diff --git a/src/backend/parser/parse_coerce.c b/src/backend/parser/parse_coerce.c
index 25edfa26601..66e28c44f3e 100644
--- a/src/backend/parser/parse_coerce.c
+++ b/src/backend/parser/parse_coerce.c
@@ -35,6 +35,7 @@
 
 find_coercion_pathway_hook_type find_coercion_pathway_hook = NULL;
 determine_datatype_precedence_hook_type determine_datatype_precedence_hook = NULL;
+is_tsql_base_datatype_hook_type is_tsql_base_datatype_hook = NULL;
 coerce_string_literal_hook_type coerce_string_literal_hook = NULL;
 validate_implicit_conversion_from_string_literal_hook_type validate_implicit_conversion_from_string_literal_hook = NULL;
 select_common_type_hook_type select_common_type_hook = NULL;
@@ -1504,9 +1505,38 @@ select_common_type(ParseState *pstate, List *exprs, const char *context,
 				pcategory = ncategory;
 				pispreferred = nispreferred;
 			}
+		} else if (sql_dialect == SQL_DIALECT_TSQL && ntype == ptype)
+		{
+			/*
+			 * For the columns which have the same base type, we choose the
+			 * expression with higher precedence type in T-SQL.
+			 * For example, smallmoney UNION money, the base type of
+			 * them are both fixeddecimal. But we shouldn't use smallmoney as
+			 * the result type, it could loss precision.
+			 * Here we don't need to update other variables since they are the
+			 * same.
+			 */
+			if (is_tsql_base_datatype_hook &&
+				(*is_tsql_base_datatype_hook)(exprType(nexpr)) &&
+				determine_datatype_precedence_hook &&
+				determine_datatype_precedence_hook(exprType(nexpr),
+												   exprType(pexpr)))
+				pexpr = nexpr;
 		}
 	}
 
+	/*
+	 * If the preferred type is not the result type of corresponding
+	 * expression, it means the result type is a domain type in Postgres. Some
+	 * base data types in T-SQL are implemented as domain types in Babelfish.
+	 * From SQL Server's perspective, we should try to retain those types as
+	 * result types.
+	 */
+	if (sql_dialect == SQL_DIALECT_TSQL && ptype != exprType(pexpr) &&
+		is_tsql_base_datatype_hook &&
+		(*is_tsql_base_datatype_hook)(exprType(pexpr)))
+		ptype = exprType(pexpr);
+
 	/*
 	 * If all the inputs were UNKNOWN type --- ie, unknown-type literals ---
 	 * then resolve as type TEXT.  This situation comes up with constructs
diff --git a/src/include/parser/parse_coerce.h b/src/include/parser/parse_coerce.h
index c6fe31621dd..9055aaaf474 100644
--- a/src/include/parser/parse_coerce.h
+++ b/src/include/parser/parse_coerce.h
@@ -113,6 +113,11 @@ typedef CoercionPathType (*find_coercion_pathway_hook_type) (Oid sourceTypeId,
  */
 typedef bool (*determine_datatype_precedence_hook_type) (Oid typeId1, Oid typeId2);
 
+/*
+ * Hook interface to determine if a data type is a base type in T-SQL
+ */
+typedef bool (*is_tsql_base_datatype_hook_type) (Oid typeId);
+
 /*
  * T-SQL has different rules for string literal datatype coercions
  */