Massachusetts Appellate Court disallows interest expense, royalty expenses, and rebate payments

On January 11, 2013, the Massachusetts Court of Appeals affirmed the Massachusetts Appellate Tax Board's decision disallowing certain expenses that occurred between related entities during the 2001 to 2003 tax years, including interest expenses on transfers made through the taxpayer's cash-management system, patent royalties paid to an affiliate, and rebate payments made to related entities. [Kimberly-Clark Corp. v. Commissioner of Revenue, Mass. App. Ct., slip opinion No. 11-P-632 (1/11/13)]