TAXATION OF CORPORATIONS

M.G.L. pt. Part I, tit. Title IX, ch. c. 63

in effect

M.G.L. c. 63, § 1 Definitions

c. 63, § 1. Definitions Section 1. When used in sections one to two A, inclusive, and section thirty-eight B, the following words shall, unless the context otherwise requires, have the following meaning: ''Billing address'', the location indicated in the books and records of the taxpayer on the first day of the taxable year, or on such later date in the taxable year when the customer relationship began, as the address where any notice, statement or bill relating to a customer's account is mailed. ''Borrower or credit card holder located in this commonwealth'', (a) a borrower, other than a credit card holder, that is engaged in a trade or business which maintains its commercial domicile in this commonwealth; or (b) a borrower that is not engaged in a trade or business or a credit card holder whose billing address is in this commonwealth. ''Code'', the Internal Revenue Code of the United States, as amended and in effect for the taxable year, unless otherwise provided. ''Commercial domicile'', (a) the headquarters of the trade or business, that is, the place from which the trade or business is principally managed and directed; or (b) if a taxpayer is organized under the laws of a foreign country, or of the Commonwealth of Puerto Rico, or any territory or possession of the United States, such taxpayer's commercial domicile shall be deemed to be the state of the United States or the District of Columbia from which such taxpayer's trade or business in the United States is principally managed and directed. It shall be presumed, subject to rebuttal, that the location from which the taxpayer's trade or business is principally managed and directed is the state of the United States or the District of Columbia to which the greatest number of employees are regularly connected or out of which they are working, irrespective of where the services of such employees are performed, as of the last day of the taxable year. ''Compensation'', wages, salaries, commissions and any other form of remuneration paid to employees for personal services that are included in such employee's gross income under the Internal Revenue Code. In the case of employees not subject to the Internal Revenue Code, such as those employed in foreign countries, the determination of whether such payments would constitute gross income to such employees under the Internal Revenue Code shall be made as though such employees were subject to the Internal Revenue Code. ''Credit card'', credit, travel or entertainment card. ''Credit card issuer's reimbursement fee'', the fee a taxpayer receives from a merchant's bank because one of the persons to whom the taxpayer has issued a credit card has charged merchandise or services to the credit card. ''Employee'', with respect to a particular taxpayer, any individual who, under the usual common-law rules applicable in determining the employer-employee relationship, has the status of an employee of that taxpayer. ''Engaged in business in the commonwealth'', (a) having a business location in the commonwealth; (b) having employees, representatives or independent contractors conducting business activities on its behalf in the commonwealth; (c) maintaining, renting or owning any tangible or real property in the commonwealth; (d) regularly performing services in the commonwealth; (e) regularly engaging in transactions with customers in the commonwealth that involve intangible property and result in income flowing to the taxpayer from residents of the commonwealth; (f) regularly receiving interest income from loans secured by tangible personal or real property located in the commonwealth; or (g) regularly soliciting and receiving deposits from customers in the commonwealth. With respect to the activities described in clauses (d) to (g), inclusive, activities shall be presumed, subject to rebuttal, to be conducted on a regular basis within the commonwealth, if any of such activities are conducted with one hundred or more residents of the commonwealth during any taxable year or if the taxpayer has ten million dollars or more of assets attributable to sources within the commonwealth, or has in excess of five hundred thousand dollars in receipts attributable to sources within the commonwealth. ''Financial institution'', (a) any bank, banking association, trust company, federal or state savings and loan association, including all banks for cooperatives organized under the United States Farm Credit Act of 1933, whether of issue or not, existing by authority of the United States, or any state, or a foreign country, or any law of the commonwealth; (b) any other institution, association or entity, the deposits or accounts of which are insured under the Federal Deposit Insurance Act or by the Federal Deposit Insurance Corporation, any institution, association or entity, which is a member of a federal Home Loan Bank, excluding corporations described in section 1 of chapter 171, any other bank or thrift institution incorporated or organized under the laws of a state which is engaged in the business of receiving deposits, any corporation organized under the provisions of 12 USC 611–631 and 12 USC 3101; (c) any corporation subject to chapter 167A, or registered under the Federal Bank Holding Company Act of 1956, or registered as a savings and loan holding company under federal law, but excluding a diversified savings and loan holding company unless it satisfies the definition of a financial institution elsewhere herein, including any subsidiary which participates in the filing of a consolidated return of income to the federal government; (d) any corporation subject to supervision by the division of banks including but not limited to corporations described in section 24 of chapter 93, sections 96 to 104, inclusive, or section 114C of chapter 140; section 38 of chapter 167; section 5 of chapter 167B; chapter 169A; chapter 255B; chapter 255C; chapter 255D; and chapter 255E; or (e) any other corporation organized under the laws of the United States, the commonwealth or any other state or a foreign country which, in substantial competition with financial institutions as defined in any or all of clauses (a) to (d), inclusive, derives more than 50 per cent of its gross income, excluding nonrecurring, extraordinary items, from loan origination, from lending activities, including discounting obligations, or from credit card activities; but, corporations described in section 1 of chapter 171 shall be excluded from the definition of financial institution. The term ''corporation'' as used in this definition shall mean any corporation, or any ''other entity'' as defined in section 1.40 of chapter 156D, whether the corporation or other entity may be formed, organized, or operated in or under the laws of the commonwealth or any other jurisdiction, that is classified for the taxable year as a corporation for federal income tax purposes. ''Gross income'', gross income as defined under the provisions of the Internal Revenue Code, as amended and in effect for the taxable year, plus the interest from bonds, notes and evidences of indebtedness of any state, including this commonwealth. Gross income shall be determined without regard to section 108(i) of the Code. ''Gross rents'', the actual sum of money or other consideration payable for the use or possession of property. ''Gross rents'' shall include, but not be limited to: (a) any amount payable for the use or possession of real property or tangible property whether designated as a fixed sum of money or as a percentage of receipts, profits or otherwise; (b) any amount payable as additional rent or in lieu of rent, such as interest, taxes, insurance, repairs or any other amount required to be paid by the terms of a lease or other arrangement; and (c) a proportionate part of the cost of any improvement to real property made by or on behalf of the taxpayer which reverts to the owner or lessor upon termination of a lease or other arrangement. The amount to be included in gross rents shall be the amount of amortization or depreciation allowed in computing the taxable income base for the taxable