Mass. Rep. Carlos González files bill changing state treatment of certain offshore income

Representative Carlos González of Springfield filed House Bill No. 3110 on Jan. 17, 2025, proposing changes to how Massachusetts treats certain amounts included in federal gross income under the Internal Revenue Code for state tax purposes. The bill, titled "An Act combating offshore tax avoidance," would amend multiple provisions of chapters 62 and 63 of the Massachusetts General Laws and take effect for tax years beginning on or after Jan. 1, 2025.

Under the bill text, amounts included in federal gross income pursuant to Internal Revenue Code section 951 would be treated as dividends for Massachusetts tax purposes; amounts included under section 951A would not be treated as dividends. The filing further inserts a specific 50 percent adjustment related to section 951A amounts in several places: adding “an amount equal to fifty percent of amounts included in federal gross income pursuant to section 951A of the Code” to Part B of section 3 of chapter 62; allowing a deduction equal to 50 percent of amounts included pursuant to section 951A in the definition of “Net income” in chapter 63; and repeating the 50 percent language in several related subsections and clauses across the amended statutory text.

The bill also amends statutory language governing what is considered receipts for apportionment and taxable income, specifying that amounts included pursuant to section 951A of the Code shall not be considered receipts. Multiple cross-references in the bill text update the treatment of section 951 and section 951A amounts across chapter 62 and chapter 63, including explicit replacement language in subsection (e) of section 1 of chapter 62 and corresponding changes in section 2A and section 30 of chapter 63.

The filing identifies Representative González as the sponsor and lists multiple co-petitioning members of the House; the cover language indicates the bill relates to revenue matters. The document does not include floor debate, committee referral language beyond the subject heading, or statements from the sponsor explaining legislative intent.

Next procedural steps are not spelled out in the filing text; as with any House bill, enactment would require further action by the General Court. The bill sets an operative date for its provisions to apply to tax years beginning on or after Jan. 1, 2025.