SENATE DOCKET, NO. 105        FILED ON: 1/9/2019

SENATE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 1727

The Commonwealth of Massachusetts

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PRESENTED BY:

Michael O. Moore

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To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:

The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:

An Act to clarify the net-worth measure of the corporate excise.

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PETITION OF:

SENATE DOCKET, NO. 105        FILED ON: 1/9/2019

SENATE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 1727

[SIMILAR MATTER FILED IN PREVIOUS SESSION
SEE SENATE, NO. 1581 OF 2017-2018.]

The Commonwealth of Massachusetts

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In the One Hundred and Ninety-First General Court
(2019-2020)

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An Act to clarify the net-worth measure of the corporate excise.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
 

SECTION 1. Paragraph 8 of Section 30 of Chapter 63 of the General Laws, as appearing in the 2016 Official Edition, is hereby amended by striking out the last sentence and inserting in place thereof the following sentence:-

In determining whether an item shown on the books of a corporation is to be treated as reflecting debt or equity, the taxpayer’s treatment of the item for accounting purposes shall be considered to be controlling, unless the commissioner establishes that such treatment is not in accordance with the accounting standards used by that taxpayer for making financial reports to shareholders, such as, without limitation, generally accepted accounting principles or International Financial Reporting Standards; and in determining the book value of any asset, the commissioner may disallow any reserve, in whole or in part, established with respect thereto which, in his judgment, is not reasonable and proper.

SECTION 2: Section 38(f) of Chapter 63 of the General Laws, as so appearing, is hereby amended by inserting after the word “include”, in line 138, the following words:-

an item of income of a corporation that is organized outside of the United States to the extent that such item is exempt from United States federal income tax either by virtue of a federal income tax treaty or otherwise, or.

SECTION 3. By this act the general court clarifies its original intention that the treatment of an item on the books of a corporation shall be controlling in determining its net worth. This act shall be effective upon its passage, and shall be applicable to all open tax years.