of said section 6 of said chapter 62, as appearing in the
1032022 Official Edition, is hereby amended by inserting after the figure “31-33”, in line 1158, the
104following words:- or other expansion industries the secretary of labor and workforce
105development identifies as critical to a regional labor market economy.
106 SECTION 21. Said section 6 of said chapter 62 is hereby further amended by striking out
107subsections (x) and (y), as so appearing, and inserting in place thereof the following subsection:-
108 (x) For the purposes of this subsection, “maintains a household” shall have the same
109meaning as in section 21 of the Code. With respect to a taxpayer who is a non-resident for part of
110the taxable year, the credit shall be further limited to the amount of allowable credit multiplied
111by a fraction, the numerator of which shall be the number of days in the taxable year the person
112resided in the commonwealth and the denominator of which shall be the number of days in the
113taxable year. A taxpayer who maintains a household that includes as a member at least 1
114individual: (i) under the age of 13 who qualifies for exemption as a dependent under section 151
115of the Code; (ii) who is a qualifying individual as defined in said section 21 of the Code; or (iii)
116who (A) is not less than 65 years of age or is disabled and (B) qualifies as a dependent under
117section 152 of the Code, shall be allowed a credit in an amount equal to $310 for each such
118dependent or qualifying individual with respect to the taxpayer; provided, however, that if the
119taxpayer is married at the close of the taxable year, the credit provided in this subsection shall be
120allowed if: (a) the taxpayer and the taxpayer’s spouse file a joint return for the taxable year; or 8 of 28
121(b) the taxpayer qualifies as a head of household under section 2(b) of the Code. A person who is
122a non-resident for the entire taxable year shall not qualify for the credit. If the amount of the
123credit allowed under this subsection exceeds the taxpayer’s tax liability, the commissioner shall
124treat the excess as an overpayment and shall pay the taxpayer the entire amount of the excess
125without interest.
126 SECTION 22. Subsection (x) of said section 6 of said chapter 62, as appearing in section
12721, is hereby further amended by striking out the figure “$310” and inserting in place thereof the
128following figure:- $440.
129 SECTION 23. Section 6I of said chapter 62, as appearing in the 2022 Official Edition, is
130hereby amended by striking out, in line 70, the figure “$40,000,000” and inserting in place
131thereof the following figure:- $60,000,000.
132 SECTION 24. Section 6 of chapter 62C of the General Laws, as so appearing, is hereby
133amended by striking out subsection (a) and inserting in place thereof the following subsection:-
134 (a)(1) Every individual inhabitant of the commonwealth who receives or accrues during
135the taxable year Massachusetts gross income, as defined in section 2 of chapter 62, in excess of
136$8,000 shall make a return of such income.
137 Every nonresident whose Massachusetts gross income, determined in accordance with
138section 5A of chapter 62, exceeds $8,000 or the personal exemption to which such nonresident
139may be entitled under section 3 of said chapter 62, whichever is the lesser, and every partnership,
140association or trust whose federal gross income, as defined in section 1 of said chapter 62,
141exceeds $100, shall make a return of such income. 9 of 28
142 Every individual, not otherwise required to file a return under this subsection, who is a
143resident for a portion of a 12-month period beginning on the first day of a taxable year and a
144nonresident for a portion of the same 12-month period and whose Massachusetts gross income,
145as defined in section 2 of chapter 62, exceeds $8,000 shall make separate returns as a resident
146and a nonresident of his income subject to taxation under said chapter 62.
147 A husband and wife may make a single return jointly of income taxes under chapter 62,
148even though one of the spouses has neither income nor deductions, provided that their taxable
149years begin on the same day and either end on the same day or on different days solely because
150of the death of either or both. Such return shall be known as a joint return and shall include the
151income, exemptions and deductions of both spouses. Each spouse shall be jointly and severally
152liable for the entire tax.
