The Massachusetts Supreme Judicial Court recently held that software vendors have a statutory right to apportion tax on the sale of prewritten computer software purchased for use in multiple states and that they may do so through the Commonwealth’s general tax abatement process. The court’s decision in Oracle USA, Inc. v. Commissioner of Revenue, 487 Mass. 518 (2021) confirms that the ability to apportion tax on software is not contingent on strict compliance with the administrative procedures set forth in the Massachusetts Commissioner of Revenue’s apportionment regulation. The tax abatement process is an acceptable mechanism for taxpayers to seek tax apportionment with respect to software purchased for use in multiple jurisdictions.
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and recommended that the Court decline jurisdiction over the case. Although the ultimate decision is yet to be issued, the U.S. Supreme Court generally follows the Solicitor General’s recommendations after, as here, the Court requests the U.S. government’s input.
