Form 355s - Massachusetts S Corporation Excise Return

Line by Line Instructions

Row e

Regulation, 830 CMR 63.38.1 sec. 5(b). This stan-

averaging to properly reflect the average value of

dard is not satisfied merely because the taxpayer

the property. For purposes of the property factor, a

Multiply row (c) by row (d).

is incorporated in such a state or files a return in

taxpayer may elect to use any reasonable method

Row f

such a state that relates to capital stock tax or

for attributing its mobile property to Massachu-

Enter the amount if the corporation used a post-

franchise tax for the privilege of doing business.

setts. The election is made by filing a return that

apportionment net operating loss in a prior year.

employs the chosen method for the first tax year

If the corporation is requesting alternate appor-

Caution, prior to January 1, 2010 only corpora-

ending on or after August 11, 1995, in which the

tionment under M.G.L. Ch 63, sec. 42, answer

tions subject to combined reporting and filing

taxpayer owns or rents mobile property and appor-

yes in line 8 of Form 355S and enclose Form AA-1.

form 355U deducted a net operating loss on a

tions income to Massachusetts. The taxpayer must

You must still complete and file Schedule F. A re-

post-apportionment basis.

make available a statement describing the method

fund will be issued if alternative apportionment is

chosen and must use the same method consis-

Row g

granted by the Commissioner. For further infor-

tently from year to year. For further information, in-

Subtract row (f) from row (e).

mation on alternative apportionment see the

cluding safe harbor methods, see Regulation 830

Massachusetts Alternate Apportionment Regula-

Line 3

CMR 63.38.1 sec. 7(d).

tion, 830 CMR 63.42.1.

These are special instructions for corporations that

Construction in progress is generally excluded

For further information about corporations that

filed Form 355U in 2009. A corporation that filed as

from the property factor; see Regulation 830 CMR

hold partnership interests and the appropriate

a member of a combined group for a taxable year

63.38.1 sec. 7(a). For the property factor, inven-

method to use to apportion partnership income,

beginning on or after January 1, 2009 may have a

tory in transit is deemed to be at its destination;

see Regulation 830 CMR 63.38.1 sec. 4(d) and 12.

net operating loss determined on a post-appor-

see Regulation 830 CMR 63.38.1 sec. 7(c).

Corporations engaged in substantial manufactur-

tionment basis. Such corporations (only) enter

Line 1b

ing (section 38 manufacturers) are required to ap-

that post-apportionment NOL on item 3(e), leaving

Property rented by the corporation is valued at eight

portion their net income based on sales factor only.

the amounts on 3(a) through 3(d) blank.

times the annual net rental rate paid less any sub-

Corporations other than section 38 manufacturers

Line 4

rentals received.

or mutual fund service corporations are required to

All corporations leave the amounts on lines 4(a)

apportion their net income as follows: sales factor

2. Payroll Factor

through 4(d) blank. Enter the corporation’s post-

equals 50%, property factor equals 25%, payroll

Line 2a

apportionment on line 4(e).

factor equals 25%.

Enter the total amount of wages, salaries, commis-

Line 5

To determine if a corporation qualifies as a section

sions, or any other compensation paid to employ-

38 manufacturer or mutual fund service corpora-

All corporations leave the amounts on lines 5(a)

ees. An employee’s compensation is allocated to

tion, see instructions for the registration section:

through 5(d) blank. Enter the corporation’s post-

Massachusetts, if any of the following apply:

line 2 of Form 355 or 355S.

apportionment on line 5(e).

◗ the employee’s service is performed within

If a corporation is a section 38 manufacturer or

Massachusetts;

Line 6

mutual fund service corporation, fill in the applica-

◗ the employee’s service is performed both in

Combine the amounts from all row (g) items,

ble oval. If a corporation is not a section 38 manu-

Massachusetts and in other state(s), but the non-

lines1 through 5.

facturer or a mutual fund service corporation, fill in

Massachusetts service is secondary to the Mass-

the oval for “Other.”

Line 7

achusetts service;

Mutual fund service corporations must complete

If the amount on Schedule E, line 25 is greater

◗ part of the employee’s service is performed in

a Schedule F based on mutual fund sales and a

than zero, enter that amount. Otherwise, enter

Massachusetts, and the service is controlled from

separate Schedule F based on non-mutual fund

zero.

a location in Massachusetts;

sales, if any. For further information on apportion-

◗ part of the employee’s service is performed in

Line 8

ment for mutual fund service corporations, see

Regulation 830 CMR 63.38.7.

Massachusetts, and the location of the service is not

Enter the smaller of line 6 or line 7. Also enter this

in a state in which some part of the service is per-

amount on Schedule E, line 26.

Corporations must complete all lines, regardless

formed, but the employee lives in Massachusetts.

of apportionment method used. Make certain that

Schedule F

complete information is entered for all apportion-

The total amount paid for compensation is com-

ment factors. A return which is incomplete will be

puted on the cash basis, as reported for unemploy-

considered insufficient.

ment purposes. A taxpayer that uses the accrual

Income Apportionment

method of accounting in computing its taxable

Mutual fund service corporations should complete

Line Instructions

net income may elect to use the accrual method in

a Schedule F for income from mutual fund sales if

determining the total amount of compensation paid

they made mutual fund sales to RIC’s with share-

in Massachusetts during the taxable year. For fur-

holders domiciled outside of Massachusetts.

1. Property Factor

ther information on how to elect the accrual method

Schedule F should be completed by all other corpo-

Line 1a

see Regulation 830 CMR 63.38.1 sec. 8(a).

rations (including mutual fund service corporations

For tax purposes, average value is based on orig-

reporting non-mutual fund sales) which have in-

3. Sales Factor

inal cost and is determined by averaging the prop-

come from business activities which is taxable both

erty values at the beginning and end of the taxable

For sales factors, enter the gross receipts of the cor-

in Massachusetts and in any other state. For pur-

year. If substantial changes occur during the tax-

poration with the exception of those receipts from

poses of this requirement, “taxable” has the mean-

able year, the Commissioner may require monthly

interest, dividends and the sale or other disposi-

ing set forth in the Apportionment of Income

Form 355s - Massachusetts S Corporation Excise Return - 2012 Page 13

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