153 (2) A married couple shall file a joint return for any year in which they file a joint federal
154income tax return. In cases where 1 spouse or both spouses are non-residents of the
155commonwealth and have items of income, exemptions or deductions unrelated to their
156Massachusetts income, the department shall provide, by regulation, for appropriate adjustments
157or for exemption from the requirement to file a joint return.
158 SECTION 25. Section 5 of chapter 62F of the General Laws, as so appearing, is hereby
159amended by adding the following subsection:-
160 (e) Monthly, the commissioner shall submit a report to the clerks of the senate and the
161house of representatives, the joint committee on revenue and the senate and house committees on
162ways and means on net state tax revenue for the current fiscal year, projections for net state tax 10 of 28
163revenue for the remainder of said fiscal year and an estimate of if, and when, net state tax
164revenue may exceed allowable state tax revenue for said fiscal year.
165 SECTION 26. The first paragraph of section 6 of said chapter 62F, as so appearing, is
166hereby amended by striking out the second sentence and inserting in place thereof the following
1673 sentences:- The credit shall be applied against the then current personal income tax liability of
168each taxpayer who files an income tax return in both the then current and the previous taxable
169year in an amount determined by dividing the total amount of excess revenues by the total
170number of taxpayers filing an income tax return in the previous taxable year. For the purposes of
171this section, a married couple filing a joint return shall be counted as 2 taxpayers. If the amount
172of the credit allowed under this section exceeds the taxpayer’s liability, the commissioner shall
173treat the excess as an overpayment and shall pay the taxpayer the amount of the excess without
174interest.
175 SECTION 27. Section 2A of chapter 63 of the General Laws, as so appearing, is hereby
176amended by striking out subsections (b) and (c) and inserting in place thereof the following 2
177subsections:-
178 (b) If the financial institution has income from business activity which is taxable both
179within and without the commonwealth, its net income shall be apportioned to the commonwealth
180by multiplying its net income by its receipts factor. If the receipts factor is missing, the whole of
181the financial institution’s net income shall be taxable pursuant to section 2. The receipts factor
182shall be missing if both its numerator and denominator are zero, but it shall not be missing
183merely because its numerator is zero. 11 of 28
184 (c) The receipts factor shall be computed according to the method of accounting, cash or
185accrual basis, used by the taxpayer for federal income tax purposes for the taxable year.
186 SECTION 28. Subsection (d) of said section 2A of said chapter 63, as so appearing, is
187hereby amended by striking out paragraph (xii) and inserting in place thereof the following
188paragraph:-
189 (xii)(A) Interest, dividends, net gains, but not less than zero, and other income from
190investment assets and activities and from trading assets and activities shall be included in the
191receipts factor. Investment assets and activities and trading assets and activities include but are
192not limited to: investment securities; trading account assets; federal funds; securities purchased
193and sold under agreements to resell or repurchase; options; futures contracts; forward contracts;
194notional principal contracts such as swaps; equities; and foreign currency transactions. With
195respect to the investment and trading assets and activities described in clauses (1) and (2), the
196receipts factor shall include the amounts described in said clauses (1) and (2).
197 (1) The receipts factor shall include the amount by which interest from federal funds sold
198and securities purchased under resale agreements exceeds interest expense on federal funds
199purchased and securities sold under repurchase agreements.
200 (2) The receipts factor shall include the amount by which interest, dividends, gains and
201other income from trading assets and activities, including, but not limited to, assets and activities
202in the matched book, in the arbitrage book and foreign currency transactions, exceed amounts
203paid in lieu of interest, amounts paid in lieu of dividends, and losses from such assets and
204activities. 12 of 28
205 (B) The amount of interest, dividends, net gains, but not less than zero, and other income
206from investment assets and activities and from trading assets and activities to be attributed to the
207commonwealth and included in the numerator shall be determined by multiplying all such
208income from such assets and activities by a fraction, the numerator of which shall be the total
209receipts included in the numerator pursuant to paragraphs (i) through (x), inclusive, and
210paragraph (xii) and the denominator of which shall be all total receipts of the taxpayer included
211in the denominator other than interest, dividends, net gains, but not less than zero, and other
212income from investment assets and activities and from trading assets and activities.
