Form 355 - Massachusetts Corporation Excise Return

Line by Line Information

imum tax, the corporation should make a payment

fund sales to Massachusetts based on the domicile

Form 355. The excise, balance due and refund

or payments equal to the minimum tax to safe-

of the shareholders in the fund. Effective July 1,

lines should be left blank and “RIC-Informational

guard against a possible underpayment penalty.

1997 mutual fund service corporations are allowed

Return” must be written across the front of the

to apportion their net income from mutual fund

return.

Note: Any corporation having $1 million or more

sales based solely on their sales factor. However, in

of U.S. taxable income in any of its three preced-

If the corporation is a Real Estate Investment Cor-

order to use the single sales factor apportionment

ing taxable years (as defined in IRC sec. 6655(g))

poration (REIT), which is an intangible property

method a mutual fund service corporation must

may only use its prior year tax liability to calculate

corporation, it is required to file Schedule RNW,

increase its workforce in Massachusetts by 5% a

its first quarterly estimated tax payment. Any re-

Reit Net Worth Calculation in place of Schedule D.

year for five years based on the 1996 employment

duction in the first installment payment that results

See TIR 06-6 for further information.

level unless adverse economic conditions exist.

from using this method must be added to its sec-

Taxable net income not derived from mutual fund

Line 4

ond installment payment.

sales is apportioned according to the statutory

If line 4 is “Yes” you are still be required to file

For more information on corporate estimated taxes,

three factor method.

Form 355 if this corporation has a taxable year

refer to Regulation 830 CMR 63B.2.2, and M.G.L.

that ends at a different time than the taxable year

A corporation is a mutual fund service corporation

Ch. 63B.

for which the combined report is being filed.

if it derives more than 50% of its gross income

from providing, directly or indirectly, management,

When two or more corporations are required to

Registration

distribution or administration services to or on be-

file a combined report, the taxable members’ ap-

half of a regulated investment company, and from

portioned shares of the combined income are

Information

trustees, sponsors and participants of employee

based the combined group’s taxable year. If not

benefit plans which have accounts in a regulated

all the members have the same taxable year, the

Line 2

investment company.

combined group’s taxable year is determined

A corporation is a section 38 manufacturer for any

under 830 CMR 63.32B.2 (11) (b).

The Department has issued further guidance on ap-

taxable year if it is engaged in manufacturing dur-

portionment for mutual fund service corporations;

Form 355U is used by the combined group to cal-

ing the taxable year and its manufacturing activity

see Regulation 830 CMR 63.38.7.

culate and pay the income excise due from the

during the taxable year is substantial. This applies

taxable members of a combined group. Form

If a corporation is qualified as a section 38 manu-

whether the corporation is a domestic manufactur-

355U and payment of the income measure of ex-

facturer or is a mutual fund service corporation,

ing corporation under M.G.L. Ch. 63, sec. 38C or a

cise is due on 15th day of the 3rd month follow-

check the applicable box and complete Schedule

foreign manufacturing corporation under M.G.L.

ing the close of the combined group’s taxable

F, Income Apportionment, accordingly. Section 38

Ch. 63, sec. 42B, and regardless of whether the

year. Members of such a group that are subject to

manufacturers and mutual fund service corpora-

corporation is classified as a manufacturing cor-

a non-income measure of excise under the provi-

tions must also complete and enclose Form F-2.

poration under M.G.L. Ch. 58, sec. 2 and Regula-

sions of M.G.L. Ch. 63, sec. 39 (including those S

Form F-2 is available at

tion 830 CMR 63.58.2.1.

corporations that are not taxed as financial insti-

The Department has issued further guidance on

The apportionment factor for corporations en-

tutions under M.G.L. Ch. 63 sec. 2D) are required

apportionment; see Regulation 830 CMR 63.38.1.

gaged in substantial manufacturing (section 38

to determine and pay the non-income measure of

manufacturers) is 100% of sales.

excise on the 15th day of the 3rd month following

Line 3

the close of their separate taxable year. If a mem-

A corporation's manufacturing activity is substan-

An R&D corporation is a business corporation

ber’s non-income measure of excise is due on the

tial for any taxable year if the corporation meets

whose principal business activity in Massachu-

same day as the combined report (if the member’s

any of the following tests:

setts is research and development and which (a)

taxable year ends at the same time as the com-

◗ The corporation derives 25% or more of its re-

derives more than two thirds of its gross receipts

bined group’s taxable year), the member will pay

attributable to Massachusetts from that activity or

ceipts for the taxable year from the sale of manu-

such non-income measure with the combined re-

(b) incurs more than two thirds of its expendi-

factured goods that the corporation manufac-

port and should not also submit form 355 for the

tures in that activity. Research and Development

tures; or

same taxable year.

corporations may be eligible for certain tax bene-

◗ The corporation pays 25% or more of its pay-

fits. See 830 CMR 64H.6.4.

If a member has a separate taxable year that ends

roll for the taxable year to employees working in

at a different time than the combined group’s tax-

A classified manufacturing corporation is a busi-

manufacturing operations and derives 15% or

able year, that member must file a separate return

ness corporation engaged in manufacturing in

more of its receipts for the taxable year from the

to pay the non-income portion of the excise. These

Massachusetts, whose manufacturing activities in

sale of manufactured goods that the corporation

members will file Form 355 or Form 355S (as ap-

Massachusetts are substantial and which has

manufactures; or

propriate) indicating on the face of such return

filed Form 355Q and had its manufacturing status

◗ The corporation uses 25% or more of its tangi-

that they are subject to combined reporting for

approved by the Commissioner. A corporation

ble property in manufacturing during the taxable

their income measure of excise and exclude from

may be a section 38 manufacturer based on its

year and derives 15% or more of its receipts for

that separate return the income that is reported on

worldwide manufacturing activities but not be a

the taxable year from the sale of manufactured

the group’s Form 355U.

classified manufacturer if those manufacturing

goods that the corporation manufactures; or

activities occur outside of Massachusetts. Classi-

The separate non-income measure return, if re-

◗ The corporation uses 35% or more of its tangible

fied manufacturing corporations may be eligible

quired, must include Schedules A, B, C, D and

property in manufacturing during the taxable year.

for certain tax benefits. See 830 CMR 63.58.2.1.

Schedule CD along with any supporting sched-

ules required for some entries as referenced on

Effective January 1, 1997, mutual fund service

A Regulated Investment Company (RIC) must file

Schedule A. A corporation that would be eligible

corporations are required to attribute their mutual

an informational return and may do so by filing

Form 355 - Massachusetts Corporation Excise Return - 2012 Page 8

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