Analysis of Corporate Excise DOR Directive 96-2: Intangible Property

This document analyzes Massachusetts Department of Revenue's Corporate Excise DOR Directive 96-2, issued on July 3, 1996. The directive addresses the circumstances under which the in-state ownership and use of intangible property subject a foreign corporation to the corporate excise tax. It clarifies that a foreign corporation's intangible property used within Massachusetts triggers the corporate excise if it generates gross receipts within the state, the activity is purposeful, and the corporation's presence is more than de minimis. The directive defines intangible property and provides examples illustrating the application of the rule, including scenarios involving licensing agreements and franchise operations. It also clarifies the applicability of Public Law 86-272, which protects certain solicitation activities, and provides specific examples to illustrate the nexus determination. The directive is effective for taxable years beginning on or after January 1, 1996.