Form 355 - Massachusetts Corporation Excise Return

Line by Line Instructions

Line 12a

property corporations must complete Schedule C

by the RIC or REIT, or indirectly, as through a sub-

(and omit Schedule D) and intangible property cor-

sidiary or affiliate of the taxpayer.

Enter in line 12a the total of capital stock and equity

porations must complete Schedule D (and omit

contributions of subsidiary corporations 80% or

The total dividends amount on Schedule E-1, line

Schedule C). Net book values should be used in

more owned. If an amount other than “0” is entered

1 is derived from the amount shown on U.S.

completing all schedules.

in line 12a, Schedule A-1, Investments in Subsid-

Form 1120, Schedule C, line 19, less any divi-

iaries, must be completed.

dends received directly or indirectly from RICs or

Schedule B

REITs as well as any other dividends for which

Line 12b

Schedule B is used to calculate whether a corpo-

deduction is not allowed under Massachusetts

ration is a tangible or intangible property corpora-

Enter in line 12b the value of capital stock invest-

law. The amounts excluded from line 1 are also ex-

tion. Beginning in 2004, taxpayers no longer have

ments with less than 80% ownership and also any

cluded from line 8. The dividends shown on lines

the option of calculating the non-income measure

other investment entity such as a partnership.

2 through 6 should not be excluded from line 1,

as a business corporation. To reflect this legisla-

as they will be separately subtracted from line 1 in

Line 14

tive change, both Schedule B and D have been re-

determining the amount of line 8. For further infor-

duced in length. If line 15 is 10% or greater,

If the reserve for bad debt exceeds 2% of accounts

mation, see TIR 04-10.

complete Schedule C. If line 15 is less than 10%,

receivable, a complete explanation to enable a re-

A schedule showing payers, amounts and percent

complete Schedule D. The maximum entry allowed

view and determination of the proper amount al-

of voting stock owned by class of stock must be

on line 15 is 9.999999.

lowable must be available upon request.

available upon request.

Schedule C

Line 15

Schedule E.

If Schedule B, line 15 is 10% or greater, the cor-

Enter the amount from Schedule A-2, Intercom-

poration must complete Schedule C using net book

pany Receivables, line 29.

values to determine the non-income measure of the

Taxable Income

Line 17

excise. Omit Schedule D.

Enter here the value of any assets not included in

Mutual fund service corporations eligible to ap-

Schedule D

lines 1 through 16. Examples include, but are not

portion their income under M.G.L. Ch. 63, sec. 38

Schedule D is used by a corporation to calculate its

limited to, goodwill and company patents.

(m) must complete two separate copies of Sched-

non-income measure excise on the basis of net

ule E: (1) for income derived from mutual fund

Line 19a

worth. If line 15 of Schedule B is less than 10%,

sales; and (2) for non-mutual fund sales income, if

complete this schedule. Corporations are allowed

Enter the value of mortgages on Massachusetts real

any. Taxable net income from mutual fund sales is

to deduct the value of investments in, and ad-

estate, motor vehicles, machinery owned by a cor-

gross income from mutual fund sales less: (1) any

poration which is not classified as a manufacturing

vances to, Massachusetts and foreign subsidiaries.

deductions directly traceable to its mutual fund

corporation, and other tangible personal property

To be a subsidiary, the parent must own 80% or

sales: and (2) a portion of other allowable deduc-

located in Massachusetts and subject to local tax-

more of the voting stock of the corporation in ac-

tions. Other allowable deductions consist of deduc-

ation. Mortgages do not include conditional sales,

cordance with IRC sec. 1504.

tions not directly traceable to mutual fund sales or

pledges or other types of security interest.

non-mutual fund sales. To determine the deduct-

Schedule E-1.

ible amount of its other allowable deductions a mu-

Line 22

tual fund service corporation must multiply the

Enter the amount from Schedule A-3, Intercom-

Dividends Deduction

total amount of its other allowable deductions by a

pany Payables, line 29.

fraction, the numerator of which is the mutual fund

Massachusetts corporate excise law does not al-

service corporation’s gross income derived from

Schedules B, C

low the dividends received deduction allowed under

mutual fund sales for the taxable year and the de-

the IRC. However, a deduction is generally allowed

nominator of which is the mutual fund service cor-

and D. Tangible

for 95% of the value of dividends received except:

poration’s total gross income for the taxable year.

Taxable net income from non-mutual fund sales

◗ dividends from ownership of shares in a

or Intangible

consists of any taxable net income not derived

corporate trust engaged in business in the

from mutual fund sales.

Commonwealth;

Classification

If a corporation is not a mutual fund service corpo-

◗ dividends resulting from deemed or actual dis-

ration, 100% of sales, profits, and income should

tributions (except actual distributions of previously

and Calculation

be entered in lines 1 through 13. If the corporation

taxed income) from a DISC which is not wholly-

has income from business activities which is tax-

owned; or

of Non-Income

able both in Massachusetts and any other state,

◗ dividends from any class of stock if the corpo-

Schedule F should be completed and the appor-

ration owns less than 15% of the voting stock of

tionment percentage entered in line 22.

Measure

the payer corporation.

Line 4

Dividends received from a Regulated Investment

Schedules B, C and D are used to calculate the

Enter U.S. taxable income before deducting net op-

Company (RIC) or Real Estate Investment Trust

non-income measure of the Massachusetts cor-

erating loss or other special deductions. If the cor-

(REIT) are not eligible for the dividends received

porate excise. Schedule B is used to determine

poration is the parent of a DISC, income should be

deduction, whether the dividend is paid directly

whether a corporation is a tangible or intangible

reported with no allocation to the DISC.

property corporation. Once determined, tangible

Form 355 - Massachusetts Corporation Excise Return - 2012 Page 10

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