213 SECTION 29. Said section 2A of said chapter 63, as so appearing, is hereby further
214amended by striking out subsections (e) to (g), inclusive, and inserting in place thereof the
215following subsection:-
216 (e) If the provisions of subsections (a) to (d), inclusive, are not reasonably adapted to
217approximate the net income derived from business carried on within the commonwealth, a
218financial institution may apply to the commissioner, or the commissioner may require the
219financial institution, to have its income derived from business carried on within the
220commonwealth determined by a method other than that set forth in subsections (a) to (d),
221inclusive. Such application shall be made by attaching to its duly-filed return a statement of the
222reasons why the financial institution believes that subsections (a) to (d), inclusive, are not
223reasonably adapted to approximate its net income derived from business carried on within the
224commonwealth and a description of the method sought by it. A financial institution which so
225applies shall, upon receipt of a request therefor from the commissioner, file with the
226commissioner, under oath of its treasurer, a statement of such additional information as the
227commissioner may require. 13 of 28
228 If, after such application by the financial institution, or after the commissioner’s own
229review, the commissioner determines that the provisions of subsections (a) to (d), inclusive, are
230not reasonably adapted to approximate the financial institution’s net income derived from
231business carried on within the commonwealth, the commissioner shall by reasonable methods
232determine the amount of net income derived from business activity carried on within the
233commonwealth. The amount thus determined shall be the net income taxable under section 2 and
234the foregoing determination shall be in lieu of the determination required by subsections (a) to
235(d), inclusive. If an alternative method is used by the commissioner hereunder, the
236commissioner, in their discretion, with respect to the 2 next succeeding taxable years, may
237require similar information from such financial institution if it shall appear that the provisions of
238subsections (a) to (d), inclusive, are not reasonably adapted to approximate for the applicable
239year the financial institution’s net income derived from business carried on within the
240commonwealth and may again by reasonable methods determine such income.
241 SECTION 30. Section 31H of said chapter 63, as so appearing, is hereby amended by
242striking out, in line 71, the figure “$40,000,000” and inserting in place thereof the following
243figure:- $60,000,000.
244 SECTION 31. Said chapter 63 is hereby further amended by striking out section 38, as so
245appearing, and inserting in place thereof the following section:-
246 Section 38. The commissioner shall determine the part of the net income of a business
247corporation derived from business carried on within the commonwealth as follows:
248 (a) Net income, as defined in section 30, adjusted as follows shall constitute taxable net
249income: 14 of 28
250 (1) 95 per cent of dividends, exclusive of distributions in liquidation, included therein
251shall be deducted other than dividends from or on account of the ownership of:
252 (i) shares in a corporate trust, as defined in section 1 of chapter 62, to the extent such
253dividends represent tax-free earnings and profits, as defined in section 8 of said chapter 62, as in
254effect on December 31, 2008;
255 (ii) deemed distributions and actual distributions, except actual distributions out of
256previously taxed income, from a domestic international sales corporation, as defined in 26 U.S.C.
257§ 992, which is not a wholly owned domestic international sales corporation; or
258 (iii) any class of stock, if the corporation owns less than 15 per cent of the voting stock of
259the corporation paying such dividend.
260 (2) Long-term capital gains realized and long-term capital losses sustained from the sale
261or exchange of intangible property affected under the provisions of the Federal Internal Revenue
262Code, as amended, and in effect for taxable years that ended on or before December 31, 1962,
263shall not be included in any part therein.
264 (b) If the corporation does not have income from business activity which is taxable in
265another state, the whole of its taxable net income, determined pursuant to subsection (a), shall be
266allocated to the commonwealth. For purposes of this section, a corporation is taxable in another
267state if: (1) in that state such corporation is subject to a net income tax, a franchise tax measured
268by net income, a franchise tax for the privilege of doing business or a corporate stock tax; or (2)
269that state has jurisdiction to subject such corporation to a net income tax regardless of whether,
270in fact, the state does or does not. Notwithstanding any other provision of this section, the
271portion of the taxable net income of a corporation that a non-domiciliary state is prohibited from 15 of 28
272taxing under the Constitution of the United States shall be allocated in full to the commonwealth
273if the commercial domicile of the corporation is in the commonwealth.
