Form 355 - Massachusetts Corporation Excise Return

Line by Line Instructions

cluding safe harbor methods, see Regulation 830

shipped to any buyer, including the U.S. govern-

denominator of which is the number of times that

CMR 63.38.1 sec. 7(d).

ment, in Massachusetts.

such factors are used in the numerator.

◗ In cases where only one of the three apportion-

Construction in progress is generally excluded

Line 3b

from the property factor; see Regulation 830 CMR

ment factors (property, payroll, sales) is applica-

Sales of tangible personal property are assignable

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

ble, the taxable net income is apportioned solely

to Massachusetts if the selling corporation is not

tory in transit is deemed to be at its destination;

by that factor with its respective weight, and the

taxable in the state of the buyer and the property is

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

denominator is the number of times the factor is

not sold by an agent or agencies chiefly situated

used in the numerator.

at, connected with, or sent out from premises for

Line 1b

the transaction of business owned or rented by the

Note: An apportionment factor should not neces-

Property rented by the corporation is valued at eight

corporation outside Massachusetts. A buyer for

sarily be considered inapplicable if its Massachu-

times the annual net rental rate paid less any sub-

this item includes the U.S. government.

setts total (lines 1c, 2a or 3f) is zero.

rentals received.

Sales of tangible personal property are not assign-

If you are claiming an exception on Schedule ABI or

2. Payroll Factor

able to Massachusetts if:

ABIE, do the following to see if a factor applies.

Line 2a

Complete Schedule E through line 19 without refer-

◗ the property is shipped or delivered to a buyer

Enter the total amount of wages, salaries, commis-

ence to the add back exception but less the amount

in a foreign country; or

sions, or any other compensation paid to employ-

of deductible and intangible expense stated in line

◗ the property is sold to any branch or instrumen-

ees. An employee’s compensation is allocated to

1 of the respective Schedule ABI or ABIE.

tality of the U.S. government for resale to a foreign

Massachusetts, if any of the following apply:

If any of the apportionment totals for “Worldwide”

government.

◗ the employee’s service is performed within

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

Line 3c

Massachusetts;

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

Sales of services, other than mutual fund sales or

Massachusetts apportionment percentage.

◗ the employee’s service is performed both in

other intangibles, are assigned to Massachusetts

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

if the income producing activity is performed in

Schedule H.

Massachusetts service is secondary to the Mass-

Massachusetts, or if a greater portion of the activ-

achusetts service;

ity, based on performance cost, occurs in Mass-

Investment

◗ part of the employee’s service is performed in

achusetts than in any other state.

Massachusetts, and the service is controlled from

Mutual fund sales are assigned to Massachusetts

Tax Credit

a location in Massachusetts;

as follows:

◗ part of the employee’s service is performed in

◗ mutual fund sales are determined separately for

and Carryovers

Massachusetts, and the location of the service is not

each RIC from which the mutual fund service cor-

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

poration receives fees for mutual fund services;

Corporations claiming an Investment Tax Credit

formed, but the employee lives in Massachusetts.

◗ the mutual fund sales for each RIC are multi-

and corporations taking a credit carryforward from

The total amount paid for compensation is com-

a prior year must file Schedule H.

plied by a fraction, the numerator of which is the

puted on the cash basis, as reported for unemploy-

average number of shares owned by the RIC’s

ment purposes. A taxpayer that uses the accrual

Part 1. Calculation of Current-Year

shareholders domiciled in Massachusetts at the

method of accounting in computing its taxable

Investment Tax Credit Generated

beginning and end of the RIC’s taxable year that

net income may elect to use the accrual method in

ends within the mutual fund service corporation’s

Lines 1a through 1d

determining the total amount of compensation paid

taxable year, and the denominator of which is the

Only R&D corporations should complete these

in Massachusetts during the taxable year. For fur-

average number of shares owned by all of the

lines. All others leave blank. R&D corporations

ther information on how to elect the accrual method

RIC’s shareholders for the same period; and

are eligible for the credit only if two thirds of their

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

◗ the resulting amounts are totaled for all RICs.

Massachusetts receipts are derived from the pro-

3. Sales Factor

vision of research and development services or

Line 3d

from royalties or fees from licensing patents,

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

Rents from property located or used in Mass-

know-how or other technology developed from re-

poration with the exception of those receipts from

achusetts are assigned to Massachusetts. Royal-

search and development. See Regulation 830

interest, dividends and the sale or other disposi-

ties derived from the use of intangible property are

CMR 64H.6.4 for further information.

tion of securities. Any receipts resulting in allocable

assigned to the state to the extent that the prop-

income must be excluded. For further information,

Lines 2a through 2h

erty is used in the state.

see Regulation 830 CMR 63.38.1 sec. (9)(a).

Enter the total cost basis of all qualified deprecia-

If using a three-factor apportionment formula, and

Also, in the case of the sale, exchange or other dis-

ble property placed in service during the tax year

one or more factors are inapplicable the following

position of a capital asset used in the taxpayer’s

by Schedule A category. Qualifying property must

shall apply:

trade or business, enter the gain from the transac-

be tangible property, including buildings but ex-

◗ In cases where only two of the three apportion-

tion and not the gross receipts. For further informa-

cluding motor vehicles and other property taxable

ment factors (property, payroll, sales) are applica-

tion, see Regulation 830 CMR 63.38.1 sec. (9)(b).

under Ch. 60A, used by the corporation in Mass-

ble, the taxable net income is apportioned by a

achusetts, situated in the Commonwealth on the

Line 3a

fraction, the numerator of which is the remaining

last day of the taxable year and depreciable under

Sales of tangible personal property are assignable

two factors with their respective weights and the

Section 167 of the IRC with a useful life of four

to Massachusetts if the property is delivered or

Form 355 - Massachusetts Corporation Excise Return - 2012 Page 13

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