Former Massachusetts Resident Stock Transaction Ruled Taxable

The Appellate Tax Board ruled that the gain from the sale of stock was Massachusetts source income subject to tax. The Court of Appeals affirmed.

WHY THIS IS IMPORTANT… Although the taxpayer was a New Hampshire resident when he sold his stock, the sale was ruled taxable by Massachusetts because the company was Massachusetts-based and he received the stock as compensation for his employment with the company rather than as an investor. A 2003 amendment to the Massachusetts tax code removed the requirement that a taxpayer be a Massachusetts resident in the year the income was received, making this transaction taxable by Massachusetts.