274 (c) If a corporation has income from business activity which is taxable both within and
275without the commonwealth, its taxable net income, as determined pursuant to subsection (a),
276shall be apportioned to the commonwealth by multiplying such taxable net income by the sales
277factor.
278 (d) The sales factor is a fraction, the numerator of which is the total sales of the
279corporation in the commonwealth during the taxable year, and the denominator of which is the
280total sales of the corporation everywhere during the taxable year.
281 As used in this section, unless specifically stated otherwise, “sales” shall mean all gross
282receipts of the corporation, including deemed receipts from transactions treated as sales or
283exchanges under the Code, except interest, dividends and gross receipts from the maturity,
284redemption, sale, exchange or other disposition of securities; provided, however, that “sales”
285shall not include gross receipts from transactions or activities to the extent that a non-domiciliary
286state would be prohibited from taxing the income from such transactions or activities under the
287Constitution of the United States.
288 (e) Sales of tangible personal property are in the commonwealth for purposes of this
289section if: (1) the property is delivered or shipped to a purchaser within the commonwealth
290regardless of the f.o.b. point or other conditions of the sale; or (2) the corporation is not taxable
291in the state of the purchaser and the property was not sold by an agent or agencies chiefly
292situated at, connected with or sent out from premises for the transaction of business owned or 16 of 28
293rented by the corporation outside the commonwealth. “Purchaser”, as used in clauses (1) and (2)
294shall include the United States government.
295 (f) Sales, other than sales of tangible personal property, are in the commonwealth for
296purposes of this section if the corporation’s market for the sale is in the commonwealth. The
297corporation’s market for a sale is in the commonwealth and the sale is thus assigned to the
298commonwealth for the purpose of this section:
299 (1) in the case of sale, rental, lease or license of real property, if and to the extent the
300property is located in the commonwealth;
301 (2) in the case of rental, lease or license of tangible personal property, if and to the extent
302the property is located in the commonwealth;
303 (3) in the case of sale of a service, if and to the extent the service is delivered to a
304location in the commonwealth;
305 (4) in the case of lease or license of intangible property, including a sale or exchange of
306such property where the receipts from the sale or exchange derive from payments that are
307contingent on the productivity, use or disposition of the property, if and to the extent the
308intangible property is used in the commonwealth; and
309 (5) in the case of the sale of intangible property, other than as provided in clause (4),
310where the property sold is a contract right, government license or similar intangible property that
311authorizes the holder to conduct a business activity in a specific geographic area, if and to the
312extent that the intangible property is used in or otherwise associated with the commonwealth; 17 of 28
313provided, however, that any sale of intangible property, not otherwise described in this clause or
314clause (4), shall be excluded from the numerator and the denominator of the sales factor.
315 (g) If the sales factor is missing, the whole of the corporation’s net income shall be
316taxable net income allocated to the commonwealth. The sales factor shall be missing if both its
317numerator and denominator are zero, but it shall not be missing merely because its numerator is
318zero.
