Weekly Round-Up: Income Sourcing Guidance from Pennsylvania, Massachusetts Bear Striking Similarities


Receipts from sales of services must be sourced to the location of the customer, Pennsylvania’s Department of Revenue clarified in an information notice.  Pennsylvania’s market-based sourcing rules bear a number of similarities to recently adopted Massachusetts regulations, Bloomberg BNA State Tax Law Editor Lauren Colandreo writes in this week’s issue of the Weekly State Tax Report.

Like the Pennsylvania statute and notice, 830 CMR 63.38.1(9)(d)(4) generally sources sales of services to Massachusetts if, and to the extent that, the service is delivered to a location in the state. Unlike Pennsylvania, the Massachusetts regulation goes on to say that the term “delivered” refers to the location of taxpayer's market for the service, without specific reference to the location of the customer.

Also like the Pennsylvania notice, the Massachusetts regulation addresses a number of different services and service industries, including in-person, professional and transportation services.

The Massachusetts regulation also provides special rules for sales or licenses of digital goods or services and for sales of software but, unlike Pennsylvania, does not specifically identify the transactions which fall within this category.

Colandreo’s complete analysis of these developments coming out of Pennsylvania and Massachusetts can be read by signing up for a free trial of the Weekly State Tax Report here.

Some notable developments from the State Tax Developments Tracker – Bloomberg BNA’s new tool for monitoring important developments in all the states:

California State Board of Equalization Members Assume Office

Iowa Department of Revenue Publishes Study Evaluating Grant of Wind Energy Production Tax Credits and Renewable Energy Tax Credits

Virginia Department of Taxation Publishes Guidelines Regarding Research Development Expenses Tax Credit

For more information about this and other state tax issues, sign up for a free trial of the Bloomberg BNA Premier State Tax Library. 

In other developments… 

Michigan Voters to Consider Complex Tax Package, by the Tax Foundation 

State Severance Tax Revenue and the Falling Price of Oil, by the National Association of State Budget Officers

New York City takes first step toward tax reform, by PwC

Compiled by Priya D. Nair