Massachusetts ~ Corporate, Personal Income Taxes: Directive Issued on Impact of Depreciation and Expensing Deductions

The Massachusetts Department of Revenue has issued a directive to explain and clarify the extent to which expensing deductions and depreciation and bonus depreciation deductions under IRC affect the basis upon which the investment tax credit and economic development incentive credits are calculated. The directive explains that the basis to be used for computing such credits is the taxpayer’s initial adjusted basis used for computing federal depreciation deductions upon the acquisition, construction, reconstruction, or erection of the property. For purposes of determining the amount of Massachusetts investment tax credit and the amount of Massachusetts economic development incentive credits, the basis of qualifying property upon which these Massachusetts investment credits are calculated does not require a reduction on account of the first-year federal or Massachusetts “regular” depreciation deductions or the bonus depreciation deduction allowed for federal income tax purposes pursuant to IRC §168(k). For purposes of determining the amount of Massachusetts investment tax credit and the amount of economic development incentive credits, the basis of qualifying property upon which these Massachusetts investment credits are calculated must reflect a reduction on account of the amount of the cost of property that is expensed under IRC §179 for federal and Massachusetts tax purposes with respect to the qualifying property.

Directive 15-3, Massachusetts Department of Revenue, October 1, 2015, ¶401-555


 

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Wolters Kluwer Tax and Accounting

Wolters Kluwer Tax and Accounting is a leading provider of software solutions and local expertise that helps tax, accounting, and audit professionals research and navigate complex regulations, comply with legislation, manage their businesses and advise clients with speed, accuracy and efficiency. Wolters Kluwer Tax and Accounting is part of Wolters Kluwer N.V. (AEX: WKL), a global leader in information services and solutions for professionals in the health, tax and accounting, risk and compliance, finance and legal sectors. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with specialized technology and services. Wolters Kluwer reported 2016 annual revenues of €4.3 billion. The company, headquartered in Alphen aan den Rijn, the Netherlands, serves customers in over 180 countries, maintains operations in over 40 countries and employs 19,000 people worldwide. Wolters Kluwer shares are listed on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices. Wolters Kluwer has a sponsored Level 1 American Depositary Receipt program. The ADRs are traded on the over-the-counter market in the U.S. (WTKWY).

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