A bank holding company under the Bank Holding Company Act of 1956 properly claimed Massachusetts research tax credits, as the applicable Massachusetts state tax law does not prohibit bank holding companies from claiming income tax research credits.

In this matter, the Massachusetts Department of Revenue (Department) audited the taxpayer’s and its subsidiaries tax report and concluded that the taxpayer was not entitled to claim research credit, asserting that since the taxpayer was a bank holding company, it was not subject to the excise imposed under G.L. c. 63, § 39 and therefore it may not claim the research credits.

However, the Appellate Tax Board noted that the applicable law does not limit credit eligibility based on the type of business corporation claiming the credit and therefore, the taxpayer, as a bank holding company, could claim the research tax credit. State Street Corporation v Commissioner of Revenue, Appellate Tax Board (Massachusetts), No. C344139, August 15, 2024