319 (h) For the purposes of this section:
320 (1) in the case of sales, other than sales of tangible personal property, if the state or states
321to which sales should be assigned cannot be determined, it shall be reasonably approximated;
322 (2) in the case of sales other than sales of tangible personal property if the taxpayer is not
323taxable in a state to which a sale is assigned, or if the state or states to which such sales should be
324assigned cannot be determined or reasonably approximated, such sale shall be excluded from the
325numerator and denominator of the sales factor;
326 (3) the corporation shall be considered to be taxable in the state of the purchaser if
327tangible personal property is delivered or shipped to a purchaser in a foreign country;
328 (4) sales of tangible personal property to the United States government or any agency or
329instrumentality thereof for purposes of resale to a foreign government or any agency or
330instrumentality thereof are not sales made in the commonwealth;
331 (5) in the case of sale, exchange or other disposition of a capital asset, as defined in
332paragraph (m) of section 1 of chapter 62, used in a taxpayer’s trade or business, including a 18 of 28
333deemed sale or exchange of such asset, “sales” shall be measured by the gain from the
334transaction;
335 (6) “security” shall mean any interest or instrument commonly treated as a security as
336well as other instruments which are customarily sold in the open market or on a recognized
337exchange, including, but not limited to, transferable shares of a beneficial interest in any
338corporation or other entity, bonds, debentures, notes and other evidences of indebtedness,
339accounts receivable and notes receivable, cash and cash equivalents including foreign currencies
340and repurchase and futures contracts;
341 (7) in the case of a sale or deemed sale of a business, “sales” shall not include receipts
342from the sale of the business “goodwill” or similar intangible value, including, without
343limitation, “going concern value” and “workforce in place”;
344 (8) in the case of a business deriving receipts from operating a gaming establishment or
345otherwise deriving receipts from conducting a wagering business or activity, income-producing
346activity shall be considered to be performed in the commonwealth to the extent that the location
347of wagering transactions or activities that generated the receipts is in the commonwealth;
348 (9) in the case of a business deriving receipts from operating a marijuana establishment or
349otherwise deriving receipts from conducting a marijuana business or activity, income-producing
350activity shall be considered to be performed in the commonwealth to the extent that the location
351of marijuana transactions or activities that generated the receipts is in the commonwealth; and
352 (10) dividends that are deemed to be received from an entity, including amounts included
353in federal gross income pursuant to sections 951 or 951A of the Code, shall not be considered
354“sales”. 19 of 28
355 (i)(1) As used in this subsection, the following words shall, unless the context requires
356otherwise, have the following meanings:
357 “Administration services”, include, but are not limited to, clerical, fund or shareholder
358accounting, participant record keeping, transfer agency, bookkeeping, data processing, custodial,
359internal auditing, legal and tax services performed for a regulated investment company, but only
360if the provider of such service or services during the taxable year in which such service or
361services are provided also provides or is affiliated with a person that provides management or
362distribution services to any regulated investment company.
363 “Affiliated person”, the meaning as set forth in 15 USC section 80a-2(a)(3)(C), as may be
364amended from time to time.
365 “Distribution services”, include, but are not limited to, the services of advertising,
366servicing, marketing or selling shares of a regulated investment company, but, in the case of
367advertising, servicing or marketing shares, only where such service is performed by a person
368who is, or in the case of a close end company, was, either engaged in the services of selling
369regulated investment company shares or affiliated with a person that is engaged in the service of
370selling regulated investment company shares. In the case of an open end company, such service
371of selling shares shall be performed pursuant to a contract entered into pursuant to 15 USC
372section 80a-15(b), as from time to time amended.
373 “Domicile”, presumptively the shareholder’s mailing address on the records of the
374regulated investment company. If, however, the regulated investment company or the
375corporation has actual knowledge that the shareholder’s primary residence or principal place of
376business is different than the shareholder’s mailing address said presumption shall not control. If 20 of 28
377the shareholder of record is a company which holds the shares of the regulated investment
378company as depositor for the benefit of a separate account, then the shareholder shall be the
379contract owners or policyholders of the contracts or policies supported by the separate account,
380and it shall be presumed that the domicile of said shareholder is the contract owner’s or
381policyholder’s mailing address to the extent that the company maintains such mailing addresses
382in the regular course of business. If the regulated investment company or the corporation has
383actual knowledge that the shareholder’s principal place of business is different than the
384shareholder’s mailing address said presumption shall not control.
