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Massachusetts’ Tax Power Disputed in Briefs to Top State Court

April 7, 2022, 2:02 PM

Massachusetts lacks the statutory authority to tax capital gains realized by a Florida S corporation on its sale of a Massachusetts limited liability company, the corporation argued to the state high court.

The state fought back, arguing in its supplemental brief filed Wednesday that the state’s statute on corporate taxation requires S corporations doing business or owning property in Massachusetts to pay tax on their net income, including income from the sale of an interest in a business.

The parties dispute how much of VAS Holdings & Investments LLC’s capital gains from the sale of its membership interests in Cloud5 ...