year; provided, however, where a building is erected on leased land by or on behalf of the taxpayer, the value of the land shall be determined by multiplying the gross rent by eight and the value of the building shall be determined in the same manner as if owned by the taxpayer. (d) the following shall not be included in the term ''gross rents'': (i) reasonable amounts payable as separate charges for water, steam, and electric service furnished by the lessor; (ii) reasonable amounts payable as service charges for janitorial services furnished by the lessor; (iii) reasonable amounts payable for storage, provided such amounts are payable for space not designated and not under the control of the taxpayer; and (iv) that portion of any rental payment which is applicable to the space subleased from the taxpayer and not used by it. ''Loan'', any extension of credit resulting from direct negotiations between the taxpayer and its customer, or the purchase, in whole or in part, of such extension of credit from another. Loans include participations, syndications and leases treated as loans for federal income tax purposes. Loans shall not include: properties treated as loans under section 595 of the Internal Revenue Code; futures or forward contracts; options; notional principal contracts such as swaps; credit card receivables, including purchased credit card relationships; non-interest bearing balances due from depository institutions; cash items in the process of collection; federal funds sold; securities purchased under agreement to resell; assets held in a trading account; securities; interests in a REMIC as defined in section 860D of the Internal Revenue Code, or other mortgage-backed or asset-backed security; and other similar items. ''Loan secured by real property'', a loan in which fifty percent or more of the aggregate value of the collateral, when valued at fair market value as of the time the original loan was incurred, was real property. ''Merchant discount'', the fee or negotiated discount charged to a merchant by the taxpayer for the privilege of participating in a program whereby a credit card is accepted in payment for the merchandise or services sold to the card holder. ''Net income'', gross income, other than ninety-five percent of dividends received in any taxable year beginning on or after January first, nineteen hundred and ninety-nine from or on account of the ownership of any class of stock if the financial institution owns fifteen percent or more of the voting stock of the institution paying the dividend, less the deductions, but not the credits allowable under the provisions of the Internal Revenue Code, as amended and in effect for the taxable year. The term 'dividends received' shall be treated in the same manner as under the Code, as amended and in effect for the taxable year. The term ''dividends received'', as it relates to distribution from a real estate investment trust, as provided in sections 856 to 859, inclusive, of the Code, shall be treated in the same manner as under the Code, as amended and in effect for the taxable year. For purposes of this section, any dividend received directly or indirectly from the real estate investment trust shall not be treated as a dividend. Any dividend received directly or indirectly from a regulated investment company, as provided in sections 851 to 855, inclusive, of the Code, shall not be included as part of the dividends received deduction otherwise available under this section. For purposes of this definition, amounts included in federal gross income pursuant to sections 951 and 951A of the Code shall be treated as dividends received. For taxable years beginning on or after January first, nineteen hundred and ninety-nine, the provisions of section two hundred and ninety-one of said Code shall not apply; and the provisions of section one hundred and seventy-one (a)(2) and two hundred and sixty-five of said Code shall only apply to the extent that the income to which the deductions relate is excludable from gross income. Deductions with respect to the following items, however, shall not be allowed except as otherwise provided: (a) dividends received, except as otherwise provided; (b) losses sustained in other taxable years; (c) taxes on or measured by income, franchise taxes measured by net income, franchise taxes for the privilege of doing business and capital stock taxes imposed by a state; (d) the deduction allowed by section 168 (k) of the Code; (e) the deduction allowed by section 199 of the Code; (f) the deduction described in section 163(e)(5) of the Code, to the extent increased by amendments to section 163(e)(5)(F) and section 163(i)(1) of the Code, inserted by section 1232 of the American Recovery and Reinvestment Act of 2009; or (g) the deductions allowed by sections 245A, 250, and 965(c) of the Code. ''Participation'', an extension of credit in which an undivided ownership interest is held on a pro rata basis in a single loan or pool of loans and related collateral. In a loan participation, the creditor originator initially makes the loan and then subsequently resells all or a portion of it to other lenders. The participation may or may not be known to the borrower. ''Person'', an individual, estate, trust, partnership, corporation and any other business entity. ''Principal base of operations'', with respect to transportation property means the place of more or less permanent nature from which said property is primarily directed or controlled. With respect to an employee, the ''principal base of operations'' means the place of more or less permanent nature from which the employee primarily (1) starts his work and to which he customarily returns in order to receive instructions from his employer or (2) (if (1) is not applicable) communicates with his customers or other persons, or (3) (if (1) and (2) are both not applicable) performs any other functions necessary to the exercise of his trade or profession. ''Real property owned'' and ''tangible personal property owned'', real and tangible personal property respectively, (1) on which the taxpayer may claim depreciation for federal income tax purposes, or (2) property to which the taxpayer holds legal title and on which no other person may claim depreciation for federal income tax purposes, or could claim depreciation if subject to federal income tax. Real and tangible personal property do not include coin, currency, or property acquired in lieu of or pursuant to a foreclosure. ''Regular place of business'', an office at which the taxpayer carries on its business in a regular and systematic manner and which is consistently maintained, occupied and used by employees of the taxpayer. ''State'', a state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States; any foreign country; or a political subdivision of any of the foregoing. ''Syndication'', an extension of credit in which two or more persons fund and each person is at risk only up to a specified percentage of the total extension of credit or up to a specified dollar amount. ''Taxable'', (a) that a taxpayer is subject in another state to a net income tax, a franchise tax measured by net income, a franchise tax for the privilege of doing business, a corporate stock tax, including a bank shares tax, a single business tax, or an earned surplus tax, or any tax which is imposed upon or measured by net income; or (b) that another state has jurisdiction to subject the taxpayer to any of such taxes regardless of whether, in fact, the state does or does not. ''Taxable year'', any fiscal or calendar year or period for which the taxpayer is required to make a return to the federal government; or the period for which a return is made by the taxpayer, if a return is made (1) for a period less than twelve months, or (2) for a period for which no return to the federal government is required. ''Taxpayer'', a financial institution engaged in business in the commonwealth. ''Transportation property'', vehicles and vessels capable of moving under their own power, including, but not limited to, aircraft, trains, water vessels and motor vehicles, as well as any equipment or containers attached to such property, such as rolling stock, barges, trailers or the like.

