Form P.s.1 Instructions - 2012

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2012 Form P.S.1 Instructions
Who Must File a Public Service Corporation
Failure to meet any of the requirements detailed in this section may
Franchise Tax Return?
result in a penalty for filing an insufficient return. Such penalties may
be assessed at double the amount of the tax due.
All utility corporations subject to Massachusetts General Laws (MGL)
Ch. 63, sec. 52A (not including wireless companies), and which do
When Must a Corporation Pay Estimated Taxes?
any or all of their business in Massachusetts and which are not part
Any utility corporation which reasonably estimates its franchise tax to
of combined group required to file Form 355U must complete and file
be more than $1,000 must pay estimated taxes. Payments must be
Massachusetts Form P.S.1. Utility corporations are as follows:
made in quarterly installments of 40%, 25%, 25% and 10% of the es-
timated annual tax liability.
• Every incorporated electric company and gas company subject to
MGL Ch. 164;
Note: New corporations in their first full taxable year with less than
• Every incorporated water company and aqueduct company subject
10 employees have different estimated payment percentages — 30%,
to MGL Ch. 165;
25%, 25% and 20% respectively.
• Every incorporated telephone and telegraph company subject to
Public Utility companies that underpay, or fail to pay, their estimated
MGL Ch. 166;
taxes may incur an additional penalty on the amount of the under-
payment for the period of the underpayment. Form M-2220, Under-
• Every incorporated railroad and railway company subject to MGL Ch.
payment of Massachusetts Estimated Tax by Corporations, is used to
160 and every corporation qualified under said MGL Ch. 160, sec.
compute the additional charge.
131A to acquire, own and operate terminal facilities from steam, elec-
Any corporation having $1 million or more of federal taxable income
tric or other types of railroad;
in any of its three preceding taxable years (as defined in section
• Every incorporated street railway subject to MGL Ch. 161;
6655 (g) of the IRC) may only use its prior year’s tax liability to calcu-
• Every incorporated electric railroad subject to MGL Ch. 162;
late its first quarterly estimated tax payment. Any reduction in the first
installment payment that results from using this method must be
• Every incorporated trackless trolley company subject to MGL Ch. 163;
added to the second installment payment.
• Every domestic or foreign pipeline corporation engaged in the trans-
How Is the Corporation Franchise Tax Determined?
portation or sale of natural gas within the Commonwealth; or
The tax for utility corporations is 6
1
% of net income. For tax pur-
2
• Every foreign corporation which is not subject to the above chapters,
poses, net income is gross income from all sources, without exclusion,
but which does an electric, gas, water, aqueduct, telephone, tele-
other than dividends from investment in 80% or more of the voting
graph, railroad, railway, electric railroad, trackless trolley or bus busi-
stock of another utility corporation, less deductions allowed by the In-
ness within the Commonwealth and has, prior to January 1, 1952,
ternal Revenue Code in effect for the taxable year. Deductions are
been subject to taxation under MGL Ch. 63, secs. 53–60.
not allowed for dividends received, losses sustained in other taxable
years, and income, franchise and capital stock taxes. Any credits al-
When Must Form P.S.1 Be Filed?
lowed under the Internal Revenue Code for the taxable year are not
Form P.S.1 must be filed on or before the 15th day of the 3rd month
allowed in Massachusetts.
after the close of the utility corporation’s taxable year. A late return in-
curs a penalty of 1% per month (or fraction thereof), up to a maximum
Are Combined Returns Allowed?
of 25% of the tax due. The penalty for late payment of the tax is 1%
Public service corporations that are members of combined groups en-
per month (or fraction thereof) of the balance due, up to a maximum
gaged in a unitary business are required to file combined returns under
of 25%.
M.G.L. c. 63, s. 32B. See 830 CMR 63.32B.2 for additional informa-
tion. A Public service corporation that is a member of such a combined
Can a Corporation Get an Extension of Time to File?
group files Form 355U instead of Form P.S. 1. Public service corpora-
Yes. Utility corporations may request a six-month extension of time to
tions that are not members of such a group are not allowed to partici-
file Form P.S.1 by submitting Massachusetts Form 355-7004 Misc.
pate in the filing of combined returns.
on or before the original due date of the return. At or before the time
of filing Form 355-7004 Misc., the utility corporation must pay in full
What if the Taxpayer Is a Fiscal or Short Year Filer?
the estimated tax due. Failure to pay at least 50% of the total tax due
File the 2012 return for calendar year 2012 and fiscal years that began
as shown on your return will result in the voiding of the extension and
in 2012 and ended in 2013. For a fiscal year return, fill in the tax year
the imposition of a late filing penalty.
space at the top of page 1. Short year filers should file using the tax
form for the calendar year within which the short year falls. If the short
What Is a Valid Return?
year spans more than one calendar year, the filer should file use the
A valid return is a return upon which all required amounts have been
tax form for the calendar year in which the short year began. If the
entered in all appropriate lines on all forms. Data sheets, account forms
current form is not available at the time the short year filer must file,
or other schedules may be enclosed to explain amounts entered on
the filer should follow the rules explained in TIR 11-12.
the forms. However, referencing items to enclosures in lieu of properly
entering all amounts onto the return is not sufficient.
Line Instructions
A properly filed return must also include exact and complete copies of
If your return is not for the calendar year, enter at the top of the form
all four pages of the corporation’s U.S. Form 1120. Copies of all accom-
the dates of your taxable year. If the return covers less than a full fis-
panying schedules and supplemental statements must be enclosed.
cal year, the taxable year is the twelve month period ending with the
close of the period covered by the return.
Reproduction of returns must be approved by the DOR prior to filing
and meet the criteria provided in Technical Information Release 95-8.
Should the Whole Dollar Method be Used?
Please address form approvals to The Banking and Insurance Unit,
Yes. All amounts entered on Form P.S.1 must be rounded off to the
PO Box 7052, Boston, MA 02204.
nearest dollar.

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