SECTION 1. Chapter 62C of the General Laws, as appearing in the 2010 Official Edition, is hereby amended by deleting Section 3A and replacing it with the following new section:-
In applying the laws referred to in section 2, the commissioner may, in his discretion, disallow the asserted tax consequences of a transaction by asserting the application of the sham transaction doctrine or any other related tax doctrine, in which case the taxpayer shall have the burden of demonstrating by a preponderance of the evidence as determined by the commissioner that the transaction met both of the following tests: (i) the transaction changes in a meaningful way (apart from state income tax consequences) the taxpayer’s economic position, and (ii) the taxpayer has a substantial non-state-tax purpose for entering into such transaction. Nothing in this section shall be construed to limit or negate the commissioner’s authority to make tax adjustments as otherwise permitted by law.
SECTION 2. Section 1 is effective for tax years beginning on or after January 1, 2013.
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