MA: Pending Legislation Addresses Treatment of GILTI

A supplemental budget bill, H.4930, has been sent to Massachusetts Governor Baker for signature. If enacted, H. 4930 would mandate that amounts included in income under sections 951 and 951A of the Internal Revenue Code are treated as dividends received for Massachusetts corporate excise purposes. Furthermore, no deduction would be allowed under Internal Revenue Code sections 245A, 250, or 965(c). The cumulative effect of these changes is that the gross amount of GILTI before the IRC section 250 deduction would be treated as a dividend received for Massachusetts corporate excise tax purposes. Under existing Massachusetts’ law, corporations are entitled to a 95 percent dividends-received deduction. The bill also clarifies that dividends that are deemed to be received from an entity, including amounts included in federal gross income pursuant to sections 951 or 951A of the Code, will not be considered receipts for purposes of computing the Massachusetts receipts factor.

Please stay tuned to TWIST for future legislative updates.