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Rhode Island Adopts Corporate Tax Changes
Posted by Tarra Curran on Thu, Mar 24, 2016 @ 07:30 AM

Updated guidance on corporate nexus, combined reporting, and market-based sourcing

Rhode Island recently enacted changes to corporate tax requirements that include updated guidance for corporate nexus, combined reporting, single sales factor apportionment and market-based sourcing.

Business Corporation Tax Corporate Nexus Regulation CT 15-02 (CT 15-02) provides enhanced guidance about which activities make a foreign corporate entity subject to Rhode Island income tax. Business Corporation Tax Apportionment of Net Income Regulation CT 15-04 (CT 15-04) makes changes to corporate tax reporting along the lines of the rules adopted for years 2009 and later by Massachusetts and those recently enacted by Connecticut. They are also similar to the market-based sourcing changes enacted by Massachusetts in 2015 and New York in 2016. Rhode Island’s adjustments, however, are more stringent than the changes adopted by Massachusetts and generally allow for fewer exemptions.

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Topics: Tarra Curran, Market-Based Sourcing, economic nexus, corproate nexus, nexus, combined reporting

New Market-Based Sourcing Rules May Significantly Impact Architecture and Engineering Firms
Posted by Tarra Curran on Mon, May 19, 2014 @ 09:02 AM

Authors: Tarra Curran, CPA, MST and Dave Swan, CPA

Last July Massachusetts’ lawmakers voted to switch the rules for sourcing sales of services in its income apportionment formula, moving from a statutory “cost of performance” method to a “market-sourcing” approach. Architecture and engineering firms have been using the cost of performance method for quite some time so this rules change represents a significant change in how they will apportion their income.

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Topics: David Swan, Tarra Curran, Market-Based Sourcing in Massachusetts, Market-Based Sourcing

DOR Releases Guidance on Market-Based Sourcing
Posted by Tarra Curran on Tue, Apr 15, 2014 @ 05:42 PM

In July 2013 Massachusetts lawmakers voted to switch the rules for sourcing sales of services in its income apportionment formula, moving from a statutory “cost of performance” method to a “market-sourcing” approach. The Massachusetts Department of Revenue (DOR) predicts that the new law will generate up to $37 million annually. In addition to increasing revenue, the new rules are intended – at least in part – to eliminate the many disputes between DOR and taxpayers regarding interpretation of the old cost of performance rules. 

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Topics: Tarra Curran, Market-Based Sourcing in Massachusetts, Market-Based Sourcing, The Massachusetts Department of Revenue, DOR

Market-Based Sourcing Rules Increase Tax Burden on Out-of-State Service Providers; Allow Massachusetts to Generate Increased Revenue
Posted by Tarra Curran on Mon, Mar 17, 2014 @ 09:11 AM

On July 26, 2013 Massachusetts lawmakers voted to override Gov. Deval Patrick’s veto of a proposed transportation finance bill (H. 3535) – legislation intended to remedy some of the Commonwealth’s most pressing MBTA, road and bridge problems, and limit MBTA fare increases.

Several new taxes were proposed to pay for the transportation improvements, including a controversial portion of the Act that imposed sales tax on computer software and services. While that proposal was repealed by subsequent legislation, approved was a mandate for Massachusetts businesses to move to market-based sourcing.

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Topics: Tarra Curran, Market-Based Sourcing, Throw-Out Rule

Massachusetts Enacts Sales and Use Tax on Computer Services, and Market-Based Sourcing
Posted by Claudia Mullen on Wed, Aug 7, 2013 @ 07:06 AM

Attention businesses in Massachusetts: You are likely to pay more in sales and use taxes due to the Commonwealth’s newly passed finance law.

Massachusetts lawmakers voted on July 26, 2013 to override Gov. Deval Patrick’s veto of a proposed transportation finance bill (H. 3535). The newly passed legislation – which earmarks about $800 million per year to transportation needs – is intended to remedy some of the Commonwealth’s most pressing MBTA, road and bridge problems, and limit MBTA fare increases to 5 percent each year. (In 2012, MBTA fares rose 23 percent.)

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Topics: Market-Based Sourcing in Massachusetts, Market-Based Sourcing, Massachusetts, computer and software services, Claudia Mullen, Sales Tax, sales sourcing, sales and use tax

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