On July 16, 2015, TEI submitted a letter to Massachusetts Governor Charlie Baker urging his veto of the Legislature's proposed repeal of Massachusetts' FAS 109 deduction as part of the Commonwealth's fiscal 2016 budget. The FAS 109 deduction was adopted as part of Massachusetts combined reporting regime in 2008 and was designed to mitigate the financial reporting impact for publicly-traded companies whose net deferred tax liabilities increased as a result of the shift to combined reporting.
The Massachusetts Legislature repeatedly deferred the implementation of the FAS 109 deduction in its budget proposals and now seeks to eliminate the deduction entirely. TEI maintains that the elimination of the deduction will adversely impact businesses with capital-intensive operations, complicate their financial reporting obligations, break the promise made to the business community when combined reporting was enacted, and undermine the Commonwealth's credibility with taxpayers.
TEI's letter was prepared under the aegis of TEI's State and Local Tax Committee, whose chair is Greg Potts. Pilar Mata, Tax Counsel, coordinated the preparation of TEI's letter.