M.G.L. c. 63, § 2 Financial institutions; excise rate

c. 63, § 2. Financial institutions; excise rate Section 2. (a) Except as provided in subsections (b) and (d), every financial institution engaged in business in the commonwealth shall pay, on account of each taxable year, an excise measured by its net income determined to be taxable under section two A at the following rate: taxable years beginning on or after January first, nineteen hundred and ninety-five but before January first, nineteen hundred and ninety-six, twelve and thirteen hundredths percent; on or after January first, nineteen hundred and ninety-six but before January first, nineteen hundred and ninety-seven, eleven and seventy-two hundredths percent; on or after January first, nineteen hundred and ninety-seven but before January first, nineteen hundred and ninety-eight, eleven and thirty-two hundredths percent; on or after January first, nineteen hundred and ninety-eight but before January first, nineteen hundred and ninety-nine, ten and ninety-one hundredths percent; on or after January first, nineteen hundred and ninety-nine, ten and one-half percent; provided, however, that the excise imposed hereunder shall be no less than four hundred and fifty-six dollars. (b) Any corporation taxable under this section shall pay an excise measured by its net income determined to be taxable under section 2A at the following rates:— (i) for each taxable year beginning on or after January 1, 1995, but before January 1, 2010, 10.5 per cent; (ii) for each taxable year beginning on or after January 1, 2010, but before January 1, 2011, 10.0 per cent; (iii) for each taxable year beginning on or after January 1, 2011, but before January 1, 2012, 9.5 per cent; or (iv) for each taxable year beginning on or after January 1, 2012 and thereafter, 9.0 per cent; provided, however, that in no case shall the excise imposed under this section amount to less than $456. (c) The commissioner is hereby authorized to adjust the net income of any taxpayer in accordance with the provisions of and the rules and regulations under section 482 of the Internal Revenue Code, as amended from time to time. (d) Any financial institution that is an S corporation, as defined in section 1361 of the Code, shall not be subject to the tax provided in subsections (a) and (b) and shall instead be subject to the excise in section 2B.

