The Massachusetts Appellate Tax Board found that software-as-a-service (SaaS) provider Akamai Technologies Inc. was a manufacturing corporation, rather than a service provider. Akamai, headquartered in Massachusetts, provided software-based cloud services allowing customers to manage the delivery of web and media content over the Internet. In Massachusetts, a manufacturing corporation must use single sales factor apportionment,

On October 23, 2020, the Massachusetts Appellate Tax Board ruled that capital gain from a Florida S corporation’s sale of a subsidiary Massachusetts LLC was subject to Massachusetts corporate excise tax and nonresident composite tax. The taxpayer contended that the U.S. Constitution’s Due Process and Commerce Clauses forbade Massachusetts from taxing the income because the

The Tennessee Court of Appeals held that a manufacturer’s proceeds from a legal malpractice action are business earnings subject to the Tennessee excise tax. The malpractice action arose when the taxpayer’s attorneys improperly filed a European patent. The damages awarded in settlement of the claim were based on profits the taxpayer would have earned if

On February 28, 2020, the Oregon Tax Court held that multiple airlines operating as a unitary business should aggregate not only transportation revenue but also other metrics, such as departure ratios, that are factored into the apportionment formula used by Oregon for airline taxpayers. Oregon regulations provide a modified single sales factor apportionment rule for

On February 26, 2019, the Oregon Tax Court held that an out-of-state cigarette manufacturer’s in-state activities violated Public Law 86-272, resulting in the manufacturer being subject to Oregon’s corporation excise tax. P.L. 86-272 prohibits any state from imposing a net income tax on out-of-state taxpayers that generally limit their in-state business activities to solicitation. The

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