Matthew A. Morris quoted in MLW article on Appellate Tax Board case Akamai Technologies Inc. v. Commissioner

January 10, 2022

Matthew A. Morris, partner in the firm’s Corporate Department, was quoted in a Massachusetts Lawyers Weekly (MLW) article on Jan. 6, 2022. The article, “Appellate Tax Board adds to body of law on remotely accessed software,” covers a recent ruling by an Appellate Tax Board that a Cambridge business qualified as a manufacturer and should receive a corporate excise abatement because it was engaged in the sale of remotely accessed software rather than the provision of a service.

Read the full article at Massachusetts Lawyers Weekly (subscriber content).

From the article:

Boston attorney Matthew A. Morris said the most striking aspect of the Akamai decision is the ATB’s sophisticated analysis of the practical aspects of modern, enterprise-level software transactions, which eschewed formalistic distinctions like the marketing label the company used or how customers access the software.

Akamai may not establish any kind of “bright line” that will resolve the current ambiguity over whether a business is service provider rather than a manufacturer, Morris noted.

“That said, this case is certainly helpful in that it sets out the types of facts that the board — and the Department [of Revenue] — will consider in making these kinds of determinations,” he said.

Like the 2020 Supreme Judicial Court case Citrix Systems, Inc., et al. v. Commissioner of Revenue, Akamai illustrates the fact-intensive nature of software cases, he said.

“It is pretty clear at this point that there is no one determinative factor that will dictate whether it is software rather than a service being sold but rather the whole fabric of the arrangement between the vendor and its customers,” Morris said, adding that Akamai likely will not be the last case the board hears on the issue.