Massachusetts - Corporation properly classified as a financial institution

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On April 17, 2013, the Massachusetts Appellate Tax Board ruled that a Delaware holding company involved in the securitization and lending of student loans was a financial institution subject to the financial institution excise tax because it derived more than 50% of its gross income from lending activities, including activities of its pass-through entities, and was in substantial competition with other financial institutions. Massachusetts taxpayers questioning their entity classification as a financial institution should consider the qualifying factors in this decision, especially with regard to pass-through entity activity, what it means to be engaged in ‘lending activities,' and what it means to be 'in substantial competition.’ [First Marblehead Corporation & Gate Holdings, Inc. v. Commissioner of Revenue, Mass. App. Tax Bd., Dkt. No. C293487, C305217, C305240, C305,241 (4/17/13)]


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