Notwithstanding the general rule set forth in 830 CMR 63.38.1(1)(b), above, the following taxpayers shall determine the part of their net income derived from business carried on in Massachusetts in the following manner:ġ. Constitution, that income stream shall be allocated in full to Massachusetts. If a taxpayer with a Massachusetts commercial domicile has income from business activity which is taxable both in Massachusetts and in another state but also has an income stream that is prohibited from being taxed in another non-domiciliary state by reason of the U.S. If a taxpayer has income from business activity which is taxable both in Massachusetts and in another state, then the part of its net income derived from business carried on in Massachusetts is determined by multiplying all of its taxable net income by the three factor apportionment percentage as provided in M.G.L. All of a taxpayer's taxable net income is allocated to Massachusetts if the taxpayer does not have income from business activity which is taxable in another state.
Also, this regulation applies to determine the apportionment percentage to be used to calculate, on a separate company basis, a corporation’s non-income measure excise. 63, § 32B, provided, however, that additional apportionment rules that apply in that context are set forth in 830 CMR 63.32B.2. This regulation also applies to corporations that are subject to combined reporting within the meaning of M.G.L. However, except as expressly stated, the regulation does not apply to income derived from mutual fund sales received by mutual fund service corporations within the meaning of M.G.L. 62, § 17A and to nonresident individuals when permitted or required by 830 CMR 62.5A.1. For example, the regulation applies to manufacturing corporations to S corporations and their shareholders, as described under M.G.L. The regulation also governs the calculation of an apportionment percentage by other taxable entities when such entities are permitted or required to use the income apportionment method set out in M.G.L. The purpose of 830 CMR 63.38.1 is to explain the allocation and apportionment of income of business corporations, as provided in M.G.L.
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