Massachusetts ATB Finds that Indiana Utility Receipts Tax Not a Deductible Transaction Tax for Massachusetts Corporate Excise Tax
Posted on Jan 30, 2019 in State and Local Tax
The Massachusetts Appellate Tax Board disallowed a deduction for Indiana utility receipts tax (URT) paid by a natural gas distribution operator with operations in Indiana. The deduction for the URT was disallowed, for purposes of computing Massachusetts net income for corporate excise tax, because the URT is not a deductible “transaction tax.” The Board found that while the URT may have some characteristics of a transaction tax, on balance the URT is more akin to the types of income and franchise taxes that must be added back to net income under the Massachusetts statute. Bay State Gas Co. v. Comm’r of Revenue, Dkt. No. C332071 (Mass. App. Tax Bd. Oct. 23, 2018).