Form 355 - Massachusetts Corporation Excise Return

General Information

◗ maintaining a sample or display area for an ag-

the close of the parent’s taxable year. DlSCs which

tle vans must be used for transporting employees

gregate of fourteen calendar days or less during

are not wholly-owned, either directly or indirectly,

and students from their homes, or public trans-

the tax year, provided that no sales or other activ-

are taxable as regular business corporations.

portation facilities, to their places of employment

ities inconsistent with solicitation take place;

or study.

Massachusetts generally adopts the IRC treat-

◗ soliciting of sales by an in-state resident repre-

ment of transactions between FSCs and share-

To claim the Vanpool Credit, Schedule VP must be

sentative who maintains no in-state sales office or

holder corporations. For additional information

completed. The amount of the credit is then entered

place of business; and

see Regulation 830 CMR 63.38G.2.

on Schedule CR.

◗ training or holding periodic meetings of sales

Economic Opportunity Area Credit

Are There Special

representatives.

A credit of 5% of the cost of qualifying property

For further information on corporate nexus, refer

purchased for business use within an Economic

Tax Credits Available

to Regulation 830 CMR 63.39.1.

Opportunity Area (EOA) is available to businesses.

To qualify for the EOA credit, the property must be

In Massachusetts?

What Are the

used exclusively in a certified project in an EOA

and must meet the same tests (4 years useful life,

Yes. Massachusetts offers several special credits

Differences Between

etc.) imposed for the 3% ITC. A certified project is

to corporations.

a project that has been approved by the Economic

Assistance Coordinating Council (EACC). If a cor-

Under M.G.L. Ch. 63, sec. 32C, a corporation’s

the Massachusetts

poration participates in a qualified project and is

credits may not offset more than 50% of its ex-

also eligible for the 3% ITC (see above), the cor-

cise. Any credits not utilized as a result of this

Corporate Excise

poration may claim either the ITC or the EOAC,

provision may be carried over for an unlimited

but not both with respect to each item of qualify-

number of years. This provision does not apply to

and the IRC?

ing property.

the Research Credit, the Harbor Maintenance Tax

Credit, Low-Income Housing Credit, Historic Re-

The 5% EOA credit cannot offset more than 50%

Gross income for corporate excise purposes is the

habilitation Credit, the Film Incentive Credit or the

of the excise due nor reduce the excise below the

same as that defined under the Internal Revenue

Medical Device Credit.

minimum tax. Any unused credit may be carried

Code (IRC), as amended and in effect for the tax-

forward for ten years.

Investment Tax Credit

able year, with the following additions:

To claim the credit, Schedule EOAC must be com-

Manufacturing corporations and corporations en-

◗ interest from the bonds, notes and evidences of

pleted and the amount of the credit entered on

gaged primarily in research and development, agri-

indebtedness of any state, including Massachusetts.

Schedule CR.

culture or commercial fishing are allowed a credit

Net income is gross income less the deductions,

of 3% of the cost of depreciable real and tangible

Research Credit

but not the credits, allowable under the U.S. IRC.

property. Such property must have a useful life of

The following deductions, however, are not allowed:

A credit is allowed for corporations which made

four years or more. The property must be used

basic research payments and/or incurred quali-

◗ dividends received, except as permitted under

and located in Massachusetts on the last day of

fied research expenses conducted in Massachu-

Massachusetts law (See Schedule E-1 instruc-

the taxable year. A corporation cannot take the

setts during the taxable year. A corporation taking

tions); and

credit on property which it leases to another. A

the research credit is limited in the amount that

corporation can take the credit on property which

◗ taxes on or measured by income, franchise taxes

can be taken against the excise in any year. The

it leases from another (for property leased and

measured by net income, franchise taxes for the

credit cannot reduce the tax to less than $456.

placed in service on or after July 1, 1994). Gener-

privilege of doing business and capital stock

The amount of credit is equal to:

ally, eligible corporate lessees making qualifying

taxes imposed by any state or U.S. territory.

leasehold improvements may claim the credit.

◗ 100% of the first $25,000 of excise; and

The deduction for losses sustained in other taxable

Note: Motor vehicles and trailers acquired on or

◗ 75% of any amount of excise remaining after

years is allowed subject to certain restrictions. See

after January 1, 1988 and subject to the motor

Schedule E-2 for further information.

the first $25,000.

vehicle excise do not qualify for the Investment

DOR and the IRS maintain an extensive exchange

The deduction allowed to a corporation for any

Tax Credit.

program, routinely sharing computer tapes and

research expenses generating a Massachusetts

A corporation may carry over to the next succeed-

audit results. Discrepancies between income and

Research Credit must be reduced by the amount

ing three years any unused portion of its Invest-

deductions reported federally and on this return,

of the credit generated. This amount is added

ment Tax Credit (ITC). To claim the ITC, Schedule

except those allowed under state law, will be

back to income on Schedule E, line 13.

H must be completed where the credit is calcu-

identified and may result in a state audit or fur-

Any corporation which is a member of a combined

lated. The amount of the credit is then entered on

ther investigation.

group may share excess research credits with

Schedule CR.

If the corporation is the parent of a wholly-owned

other members of the combined group. Corpora-

DISC, the U.S. net income of the parent shall be re-

tions which are members of a controlled group or

Vanpool Credit

ported to Massachusetts with no allocation of in-

which are under common control with any trade

Business corporations are allowed a credit of

come, deductions, assets or liabilities made to the

or business (whether or not incorporated) are

30% of the cost incurred during the taxable year

DISC. The DISC income, which must be included

treated as a single taxpayer for purposes of deter-

for the purchase or lease of company shuttle vans

in the parent’s return, must be for the same tax-

mining the allowable Research Credit.

used in the Commonwealth as part of an em-

able year or the taxable year immediately following

ployer-sponsored ridesharing program. The shut-

Form 355 - Massachusetts Corporation Excise Return - 2012 Page 4

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