385 “Management services”, include, but shall not necessarily be limited to, the rendering of
386investment advice directly or indirectly to a regulated investment company, making
387determinations as to when sales and purchases of securities are to be made on behalf of the
388regulated investment company, or the selling or purchasing of securities constituting assets of a
389regulated investment company, and related activities, but only where such activity or activities
390are performed: (i) pursuant to a contract with the regulated investment company entered into
391pursuant to 15 USC section 80a-15(a), as amended; (ii) for a person that has entered into such
392contract with the regulated investment company; or (iii) for a person that is affiliated with a
393person that has entered into such contract with a regulated investment company.
394 “Mutual fund sales”, taxable net income derived within the taxable year directly or
395indirectly from the rendering of management, distribution or administration services to a
396regulated investment company, including net income received directly or indirectly from
397trustees, sponsors and participants of employee benefit plans, which have accounts in a regulated
398investment company. 21 of 28
399 “Regulated investment company”, the meaning as set forth in section 851 of the Code.
400 (2) Mutual fund sales, other than the sale of tangible personal property, shall be assigned
401to the commonwealth to the extent that shareholders of the regulated investment company are
402domiciled in the commonwealth as follows:
403 (i) By multiplying the taxpayer’s total dollar amount of sales of such services on behalf
404of each regulated investment company by a fraction, the numerator of which shall be the average
405of the number of shares owned by the regulated investment company’s shareholders domiciled in
406the commonwealth at the beginning of and at the end of the regulated investment company’s
407taxable year that ends with or within the taxpayer’s taxable year and the denominator of which
408shall be the average of the number of shares owned by the regulated investment company
409shareholders everywhere at the beginning of and at the end of the regulated investment
410company’s taxable year that ends with or within the taxpayer’s taxable year.
411 (ii) A separate computation shall be made to determine the sale for each regulated
412investment company, the sum of which shall equal the total sales assigned to the commonwealth.
413 (3) Nothing in this subsection shall limit the commissioner’s authority under subsection
414(k).
415 (j) If a corporation maintains an office, warehouse or other place of business in a state
416other than the commonwealth for the purpose of reducing its tax under this chapter, the
417commissioner shall, in determining the amount of taxable net income apportionable to the
418commonwealth, adjust the sales factor to properly reflect the amount which the factor ought
419reasonably to assign to the commonwealth. 22 of 28
420 (k) If the apportionment provisions of this section are not reasonably adapted to
421approximate the net income derived from business carried on within the commonwealth by any
422type of industry group, the commissioner may, by regulation, adopt alternative apportionment
423provisions to be applied to such an industry group in lieu of the foregoing provisions.
424 (l) In any case in which a purchasing corporation makes an election under section 338 of
425the Code, the target corporation shall be treated as having sold its assets for purposes of this
426section.
427 (m) The commissioner shall adopt regulations to implement subsections (d) to (i),
428inclusive.
429 SECTION 32. Section 38Z of said chapter 63, as so appearing, is hereby amended by
430striking out, in line 28, the figure “$6,000,000” and inserting in place thereof the following
431figure:- $8,000,000.
432 SECTION 33. Section 38BB of said chapter 63 is hereby amended by striking out
433subdivision (5), as amended by sections 231 and 232 of chapter 7 of the acts of 2023, and
434inserting in place thereof the following subdivision:-
435 (5) EOHLC may authorize up to $30,000,000 in credits annually under this section and
436subsection (q) of section 6 of chapter 62. EOHLC may authorize annually any credits under this
437section or said subsection (q) of said section 6 of said chapter 62 returned to EOHLC by a
438certified housing development project. The total amount of credits authorized during a year shall
439include: (1) credits granted during the year under this section or said subsection (q) of section 6
440of chapter 62; and (2) carry forwards of credits from prior years under this section or said
441subsection (q) of section 6 of chapter 62, to the extent that such credit carry forwards are 23 of 28
442estimated by the commissioner of revenue to offset tax liabilities during the year. Any portion of
443the $30,000,000 annual cap not awarded by EOHLC in a calendar year shall not be applied to
444awards in a subsequent year. EOHLC shall provide the commissioner of revenue with any
445documentation that the commissioner deems necessary to confirm compliance with the annual
446cap and the commissioner shall provide a report confirming compliance with the annual cap to
447the secretary of administration and finance and the secretary of housing and livable communities.