M.G.L. c. 63, § 2A Financial institutions; determination of net income

c. 63, § 2A. Financial institutions; determination of net income Section 2A. The commissioner shall determine the part of the net income of a financial institution derived from business carried on within the commonwealth as follows: (a) If the financial institution does not have income from business activity which is taxable in another state, the whole of its net income shall be taxable under section two. For purposes of this section, a financial institution is taxable in another state as defined in the definition of ''taxable'' in section one. Notwithstanding any other provision of this section, the portion of the net income of a financial institution that a nondomiciliary state is prohibited from taxing under the Constitution of the United States shall be allocated in full to the commonwealth if the commercial domicile of the institution is in the commonwealth. [Subsection (b) effective for taxable years beginning on or after January 1, 2025. See 2023, 50, Sec. 47 as amended by 2023, 77, Sec. 194.] (b) If the financial institution has income from business activity which is taxable both within and without the commonwealth, its net income shall be apportioned to the commonwealth by multiplying its net income by its receipts factor. If the receipts factor is missing, the whole of the financial institution's net income shall be taxable pursuant to section 2. The receipts factor shall be missing if both its numerator and denominator are zero, but it shall not be missing merely because its numerator is zero. [Subsection (c) effective for taxable years beginning on or after January 1, 2025. See 2023, 50 Sec. 47 as amended by 2023, 77, Sec. 194.] (c) The receipts factor shall be computed according to the method of accounting, cash or accrual basis, used by the taxpayer for federal income tax purposes for the taxable year. (d) The receipts factor is a fraction, the numerator of which is the receipts of the taxpayer in the commonwealth during the taxable year and the denominator of which is the receipts of the taxpayer within and without the commonwealth during the taxable year. The method of calculating receipts for purposes of the denominator is the same as the method used in determining receipts for purposes of the numerator. As used in this subsection, ''receipts'' shall mean gross income, including net taxable gain on disposition of assets and money market transactions in the regular course of the financial institution's trade or business. The numerator of the receipts factor shall include, but not be limited to, the following receipts attributable to the commonwealth: (i) the numerator of the receipts factor includes receipts from the lease or rental of real property owned by the taxpayer if the property is located within the commonwealth or receipts from the sublease of real property if the property is located within the commonwealth. (ii)(A) Except as described in subparagraph (B), the numerator of the receipts factor includes receipts from the lease or rental of tangible personal property owned by the taxpayer if the property is located within this commonwealth when it is first placed in service by the lessee. (B) Receipts from the lease or rental of transportation property owned by the taxpayer are included in the numerator of the receipts factor to the extent that the property is used in the commonwealth. The extent an aircraft will be deemed to be used in the commonwealth and the amount of receipts that is to be included in the numerator of the commonwealth's receipts factor is determined by multiplying all the receipts from the lease or rental of the aircraft by a fraction, the numerator of which is the number of landings of the aircraft in the commonwealth and the denominator of which is the total number of landings of the aircraft. If the extent of the use of any transportation property within the commonwealth cannot be determined, then the property will be deemed to be used wholly in the state in which the property has its principal base of operations. A motor vehicle will be deemed to be used wholly in the state in which it is registered. (iii)(A) The numerator of the receipts factor includes interest and fees or penalties in the nature of interest from loans secured by real property if the property is located within the commonwealth. If the property is located both within the commonwealth and one or more other states, the receipts described in this subsection are included in the numerator of the receipts factor if more than fifty percent of the fair market value of the real property is located within the commonwealth. If more than fifty percent of the fair market value of the real property is not located within any one state, then the receipts described in this subsection shall be included in the numerator of the receipts factor if the borrower is located in the commonwealth. (B) The determination of whether the real property securing a loan is located within the commonwealth shall be made as of the time the original agreement was made and any and all subsequent substitutions of collateral shall be disregarded. (iv) The numerator of the receipts factor includes interest and fees or penalties in the nature of interest from loans not secured by real property if the borrower is located in the commonwealth. (v) The numerator of the receipts factor includes net gains from the sale of loans. Net gains from the sale of loans includes income recorded under the coupon stripping rules of section 1286 of the Internal Revenue Code. (A) The amount of net gains, but not less than zero, from the sale of loans secured by real property included in the numerator is determined by multiplying such net gains by a fraction, the numerator of which is the amount included in the numerator of the receipts factor pursuant to paragraph (iii) and the denominator of which is the total amount of interest and fees or penalties in the nature of interest from loans secured by real property. (B) The amount of net gains, but not less than zero, from the sale of loans not secured by real property included in the numerator is determined by multiplying such net gains by a fraction the numerator of which is the amount included in the numerator of the receipts factor pursuant to paragraph (iv) and the denominator of which is the total amount of interest and fees or penalties in the nature of interest from loans not secured by real property. (vi) The numerator of the receipts factor includes interest and fees or penalties in the nature of interest from credit card receivables and receipts from fees charged to card holders, such as annual fees, if the billing address of the card holder is in the commonwealth. (vii) The numerator of the receipts factor includes net gains, but not less than zero, from the sale of credit card receivables multiplied by a fraction, the numerator of which is the amount included in the numerator of the receipts factor pursuant to paragraph (vi) and the denominator of which is the taxpayer's total amount of interest and fees or penalties in the nature of interest from credit card receivables and fees charged to card holders. (viii) The numerator of the receipts factor includes all credit card issuer's reimbursement fees multiplied by a fraction, the numerator of which is the amount included in the numerator of the receipts factor pursuant to paragraph (vi) and the denominator of which is the taxpayer's total amount of interest and fees or penalties in the nature of interest from credit card receivables and fees charged to card holders. (ix) The numerator of the receipts factor includes receipts from merchant discount if the commercial domicile of the merchant is in the commonwealth. Such receipts shall be computed net of any card holder charge backs, but shall not be reduced by any interchange transaction fees or by any issuer's reimbursement fees paid to another for charges made by its card holders. (x)(A)(1) The numerator of the receipts factor includes loan servicing fees derived from loans secured by real property multiplied by a fraction, the numerator of which is the amount included in the numerator of the receipts factor pursuant to paragraph (iii) and the denominator of which is the total amount of interest and fees or penalties in the nature of interest from loans secured by real property. (2) The numerator of the receipts factor includes loan servicing fees derived from loans not secured by real property multiplied by a fraction, the numerator of which is the amount included in the numerator of the receipts factor pursuant to paragraph (iv) and the denominator of which is the total amount of interest and fees or penalties in the nature of interest from loans not secured by real property. (B) In circumstances in which the taxpayer receives loan servicing fees for servicing either the secured or unsecured loans of another, the numerator of the receipts factor shall include such fees if the borrower is located in the commonwealth. (xi) The numerator of the receipts factor includes receipts from sales, other than sales of tangible personal property, not otherwise apportioned under this section to the extent that those receipts would be included in the numerator of a corporation's sales factor as determined pursuant to subsection (f) of section 38. For purposes of the receipts sourced pursuant to this paragraph, paragraph (xiii) of subsection (d) shall not apply. [Paragraph (xii) of subsection (d) effective for taxable years beginning on or after January 1, 2025. See 2023, 50, Sec. 47 as amended by 2023, 77, Sec. 194.] (xii)(A) Interest, dividends, net gains, but not less than zero, and other income from investment assets and activities and from trading assets and activities shall be included in the receipts factor. Investment assets and activities and trading assets and activities include but are not limited to: investment securities; trading account assets; federal funds; securities purchased and sold under agreements to resell or repurchase; options; futures contracts; forward contracts; notional principal contracts such as swaps; equities; and foreign currency transactions. With respect to the investment and trading assets and activities described in clauses (1) and (2), the receipts factor shall include the amounts described in said clauses (1) and (2). (1) The receipts factor shall include the amount by which interest from federal funds sold and securities purchased under resale agreements exceeds interest expense on federal funds purchased and securities sold under repurchase agreements. (2) The receipts factor shall include the amount by which interest, dividends, gains and other income from trading assets and activities, including, but not limited to, assets and activities in the matched book, in the arbitrage book and foreign currency transactions, exceed amounts paid in lieu of interest, amounts paid in lieu of dividends, and losses from such assets and activities. (B) The amount of interest, dividends, net gains, but not less than zero, and other income from investment assets and activities and from trading assets and activities to be attributed to the commonwealth and included in the numerator shall be determined by multiplying all such income from such assets and activities by a fraction, the numerator of which shall be the total receipts included in the numerator pursuant to paragraphs (i) through (x), inclusive, and the denominator of which shall be all total receipts of the taxpayer included in the denominator other than interest, dividends, net gains, but not less than zero, and other income from investment assets and activities and from trading assets and activities. (xiii) All receipts which would be assigned under this section to a state in which the taxpayer is not taxable shall be included in the numerator of the receipts factor, if the taxpayer's commercial domicile is in the commonwealth. [Subsection (e) effective for taxable years beginning on or after January 1, 2025. See 2023, 50 Sec. 47 as amended by 2023, 77, Sec. 194.] (e) If the provisions of subsections (a) to (d), inclusive, are not reasonably adapted to approximate the net income derived from business carried on within the commonwealth, a financial institution may apply to the commissioner, or the commissioner may require the financial institution, to have its income derived from business carried on within the commonwealth determined by a method other than that set forth in subsections (a) to (d), inclusive. Such application shall be made by attaching to its duly-filed return a statement of the reasons why the financial institution believes that subsections (a) to (d), inclusive, are not reasonably adapted to approximate its net income derived from business carried on within the commonwealth and a description of the method sought by it. A financial institution which so applies shall, upon receipt of a request therefor from the commissioner, file with the commissioner, under oath of its treasurer, a statement of such additional information as the commissioner may require. If, after such application by the financial institution, or after the commissioner's own review, the commissioner determines that the provisions of subsections (a) to (d), inclusive, are not reasonably adapted to approximate the financial institution's net income derived from business carried on within the commonwealth, the commissioner shall by reasonable methods determine the amount of net income derived from business activity carried on within the commonwealth. The amount thus determined shall be the net income taxable under section 2 and the foregoing determination shall be in lieu of the determination required by subsections (a) to (d), inclusive. If an alternative method is used by the commissioner hereunder, the commissioner, in their discretion, with respect to the 2 next succeeding taxable years, may require similar information from such financial institution if it shall appear that the provisions of subsections (a) to (d), inclusive, are not reasonably adapted to approximate for the applicable year the financial institution's net income derived from business carried on within the commonwealth and may again by reasonable methods determine such income. [There are no subsections (f) and (g).] (h) For purposes of this section, dividends that are deemed to be received from an entity, including amounts included in federal gross income pursuant to sections 951 or 951A of the Code, shall not be considered receipts.

