Form Bca - Brownfields Credit Application - 2012 Page 2
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3Form BCA Instructions
What is the Brownfields Credit?
Financial Aid Received by All Taxpayers
Non-profit organizations and taxpayers subject to tax under General
Taxpayers may claim this credit even if they receive financial assist-
Laws chapters 62 and 63 are allowed a credit for incurring eligible
ance from the Brownfields Development Fund or from the Redevel-
costs to remove oil or hazardous materials on property the taxpayer
opment Access to Capital (RAC) Program. However, the amount of
owns or leases for business purposes and which is located within an
state funds received from either of these funds must be deducted
economically distressed area. See G.L. c. 62, sec. 6(j) and G.L. c.
from the expense base for which the credit is available.
63, sec. 38Q. In general, the amount of the credit will be either 25%
With reference to RAC, the amount of state financial assistance is
or 50% of certain environmental response and removal costs in-
calculated as the amount of state funds paid on behalf of the bor-
curred between August 1, 1998 and January 1, 2014, provided that
rower for participation in the program. If the taxpayer has borrowed
the applicant commences and diligently pursues an environmental
funds subject to a state guarantee in order to finance the expenses
response action before August 5, 2013.
of remediation, the amount of the loan is permitted to be included in
the expense base for which the credit is available. However, if the
Who is Eligible for the Credit?
borrower defaults on the loan and the guarantee is invoked, any
Only a non-profit organization or taxpayer who is an eligible person
credit taken for the amount of the loan will be recaptured as taxes
as defined in G.L. c. 21E, s. 2 and is not subject to any enforcement
due in the year the loan is paid.
action pursuant to c. 21E may receive a credit.
Line 1. Enter the percentage of costs with respect to the assessed
An eligible person is an owner or operator of a site from which there
value of the property prior to remediation. Please note that the net
has been a release of oil or hazardous material who did not cause or
response and removal costs must be equal to or greater than 15%
contribute to the release and did not own or operate the site at the
of the assessed value of the property, including any improvements
time of the release.
thereon, prior to remediation to qualify for the credit.
What Properties are Eligible for the Credit?
Line 2. Enter the net response and removal costs incurred. The
Eligible property where all three conditions must be met:
Brownfields Act states that eligible costs are net response and re-
• The property is owned or leased by the applicant for business pur-
moval costs paid by the taxpayer for the purpose of achieving a
poses.
permanent solution or remedy operation status in compliance with
chapter 21E. Note that any eligible costs must have been incurred
• The property has been reported to the Department of Environ-
while the taxpayer owned the property.
mental Protection (DEP).
Note: See below for a list of eligible costs.
• The property is located in an economically distressed area. A list
of economically distressed areas is available from the DEP website
Line 3. Enter a brief description of the environmental response ac-
at
tion to which the eligible costs relate.
Limitations on the Credit
Eligible Costs
There are two types of limitations on the credit:
The Brownfields Act states that eligible costs are net response and
removal costs paid by the taxpayer for the purpose of achieving a
• Fifty-percent limitation for chapter 62 taxpayers: the maximum
permanent solution or remedy operation status in compliance with
amount of credit that may be taken may not exceed fifty percent
chapter 21E. The Department in conjunction with DEP has deter-
(50%) of the tax liability for the taxable year;
mined that the costs of the following activities are eligible for the
• Fifty-percent limitation for business corporations: the maximum
Brownfields credit when performed as part of a response action con-
amount of credit that may be taken may not exceed fifty percent
ducted for the purpose of achieving a permanent solution or rem-
(50%) of the excise tax for the taxable year;
edy operation status:
Minimum excise limitation for business corporations: the credit may
• Any assessment, removal, or containment action as required
not be used to reduce the tax liability below the minimum excise
under c. 21E;
which is currently $456.
• Assessment activities performed prior to notification that identify
an obligation to notify DEP;
Carryover of Credit
An unused credit may be carried over for up to five succeeding tax
• Preparation of phase reports, status reports, or other submittals
years. However, in no event may the taxpayer apply the credit in any
required by the Massachusetts Contingency Plan (MCP) directly re-
taxable year in which it has ceased to maintain the remedy operation
lated to the response action, pursuant to 310 CMR 40.0000;
status or the permanent solution for which the credit was granted.
• Post-RAO response actions undertaken voluntarily or as required
Corporations Filing Combined Returns
by the MCP;
Pursuant to M.G.L. c. 63, § 32B, for tax years beginning on or after
• Removal, assessment, containment, treatment, transport, storage,
January 1, 2009, a credit that may be validly claimed by a taxable
reuse, recycling and/or disposal of soil, groundwater, surface water
member of a combined group and that is attributable to the combined
or sediments that contain oil and/or hazardous materials;
group’s unitary business may be shared with the other taxable mem-
• Development and implementation of assessment and remediation
bers of the combined group to the extent such sharing of the credit
plans, including pilot testing and treatability tests;
is consistent with the statutory requirement for claiming the credit,
taking into account the nature of the business and activities of each
• Sampling and analysis of released oil and hazardous materials and
of the taxable members that seek to share the credit.
environmental media;
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