448 SECTION 34. Section 38HH of said chapter 63, as appearing in the 2022 Official
449Edition, is hereby amended by inserting after the figure “31-33”, in line 18, the following
450words:- or other expansion industries the secretary of labor and workforce development
451identifies as critical to a regional labor market economy.
452 SECTION 35. Section 42B of said chapter 63, as so appearing, is hereby amended by
453adding the following subsection:-
454 (e) For the purposes of this section, a “manufacturing corporation” shall be a corporation
455that is engaged in manufacturing; provided, however, that in order to be engaged in
456manufacturing, the corporation shall be engaged, in substantial part, in transforming raw or
457finished physical materials by hand or machinery, and through human skill and knowledge, into
458a new product possessing a new name, nature and adapted to a new use.
459 Any operation manufacturing, in substantial part, value-added agricultural products shall
460be considered a manufacturing corporation.
461 A manufacturing corporation’s activities will be considered to be substantial if any 1 of
462the following 5 tests are met: 24 of 28
463 (1) 25 per cent or more of its gross receipts are derived from the sale of manufactured
464goods that it manufactures;
465 (2) 25 per cent or more of its payroll is paid to employees working in its manufacturing
466operations and 15 per cent or more of its gross receipts are derived from the sale of manufactured
467goods that it manufactures;
468 (3) 25 per cent or more of its tangible property is used in its manufacturing operations
469and 15 per cent or more of its gross receipts are derived from the sale of manufactured goods that
470it manufactures;
471 (4) 35 per cent or more of its tangible property is used in its manufacturing operations; or
472 (5) the corporation’s manufacturing activities are deemed substantial under relevant
473regulations promulgated by the commissioner.
474 In determining whether a process constitutes manufacturing, the commissioner will
475examine the facts and circumstances of each case.
476 SECTION 36. Section 2A of chapter 65C of the General Laws, as so appearing, is hereby
477amended by striking out subsection (a) and inserting in place thereof the following subsection:-
478 (a) A tax is hereby imposed upon the transfer of the estate of each person dying on or
479after January 1, 1997 who, at the time of death, was a resident of the commonwealth. The
480amount of the tax shall be equal to the credit for state death taxes that would have been allowable
481to a decedent’s estate as computed under section 2011 of the Code, as in effect on December 31,
4822000, hereinafter referred to as the “credit”. If the federal gross estate of a person includes real or
483tangible personal property located outside of the commonwealth at the time of death, the tax 25 of 28
484shall be reduced by an amount equal to the proportion of such allowable credit as the value of
485such real or tangible personal property located outside of the commonwealth bears to the value
486of the entire federal gross estate wherever situated, as determined under section 2011 of the
487Code, as in effect on December 31, 2000.
488 SECTION 37. Said section 2A of said chapter 65C, as so appearing, is hereby further
489amended by adding the following 2 subsections:-
490 (f) For the estates of decedents dying on or after January 1, 2023, a credit shall be
491allowed against the tax imposed by subsections (a) and (b) equal to the amount of such tax;
492provided, however, that the credit shall not exceed $99,600.
493 (g) The estates of decedents dying on or after January 1, 2023 shall not be required to pay
494any tax under subsections (a) and (b) if the value of the federal taxable estate is not more than
495$2,000,000.
496 SECTION 38. Section 21 of chapter 138 of the General Laws, as so appearing, is hereby
497amended by striking out, in lines 20 and 21, the words “six per cent of alcohol by weight” and
498inserting in place thereof the following words:- 8½ per cent of alcohol by volume.
499 SECTION 39. Said section 21 of said chapter 138, as so appearing, is hereby further
500amended by striking out, in line 25, the word “six” and inserting in place thereof the following
501figure:- 8 ½.