M.G.L. c. 63, § 2B S corporations; excise rate; determining factors of amount

c. 63, § 2B. S corporations; excise rate; determining factors of amount Section 2B. (a) Any financial institution which is an S corporation, as defined under section 1361 of the Code, shall pay, on account of each taxable year, an excise measured by its net income determined to be taxable under section 2A as follows:— (1) The net income shall be determined by taking into account subchapter S of the Code. Income or loss shall be determined as if it were realized or incurred directly by an owner subject to taxation under chapter 62 or 63, as applicable. In the case of an S corporation, income shall be included in the net income measure under this subsection and, to the extent that the income is taxed to the S corporation for federal income tax purposes, subject to tax at the following rates:— (i) for each taxable year beginning on or after January 1, 1995, but before January 1, 2010, 10.5 per cent; (ii) for each taxable year beginning on or after January 1, 2010, but before January 1, 2011, 10.0 per cent; (iii) for each taxable year beginning on or after January 1, 2011, but before January 1, 2012, 9.5 per cent; or (iv) for each taxable year beginning on or after January 1, 2012 and thereafter, 9.0 per cent. (2) Any financial institution which is an S corporation and has total receipts for the taxable year of at least $6,000,000 but less than $9,000,000 shall include in its excise an amount determined by multiplying its net income determined to be taxable in accordance with this chapter by two-thirds of the rate specified in clause (3). (3) Any financial institution which is an S corporation and has total receipts for the taxable year of $9,000,000 or more shall also include in its excise an amount determined by multiplying its net income determined to be taxable in accordance with this chapter by a rate calculated by subtracting the rate applicable to Part B taxable income for that year in subsection (b) of section 4 of chapter 62 from the rate applicable to financial institutions in that taxable year under subsection (b) of section 2 of chapter 63. (4) Qualified subchapter S subsidiaries shall not be subject to separate entity level taxation under this section; provided, however, that the parent S corporation shall be subject to tax under this section and shall include the income and take into account the activities of all qualified subchapter S subsidiaries for purposes of calculating the excise due under paragraphs (1), (2) and (3). The parent S corporation and its qualified subchapter S subsidiaries shall be jointly and severally liable for the tax due under this chapter. (b) The excise imposed under this section for each taxable year shall be not less than $456. (5) For purposes of paragraphs (2) and (3), net income determined to be taxable in accordance with this chapter shall be determined without taking into account subchapter S of the Code and shall not include income that is taxed to S corporation at the entity level under paragraph (1). For purposes of said paragraphs (2) and (3), the term ''total receipts'' shall mean gross receipts or sales, less returns and allowances, and shall include dividends, interest, royalties, capital gain net income, rental income and all other income; provided, however, that the cost of goods sold or the cost of operations shall not be deductible in determining these total receipts; and provided further, that the commissioner shall, by regulation, apply limits on an aggregate basis to S corporations engaged in unitary business with majority direct or indirect ownership by common stockholders, which shall include any other type of entity so engaged and so owned which the commissioner finds was established for the purpose of avoiding the foregoing limit.

M.G.L. c. 63, § 7 Effect of assessment on other levies

c. 63, § 7. Effect of assessment on other levies Section 7. Any taxes assessed upon any bank under the provisions of the foregoing sections shall be in lieu of any and all other taxes under this chapter.

M.G.L. c. 63, § 20 Premiums subject to taxation; rate

c. 63, § 20. Premiums subject to taxation; rate Section 20. Every life insurance company, as defined by section one hundred and eighteen of chapter one hundred and seventy-five, authorized to transact business in the commonwealth shall annually pay an excise of two per cent upon all new and renewal premiums received during the preceding calendar year for all policies allocable to this commonwealth, as hereinafter provided. In the case of a foreign life insurance company, the policy shall be deemed to be allocable to this commonwealth if the insured is a resident of the commonwealth at the time of payment of the premium therefor. In the case of a domestic life insurance company, the policy shall be deemed to be allocable to this commonwealth unless the insured at the time of payment of the premium therefor is a resident of a state or country to which such company actually pays an insurance excise. The word ''premiums'' as used in this section shall include all amounts received as consideration for life insurance policies without deduction for amounts paid to other companies for reinsurance and shall include dividends applied to purchase additional insurance or to shorten the premium paying period. In determining the amount of the excise payable hereunder there shall be deducted, to the extent that they are properly allocable to premiums taxable hereunder, (a) all premiums returned to policyholders during said preceding calendar year but not including cash surrender values, and (b) dividends which during said year have been paid or credited to policyholders or applied to purchase additional insurance or to shorten the premium paying period. All premiums received by any life insurance company for contingencies of any character insured against by such company under authority of clause sixth of section forty-seven of chapter one hundred and seventy-five shall be excluded, except as hereinafter provided, from taxation under this section and shall be taxable under sections twenty-two and twenty-three of this chapter. All premiums received by any such company for provisions for total and permanent disability or accidental death benefit incorporated in policies or contracts under section twenty-four of said chapter one hundred and seventy-five or any supplemental policies issued under said section twenty-four shall be taxable under this section.

