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The Rules and Regulations Bureau at the Department of Revenue has had a busy year. In addition to Department Letter Rulings, Directives and TIR's, DOR has promulgated two corporate regulations, proposed and held hearings on three more and has three other major regulations in various stages of completion.
The Net Operating Loss Regulation (330 CMR 63.30.2) and the Nexus Regulation (830 CMR 63.39.1) were promulgated in the early part of 1993. These two regulations provided the most substantial regulatory guidance in corporate excise since the invalid Unity Regulation of the early '80s. The Department additionally proposed and held hearings on:
* Corporate Excise/Apportionment of Income (830 CMR 63.38.1)
* Corporate Excise/Special Apportionment Broadcasters (830 CMR 63.38.5)
* Corporate Excise/Special Apportionment Publishers (830 CMR 63.38.6)
The Department has three other regulations of note that have been assigned as projects and are in various stages of completion:
* "Arms Length" Regulation, Chapter 63 Section 39A
* Innocent spouse Regulation, Chapter 62C Section 84
* Amendments to the Telecommunications Regulation (830 CMR 64.1.6)
We have asked the Rules and Regulation Bureau to update us on the status of these six projects, and they were kind enough to give us some insight into their thought process.
APPORTIONMENT REGULATION (830 CMR 38.1)
First Nexus and NOLs, now Apportionment and Arms Length: the Department is providing guidance regarding their statutory interpretations where previously there was little or none. The Department received quite a few comments and recommendations concerning this regulation and in consideration of these comments is contemplating a number of changes.
Many of the recommendations submitted by the Massachusetts Society of CPAs will likely be implemented. The major emphasis of the Society's comments stressed the burden on compliance that some of the provisions of the regulation imposes. Picking up on this theme of simplicity, it is expected that the Department will adjust the regulation in several key areas.
1. SIMPLIFY COMPLIANCE
* Property Factor--Mobile Property
The Department acknowledges that the regulation's method of handling mobile property would be cumbersome and require too much record keeping. They are considering changing the rules to allow a taxpayer to pick one of several possible methods. The filer must maintain consistency utilizing the same method from year to year.
* Wage Factor--Leased Employees
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