The Massachusetts Department of Revenue (DOR) has amended 830 CMR 62.5A.1(6) to clarify that, for taxable years beginning on or after January 1, 2025, pass-through entities must apportion their taxable net income using the single sales factor apportionment rules under M.G.L. C. 63, Sec 38.  These updated regulations are in response to Bill H.4104 “An Act to Improve the Commonwealth’s Competitiveness, Affordability, and Equity” which instituted single sales factor apportionment for corporate taxpayers for tax years beginning on or after January 1, 2025.  The regulations allow an alternative apportionment formula when both the numerator and denominator of the sales factor are zero.  In these situations, the taxpayer’s taxable income will be apportionment to Massachusetts based on the corporation’s property and payroll in the state.  

The regulations also amended 830 CMR 62.5A.1(11) to establish certain exemptions from the requirement that married individuals must file a joint Massachusetts income tax return for any year for which they file a joint federal income tax return.  These exemptions include:

1. either married individual is not required to file a return under M.G.L. c 62C, Sec 6(a); or
2. one or both married individuals is a non-resident and has items of income, exemptions or deductions unrelated to their Massachusetts income and: 
   1. if only one of the married individuals is a nonresident, the sum of the resident married individual’s MA gross income, and the non-resident married individuals MA source income does not exceed the threshold in M.G.L. c. 62 sec 4(d); or
   2. if both of the married individuals are nonresidents, the married individuals combined MA source income does not exceed the threshold in M.G.L. c. 62, Sec 4(d).  

If you have questions on how these regulations impact your taxes please reach out to a professional at Lee and Crowley for assistance.