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Richard Jones, the leader of Sullivan’s Tax Group, was quoted in the article "The Consequences of Massachusetts's Sourcing Challenge," published by Tax Notes [sub. req'd] on December 27, 2024. The article discusses the Welch v. Commissioner of Revenue decision, where the Massachusetts Appellate Tax Board (ATB) ruled that a nonresident owed state income tax on gains from the sale of stock in a Massachusetts-based corporation he founded. The Welch case has been appealed to the Massachusetts Appeals Court and is scheduled for oral argument on January 14, 2025.

Rich told Tax Notes that the Welch appeal is of interest because under the entity theory of taxation, “most states recognize that gain on the sale of corporate stock is taxable only in the individual’s home state, and not in all the states where the corporation operates.”  Rich also noted that Massachusetts regulations provide that nonresidents are not "taxed on gain from the sale of corporate stock, except where the gain was taxed federally as compensation or where the stock was otherwise given in exchange for services.” He added that there is no exception based on how active a shareholder was in the corporation’s business. While the ATB in Welch stated that the income from the stock sale was “compensatory in nature”, Rich commented that such a finding might be subject to scrutiny by the Appeals Court where the taxpayer received the stock on formation of the company and not in exchange for services.