Heard: Date: May 3, 2016.
from a decision of the Appellate Tax Board.
Supreme Judicial Court on its own initiative transferred the
case from the Appeals Court.
Donald-Bruce Abrams (John S. Brown with him) for the
M. Goldberg, Assistant Attorney General (Daniel J. Hammond,
Assistant Attorney General, with him) for Commissioner of
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.
Hecht, Bruce Fort, Sheldon Laskin, & Lila Disque, of the
District of Columbia, for Multistate Tax Commission.
Present: Gants, C.J., Spina, Cordy, Botsford, Duffly, Lenk,
& Hines, JJ. 
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),  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.
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.
v. Wynne, 135 S.Ct. 1787 (2015)
(Wynne), decided approximately four months after
First Marblehead. See The First Marblehead
Corp. v. Massachusetts Comm'r of
Revenue, 136 S.Ct. 317 (2015). In accordance with the
Court's directive, and with the benefit of additional
briefing and argument by the parties, we have further
considered this case. We again affirm the decision of the
135 S.Ct. at 1793, concerned a challenge to Maryland's
personal income tax scheme under the dormant commerce clause
of the United States Constitution. See art. I, § 8, cl.
3, of the United States Constitution. The Court's
decision reaffirmed the "internal consistency test"
articulated in Container Corp. of Am. v.
Franchise Tax Bd., 463 U.S. 159, 169 (1983), and
Oklahoma Tax Comm'n v. Jefferson Lines,
Inc., 514 U.S. 175, 185 (1995) (Jefferson
Lines), for determining whether a tax violates the
dormant commerce clause. The Court described the test as
follows: "This test, which helps courts identify tax
schemes that discriminate against interstate commerce,
'looks to the structure of the tax at issue to see
whether its identical application by every State in the Union
would place interstate commerce at a disadvantage as compared
with commerce intrastate.' . . . By hypothetically
assuming that every State has the same tax structure, the
internal consistency test allows courts to isolate the effect
of a defendant's State tax scheme." Wynne,
135 S.Ct. at 1802, quoting Jefferson Lines,
supra. See Container Corp. of Am.,
supra ("[an] obvious component of fairness in
an apportionment formula is what might be called internal
consistency -- that is, the formula must be such that, if
applied by every jurisdiction, it would result in no more
than all of the unitary business'[s] income being
taxed"). In Wynne, the Court concluded that the
Maryland income tax scheme failed the internal consistency
test, and thereby violated the dormant commerce clause,
because it hypothetically resulted in double taxation of the
income of Maryland residents that was earned outside the
State. Wynne, supra at
understand the Supreme Court's order of remand in this
case as a directive to consider further whether the
Massachusetts FIET, as applied to Gate, fails the internal
consistency test discussed and affirmed in Wynne,
and thereby contravenes the dormant commerce
clause. We have done so, and conclude that the
Massachusetts tax scheme, as applied to Gate, satisfies the
Laws c. 63, § 2A (§ 2A), sets out the rules for
apportioning the taxable income of financial institutions
between or among the States in which the institutions
operate. As stated in First Marblehead, the rules
"allocate the income to the Commonwealth for tax
purposes by multiplying the taxpayer's income by the
'apportionment percentage' that is 'determined by
adding the taxpayer's receipts factor, property factor
and payroll factor together and dividing the sum by
three.'" First Marblehead, 470 Mass. at
502, quoting § 2A (b). In Gate's case, the
only factor in dispute is the property factor. The rules for
determining a financial institution's property factor are
set out in § 2A (e), and the rules governing
loans in particular are in § 2A (e) (vi) .
Under that subsection, the general rule is that a "loan
is properly assigned to the regular place of business with
which [the loan] has a preponderance of substantive
contacts." G. L. c. 63, § 2A (e) (vi) (A) (2) .
More specifically, a loan is properly assigned to the
Commonwealth "if it is properly assigned to a regular
place of business of the taxpayer within the [C]ommonwealth,
" G. L. c. 63, § 2A (e) (vi) (A) (1); and a loan is
properly assigned to a jurisdiction outside the Commonwealth
if it is assigned to a "regular place of business"
in that other jurisdiction and the taxpayer's records and
tax returns generally reflect the same assignment. See §
2A (e) (vi) (A) (2) . If a loan is assigned by the
taxpayer to a place outside the Commonwealth that is not a
"regular place of business, " the ...