The First Marblehead Corporation, et al. v. Commissioner of Revenue (Lawyers Weekly No. 10-122-16)

NOTICE:  All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports.  If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-1030; SJCReporter@sjc.state.ma.us   SJC-11609   THE FIRST MARBLEHEAD CORPORATION & another[1]  vs. COMMISSIONER OF REVENUE.       Suffolk.     May 3, 2016. – August 12, 2016.   Present:  Gants, C.J., Spina, Cordy, Botsford, Duffly, Lenk, & Hines, JJ.[2]     Financial Institution.  Taxation, Excise, Apportionment of tax burden.  Constitutional Law, Taxation, Commerce clause, Interstate commerce.  Interstate Commerce.       Appeal from a decision of the Appellate Tax Board.   The Supreme Judicial Court on its own initiative transferred the case from the Appeals Court.   Donald-Bruce Abrams (John S. Brown with him) for the taxpayer. Brett M. Goldberg, Assistant Attorney General (Daniel J. Hammond, Assistant Attorney General, with him) for Commissioner of Revenue. The following submitted briefs for amici curiae: Margaret Winterkorn Meyers, of New York, David W.T. Daniels, of the District of Columbia, & Emily M. Kelley, for Michael S. Knoll & another. Helen Hecht, Bruce Fort, Sheldon Laskin, & Lila Disque, of the District of Columbia, for Multistate Tax Commission.     BOTSFORD, J.  In The First Marblehead Corp. v. Commissioner of Revenue, 470 Mass. 497, 498 (2015) (First Marblehead), this court affirmed a decision of the Appellate Tax Board (board) concerning the tax liability of the taxpayer GATE Holdings Inc. (Gate), under the Commonwealth’s financial institution excise tax (FIET).  Gate was a wholly owned subsidiary of The First Marblehead Corporation (FMC),[3] id. at 497-498, and “played an integral role in the FMC student loan securitization process[,]” as the holder of beneficial interests in all the separate trusts that effectively owned the securitized student loans.  Id. at 499.  Gate had no employees, no office space, and no tangible assets; it was essentially a holding company.  Id.  Gate’s taxable property consisted of its interests in the securitized student loans held in the trusts.  Id.  In its decision, the board determined, and this court agreed, that all of Gate’s interests in the securitized loans were properly assigned to Massachusetts under the FIET’s apportionment rules set forth in G. L. c. 63, § 2A, resulting in a greater tax liability than Gate had calculated.  Id. at 498. Gate filed a petition for a writ of certiorari in the United States Supreme Court.  On October 13, 2015, the Court granted Gate’s petition, vacated this court’s rescript in the case, and remanded the case for further consideration in light of Comptroller of the Treasury of Md. […]

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