M.G.L. c. 63, § 21 Additional tax on foreign companies

c. 63, § 21. Additional tax on foreign companies Section 21. Every foreign life insurance company shall annually pay with respect to business taxable under the preceding section, in addition to the excise hereby imposed, a sum equal to the excess over such excise of the amount of tax which would be imposed in the same year by the laws of the state or country under which such company is organized, upon a life insurance company incorporated in this commonwealth, or upon its agents, if doing business to the same extent in such state or country.

M.G.L. c. 63, § 22 Domestic companies other than life; premiums subject to taxation; rate

c. 63, § 22. Domestic companies other than life; premiums subject to taxation; rate Section 22. Every domestic insurance company coming within the scope of the definition of a domestic company in section 1 of chapter 175, except life insurance companies with respect to amounts received as consideration for annuity contracts and business taxable under section 20 and marine, or fire and marine, insurance companies with respect to business taxable under section 29A, shall annually pay an excise of 2.28 per cent upon the gross premiums for all policies written or renewed, all additional premiums charged, and all assessments made by such company on policyholders during the preceding calendar year, exclusive of reinsurance; but such premiums and assessments for policies written or renewed for insurance, exclusive of reinsurance, of property or interests in other states or countries where a tax is actually paid by such company, or its agents, shall not be so taxed. For purposes of calculating the credit under section 29E of this chapter, the term ''surtax'' is hereby defined as the portion of the excise imposed under this section equal to 0.28 per cent.

M.G.L. c. 63, § 22A Domestic companies; annual total gross investment income earned tax

c. 63, § 22A. Domestic companies; annual total gross investment income earned tax Section 22A. Every domestic insurance company coming within the scope of the definition of a domestic company in section one of chapter one hundred and seventy-five, except life insurance companies as defined in section one hundred and eighteen of said chapter one hundred and seventy-five, which are also life insurance companies as defined under subsection (a) of section 801 of the Federal Internal Revenue Code, as amended, and in effect for the taxable year, shall annually pay, as part of its excise imposed under this chapter, an amount equal to one per cent of its total gross investment income earned during the preceding calendar year, as reported in its annual statement for said year filed with the commissioner of insurance and as shown in Exhibit 3 of said statement for a life insurance company or in Item 10, Column 8, Part 1, of the Underwriting and Investment Exhibit for any other domestic insurance company.

M.G.L. c. 63, § 22B Investment privilege excise; net investment income

c. 63, § 22B. Investment privilege excise; net investment income Section 22B. (1) Every domestic life insurance company not subject to tax under section twenty-two A shall annually pay an investment privilege excise equal to fourteen per cent of its net investment income for the taxable year as adjusted and as apportioned to the commonwealth in accordance with this section. (2) As used in this section, ''net investment income'' means taxable investment income as defined in paragraph two of subsection (a) of section 804 of the Federal Internal Revenue Code. To the extent that the following items are deducted or excluded in computing such taxable investment income, there shall not be deducted or excluded in computing net investment income: (a) dividends received, (b) taxes on or measured by investment income, franchise taxes for the privilege of doing business and capital stock taxes imposed by any state, (c) interest from bonds, notes, and evidences of indebtedness of any state, including this commonwealth, and (d) premium taxes. (3) Net investment income shall be adjusted as follows: Dividends included therein shall be deducted other than dividends from or on account of the ownership of shares in a corporate trust, as defined in section one of chapter sixty-two, engaged in business in the commonwealth, or deemed distributions and actual distributions, except actual distributions out of previously taxed income, from a DISC which is not a wholly owned DISC, or any class of stock if the insurer owns less than fifteen per cent of the voting stock of the corporation paying such dividend. (4) Net investment income, as adjusted by this section shall be apportioned to this commonwealth by multiplying such income by the lesser of twenty per cent or the percentage which is the sum of ninety per cent of the insurer's premium factor and ten per cent of the insurer's payroll factor, as hereinafter defined. (a) The premium factor is a fraction, the numerator of which is the sum of life insurance premiums, annuity considerations and accident and health premiums received during the taxable year with respect to direct business in the commonwealth, and in addition all such life insurance premiums, annuity considerations and accident and health premiums received during the taxable year with respect to direct business in other jurisdictions unless the insured at the time of payment of the premiums therefor is a resident of a state or county in which such company is subject to an insurance excise, and the denominator of which is the sum of all life insurance premiums, annuity considerations and accident and health premiums received during the taxable year with respect to direct business, exclusive in each case of premiums and annuity considerations waived, dividends applied to shorten endowment or premium paying periods, and dividends applied to purchase paid-up additions and annuities. (b) The payroll factor is a fraction, the numerator of which is the compensation paid in this commonwealth during the taxable year by the insurer and the denominator of which is total compensation paid everywhere during the taxable year. As used in this section ''compensation'' shall mean wages, salaries, commissions and any other form of remuneration paid to employees for personal services and all commissions for the sale of insurance paid to persons whether or not employees of the insurer. The determination of compensation paid in this commonwealth shall be made in accordance with the provisions of subdivisions (1), (2) and (3) of subsection (e) of section thirty-eight.

M.G.L. c. 63, § 22C Credit against investment privilege excise

c. 63, § 22C. Credit against investment privilege excise Section 22C. A domestic life insurance company subject to the investment privilege excise imposed by section twenty-two B having admitted assets of two hundred million dollars or less at the close of a taxable year, shall be allowed a credit against such excise in the amount of twenty thousand dollars. Any such company, whose admitted assets at the close of a taxable year are in excess of two hundred million dollars, shall be allowed a credit against such excise in the amount of twenty thousand dollars, reduced pro rata by five hundred dollars for each one million dollars or fraction thereof by which the value of the admitted assets of such company at the close of the taxable year exceeds two hundred million dollars. For the purpose of this section admitted assets shall be valued by the commissioner of corporations and taxation in accordance with standards established with respect to annual statements under chapter one hundred and seventy-five.

