Instructions For Form 355 - Massachusetts Corporation Excise Return

Line by Line Instructions

of deductible and intangible expense stated in line

or otherwise ceases to qualify and denominator of

sale is for a residential lot and neither the dealer

1 of the respective Schedule ABI or ABIE.

which is the total number of months in the assets’

nor someone related to the dealer is obligated to

useful life. For example, an item that is depreciated

make any improvements on the lot. For more in-

If any of the apportionment totals for “Worldwide”

over a seven-year period for U.S. tax purposes has

formation see G.L. c. 62C, sec. 32A (b) and I.R.C.

(lines 1c, 2a or 3f) are less than 3.33% of Sched-

a useful life of 84 months.

sec. 453(l)(2)(B).

ule E, line 19, do not include that factor in your

Massachusetts apportionment percentage.

If you are a partner in a partnership or a share-

Line 8

holder in an S corporation, the entity is required to

Subtract the amount of the credit reduction in line

Schedule H

send you the information you need to calculate the

7 from the tentative credit in line 6.

addition to tax under this provision.

Part 2. Reconciliation of

Investment Tax Credit

To the extent practicable, Massachusetts follows

Massachusetts Tangible Property

federal income tax rules in determining the de-

Corporations claiming an Investment Tax Credit

Corporations claiming an ITC in Part 1 must com-

ferred gain from installment sales subject to the

must file Schedule H.

plete Part 2 based on the book value of their cap-

interest-charge addition to tax. For more informa-

ital assets located in Massachusetts.

tion, visit DOR’s website at mass.gov/dor and In-

Part 1. Calculation of Current-Year

ternal Revenue Service Publication 537.

Investment Tax Credit Generated

Excise Calculation

Line 7

Lines 1a through 1d

Only R&D corporations should complete these

Corporations which are not members of a com-

The excise calculation schedule is used to calculate

lines. All others leave blank. R&D corporations

bined group filing a combined report enter the

the various measures of the Massachusetts corpo-

are eligible for the credit only if two thirds of their

amount(s) from the Credit Manager Schedule and

ration excise. These are:

Massachusetts receipts are derived from the pro-

enclose any required schedules showing the calcu-

a tax of $2.60 per $1,000 on taxable Massachu -

vision of research and development services or

lation of the individual credits taken on Form 355.

setts tangible prop erty or taxable net worth, which -

from royalties or fees from licensing patents,

ever applies. If the return is for a short taxable year,

Line 9

know-how or other technology developed from re -

the tangible property or taxable net worth should

If the corporation is a member of a combined group

search and development. See Regulation 830

be prorated; and

filing a combined report, its income measure of

CMR 64H.6.4 for further information.

excise is paid with Form 355U. Enter the amount

a tax of 8.00% on income attributable to

Lines 2a through 2h

from Schedule U-ST, line 41. Corporations which

Massachusetts.

Enter the total cost basis of all qualified depreciable

are not members of a combined group enter 0.

The law also provides for a minimum excise of

property placed in service during the tax year by

$456.

Schedule A category. Qualifying property must be

Line 10

tangible property, including buildings but excluding

Corporations taxable under M.G.L. Ch. 63, sec.

Line 3

motor vehicles and other property taxable under

32D and 39 are subject to a minimum excise of

Enter the amount from Schedule E, line 27, if you

Ch. 60A, used by the corporation in Massachu-

$456. If the corporation is a member of a com-

had taxable income (a positive number). If the

setts, situated in the Commonwealth on the last

bined group, it must file a combined report and its

amount in Schedule E, line 27 is a loss, enter “0.”

day of the taxable year and depreciable under Sec-

income measure of excise is determined on Sched-

tion 167 of the IRC with a useful life of four years

ule U-ST, line 41 and not on Form 355 or 355S. If

Line 5

or more. A corporation may not claim the credit

the member’s own income measure of excise

An addition to tax applies for taxpayers who have

for property it leases to others as a lessor.

from Schedule U-ST, line 41 (as referenced on line

deferred the gain, and the tax associated with that

9 above) is greater than or equal to $456, enter 0

Line 4

gain, on certain installment sales. This addition to

on line 10. Otherwise, subtract the amount on line

If any of the property included in lines 2a through

tax is measured by an interest charge on the tax

9 from $456 and enter the result on line 10. If the

2h is eligible for a U.S. Tax Credit, the total amount

that has been deferred.

corporation is not part of a combined group, enter

of the U.S. credit taken with respect to the qualify-

Include in line 5 an additional tax amount repre-

$456 on line 10.

ing property must be entered here and applied as

senting an interest charge on the deferred tax on

a reduction to the basis in calculating the Mass-

Line 12

gain from certain installment sales with a sales

achusetts credit.

price over $150,000 if you are not a dealer and the

Any corporation that wishes to contribute any

Line 6

aggregate face amount of installment obligations

amount to the Natural Heritage and Endangered

arising during the tax year and outstanding as of

Enter the tentative tax credit. This is 3% of the cost

Species Fund may do so on this form. This amount

the close of the tax year exceeds $5 million. For

after any basis reduction.

is added to the excise due. It increases the amount

more information see G.L. c. 62C, sec. 32A (a)

of the corporation’s payment or reduces the

Line 7

and I.R.C. sec. 453A (a)–(c).

amount of its refund.

If qualifying property is placed in service and dis-

Also include in line 5 an additional tax amount

posed of or otherwise ceases to be in qualified

Line 17

representing an interest charge on the deferred

service before the end of the same tax year, the

Enter the amount of any withholding tax from

gain from the installment sale of time shares and

amount of credits available is reduced. Multiply the

pass-through entities. This is the amount of with-

residential lots, if the sale meets one of the follow-

credit otherwise available (cost as reduced by U.S.

holding from all Schedules 3K-1, lines 36 and 38

ing criteria: 1) the sale is of a timeshare right for

tax credits times 3%) by a fraction, the numerator

that the corporation has received.

six weeks or less; 2) the sale is for the recre-

of which is the number of months remaining in

ational use of specified campgrounds; or 3) the

the useful life of the asset when it is disposed of

Instructions For Form 355 - Massachusetts Corporation Excise Return - 2016 Page 15

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