502 SECTION 40. Sections 46, 48, 61, 63 and 124A of chapter 287 of the acts of 2014 are
503hereby repealed. 26 of 28
504 SECTION 41. Chapter 358 of the acts of 2020 is hereby amended by striking out sections
50559, 61 and 112.
506 SECTION 42. Notwithstanding any general or special law to the contrary, in calendar
507year 2023, the executive office of housing and livable communities may authorize not more than
508$57,000,000 in credits under subsection (q) of section 6 of chapter 62 of the General Laws and
509section 38BB of chapter 63 of the General Laws. Any portion of this amount that is not
510authorized in calendar year 2023 shall be added to the amount the executive office of housing
511and livable communities may authorize in subsequent years under said subsection (q) of said
512section (6) of said chapter 62 and said section 38BB of said chapter 63.
513 SECTION 43. The executive office for administration and finance shall conduct a study
514on the feasibility of creating a program of advance quarterly payments to taxpayers for credits
515that the department of revenue estimates would be treated as allowed for a taxpayer under
516subsection (x) of section 6 of chapter 62 of the General Laws for a taxable year. The study shall
517include, but not be limited to: (i) an operational plan for how the department of revenue could
518establish and maintain such a program; (ii) a description of the processes by which the
519department could collect information from taxpayers and from other agencies to maximize the
520accuracy of the department’s estimate of the amount that would be treated as allowed for a
521taxpayer under said subsection (x) of said section 6 of said chapter 62 for a taxable year; (iii) a
522description of the options for maximizing participation in such a program by taxpayers who are
523eligible for credits under said subsection (x) of said section 6 of said chapter 62; (iv) an analysis
524of any other credits against tax included in said section 6 of said chapter 62 that the department
525could include in an advance quarterly payment program; (v) potential challenges to the
526establishment of such a program and strategies by which the department could address those 27 of 28
527challenges; (vi) any legislative recommendations to support the establishment of such a program,
528if applicable; and (vii) an estimate of the funds that would be necessary for the department to
529establish and maintain such a program, if applicable.
530 The executive office shall submit a report of its findings to the house and senate
531committees on ways and means not later than January 1, 2024.
532 SECTION 44. (a) Notwithstanding any general or special law to the contrary, the
533department of revenue shall analyze the potential impact of implementing an additional, elective
534entity-level tax of up to 4 per cent on a portion of qualified taxable income in the commonwealth
535of eligible pass-through entities defined in section 1 of chapter 63D of the General Laws,
536coupled with a refundable tax credit. The analysis shall consider: (i) the impacts on the
537commonwealth’s taxpayers and tax revenue; (ii) the feasibility of administering the additional
538elective tax; (iii) the feasibility of determining the portion of qualified income taxable in the
539commonwealth pursuant to this section based on: (A) an annual threshold tied to the threshold
540under Article XLIV of the Amendments of the Constitution; or (B) the consent of each qualified
541member to have a portion of the member’s share of qualified income taxable in the
542commonwealth subject to the additional tax; (iv) passthrough entity tax regimes in other states;
543and (v) the impact of any tax on qualified members with taxable income below the annual
544threshold under said Article XLIV.
545 (b) The department of revenue shall submit a report of its findings to the clerks of the
546senate and house of representatives, the joint committee on revenue and the senate and house
547committees on ways and means not later than February 1, 2024.
548 SECTION 45. Sections 19, 22 and 33 shall take effect on January 1, 2024. 28 of 28
549 SECTION 46. Section 24 shall apply to tax years beginning on or after January 1, 2024.
550 SECTION 47. Sections 27 to 29, inclusive, and sections 31 and 35 shall take effect on
551January 1, 2025.
552 SECTION 48. Sections 36 and 37 shall take effect for the estates of decedents dying on
553or after January 1, 2023.
554 SECTION 49. Except as otherwise specified, this act shall take effect for taxable years
555beginning on or after January 1, 2023.