M.G.L. c. 63, § 22D Gains, determination for investment privilege excise purposes; definitions

c. 63, § 22D. Gains, determination for investment privilege excise purposes; definitions Section 22D. For the purposes of determining the amount of gains, but not losses, under the investment privilege excise imposed by section twenty-two B, a qualifying domestic life insurance company, as hereinafter defined, subject to said excise and having admitted assets of less than one billion dollars, at the close of the taxable year, as valued by the commissioner of corporations and taxation in accordance with standards established with respect to annual statements under chapter one hundred and seventy-five, may elect to adjust the basis, as defined in section 1011 of the Federal Internal Revenue Code, of all merger assets, to equal their market value on the qualifying date. Said election shall be irrevocable and made on or before the date for filing, including any extension thereof, the return of the qualifying domestic company for the taxable year ending December thirty-first, nineteen hundred and seventy-seven. For purposes of this section, a ''qualifying domestic life insurance company'' is a company which, after December thirty-first, nineteen hundred and fifty-eight and before December thirty-first, nineteen hundred and seventy-six, was a party to a reorganization, as defined in section 368 of the Federal Internal Revenue Code and in effect for the taxable year of the reorganization, with another domestic insurance company which was not a life insurance company, as defined by subsection (a) of section 801 of the Federal Internal Revenue Code in effect for the taxable year of the reorganization. For purposes of this section, ''merger assets'' shall mean stock, other than stock in a party to the reorganization, acquired in the reorganization by the qualifying domestic life insurance company and ''qualifying date'' shall mean the date of the reorganization.

M.G.L. c. 63, § 23 Foreign companies; premiums subject to taxation; rate

c. 63, § 23. Foreign companies; premiums subject to taxation; rate Section 23. Every foreign insurance company coming within the scope of the definition of a foreign company in section 1 of chapter 175, except life insurance companies with respect to business taxable under sections 20 and 21 and marine, or fire and marine, insurance companies with respect to business taxable under section 29A, shall annually pay an excise upon the gross premiums for all policies written or renewed, all additional premiums charged, and all assessments made during the preceding calendar year for insurance of property or interests in this commonwealth, or which are subjects of insurance by contracts issued through companies or agents therein, exclusive of reinsurance, at the rate of 2.28 per cent but not less in amount than would be imposed by the laws of the state or country under which such company is organized upon a like insurance company incorporated in this commonwealth, or upon its agents, if doing business to the same extent in such state or country.

M.G.L. c. 63, § 24 Deductions

c. 63, § 24. Deductions Section 24. In determining the amount of the tax payable under sections twenty-two and twenty-three, there shall be deducted all premiums on policies written but not taken, or cancelled through default of payment, and all premiums returned or credited to policyholders during the year for which the tax is determined, but not including premiums returned or credited on reinsurance assumed, provided that all premiums for which deduction is claimed have been included as premium receipts in a return made under section twelve of chapter sixty-two C and a tax assessed thereon.

M.G.L. c. 63, § 24A Retaliatory taxes; applicability and reciprocal exemption; definition

c. 63, § 24A. Retaliatory taxes; applicability and reciprocal exemption; definition Section 24A. Section twenty-one and the provision of section twenty-three imposing an excise in excess of two per cent of premiums taxable thereunder shall not apply to insurance companies organized in a state or country the laws of which do not impose retaliatory taxes or which grant, on a reciprocal basis, exemption from such retaliatory taxes to insurance companies organized in this commonwealth, or its agents. As used herein, ''retaliatory taxes'' means those taxes imposed upon insurance companies organized in another state or country which result from the fact that an insurance company organized in the taxing jurisdiction and doing business in such other state or country is taxable in an amount exceeding that imposed by the taxing jurisdiction upon an insurance company organized in such other state or country and doing business to the same extent in the taxing jurisdiction.

M.G.L. c. 63, § 26 Examination of records

c. 63, § 26. Examination of records Section 26. The books, papers and accounts of every insurance company and of its agents shall be opened at all times to inspection and examination by the commissioner and the commissioner of insurance, or their duly authorized representatives, for the purpose of verifying the accuracy of the returns made under section twelve of chapter sixty-two C.

M.G.L. c. 63, § 28 Payment; time; basis for liability

c. 63, § 28. Payment; time; basis for liability Section 28. Every insurance company liable to taxation under sections twenty to twenty-three, inclusive, and twenty-nine A shall pay to the commissioner at the time fixed for filing its return under the applicable section of chapter sixty-two C the amount of the excise thereby imposed. Liability for the taxes imposed by sections twenty to twenty-three, inclusive, and twenty-nine A, or by sections two and three of chapter five hundred and thirty-one of the acts of nineteen hundred and forty-three shall be incurred by reason of the transaction of business at any time within the calendar year preceding that in which the return is required to be filed.

M.G.L. c. 63, § 29 Liability for taxes

c. 63, § 29. Liability for taxes Section 29. Every domestic or foreign insurance company shall be liable for the full amount of all taxes assessed under this chapter upon it or its agents.

M.G.L. c. 63, § 29A Fire and marine companies; tax on underwriting profit; computation

c. 63, § 29A. Fire and marine companies; tax on underwriting profit; computation Section 29A. (1) Every marine, or fire and marine, insurance company authorized to transact business in the commonwealth coming within the scope of the definition of a domestic company or of a foreign company in section 1 of chapter 175, shall, with respect to all insurance written within the commonwealth upon hulls, freights, or disbursements, or upon goods, wares, merchandise and all other personal property and interests therein, in course of exportation from any country, importation into any country, or transportation coastwise including transportation by land or water from point of origin to final destination in respect to, appertaining to, or in connection with, any and all risks or perils of navigation, transit or transportation, any portion of which exportation, importation, transportation, navigation, transit, or shipment is upon any ocean, and upon the property while being prepared for and while awaiting shipment, and during any delays, storage, transshipment or reshipment incident thereto, including war risks and marine builders risks, pay a tax of 5.7 per cent on its taxable underwriting profit, ascertained as hereinafter provided, from such insurance written within the commonwealth. (2) The taxable underwriting profit on such marine insurance written within the commonwealth, as determined in subsection (6), shall be that proportion of the total underwriting profit of such company from such marine insurance written within the United States for the taxable period which the amount of net premiums of such company from such marine insurance written within the commonwealth for the taxable period bears to the amount of net premiums of such company from such marine insurance written within the United States for the taxable period. (3) The underwriting profit of such company on such insurance written within the United States shall be determined by deducting from the net earned premiums on such marine insurance written within the United States during the taxable year, meaning thereby the calendar year next preceding the date on which such tax is due, the following items:— (a) Net losses incurred, meaning thereby gross losses incurred during such calendar year on such marine insurance written within the United States, less reinsurance claims collected or collectible and less all net salvages and all recoveries collected or collectible from any source during such calendar year on such losses and on losses deducted under this section in any prior year. (b) Net expenses incurred, meaning thereby expenses incurred during such calendar year on such marine insurance written within the United States, including all state and federal taxes in connection therewith; but in no event shall the aggregate amount of such net expenses deducted exceed forty per cent of the net premiums on such marine insurance ascertained as hereinafter provided; and (c) Net dividends paid or credited to policyholders or insureds during such calendar year on such marine insurance written within the United States. (4) In determining the amount of the tax payable under subsection (1), net earned premiums on such marine insurance written within the United States during the taxable year shall be arrived at as follows: From gross premiums written on such marine insurance during the taxable year there shall be deducted any and all return premiums, premiums on policies not taken, premiums paid for reinsurance and net unearned premiums on all such unexpired risks at the end of the taxable year; and there shall be added to such amount net unearned premiums on such unexpired risks at the end of the calendar year next preceding the taxable year. (5) In determining the amount of such tax, net expenses incurred shall be determined as the sum of the following: (a) Specific expenses incurred directly and specifically in connection with such marine insurance, including all commissions, agency expenses, taxes, licenses, fees, and loss-adjustment expenses, less recoveries or reimbursements on account of or in connection with such commissions or other expenses collected or collectible because of reinsurance or from any other source; and (b) General expenses incurred on such marine insurance, consisting of that proportion of general or overhead expenses incurred in connection with such insurance which the net premiums on such marine insurance written by such company during the taxable year bear to the total net premiums from all classes of insurance written by it during the taxable year. Within the meaning of this paragraph, general or overhead expenses shall include salaries of officers and employees, printing and stationery, all taxes imposed by the commonwealth and the United States, except as included in paragraph (a) of this subsection, and all other expenses of such company not included in said paragraph (a), after deducting expenses and taxes specifically chargeable to any or all other classes of insurance. (6) In determining the amount of the tax payable under subsection (1), the taxable underwriting profit, if any, of such company on all such marine insurance written within the commonwealth shall be ascertained as follows:— (a) In the case of every such company which has written any such business within the commonwealth during three calendar years immediately preceding the year in which such taxes are payable, the taxable underwriting profit shall be determined by adding or subtracting, as the case may be, the underwriting profit or loss on all such insurance written within the United States, ascertained as hereinbefore provided, for each of such three years, and dividing by three. (b) In the case of every such company other than as specified in paragraph (a) of this subsection, such taxable underwriting profit, if any, shall be the underwriting profit, if any, on such marine insurance business written within the commonwealth during the taxable year, ascertained as hereinbefore provided; but after such company has written such marine insurance business within the commonwealth during three calendar years, an adjustment shall be made on the three year average basis by ascertaining the amount of tax payable in accordance with paragraph (a) of this subsection. Any tax credit resulting from such adjustment may be refunded without interest upon written application at the time of filing the required return, or applied toward the payment of any tax due or which may thereafter become due. [There is no subsection (7).] (8) Every company liable to taxation under this section, when it ceases to write any such marine insurance within the commonwealth, or discontinues business therein, shall thereupon notify the commissioner in writing within five days and shall within sixty days thereafter file with the commissioner a report of all such marine premiums written from January first of the year of such cessation to and including the date upon which the company ceased to do business in the commonwealth, and an excise of one tenth of one per cent on such net marine premiums shall be immediately due and payable, and shall be in lieu of the excise provided by this section for such period. (9) The tax provided for in this section shall apply to the business of the year ending December thirty-first, nineteen hundred and forty-seven, and subsequent years.

M.G.L. c. 63, § 29B Taxation of reciprocal or inter-insurance exchange agents

c. 63, § 29B. Taxation of reciprocal or inter-insurance exchange agents Section 29B. Every attorney in fact of a reciprocal or inter-insurance exchange defined in section ninety-four A of chapter one hundred and seventy-five and authorized to transact business in the commonwealth under the provisions of sections ninety-four A to ninety-four M, inclusive, of said chapter, shall be subject to the provisions of sections twenty-two to twenty-nine, inclusive, and section twelve of chapter sixty-two C unless said provisions and their context clearly show that said provisions were not intended to apply to the plan and method of exchanging reciprocal or inter-insurance contracts; provided, that the word ''premiums'' in section twenty-two and section twenty-three shall, with respect to reciprocal or inter-insurance exchanges, mean ''premium deposits''; and provided, further, that in section twenty-four, the word ''premiums'', shall be construed to mean, when applied to reciprocal or inter-insurance exchanges, premium deposits credited or returned to subscribers.

M.G.L. c. 63, § 29C Life insurance companies; credits against taxes imposed by Secs. 20 and 22

c. 63, § 29C. Life insurance companies; credits against taxes imposed by Secs. 20 and 22 [Text applicable as provided by 1998, 259, Sec. 10.] Section 29C. A life insurance company subject to the excise imposed by either sections 20 or 22 shall be allowed a credit against either such excise equal to 11/2 per cent of such company's total capital contribution in excess of their full proportionate share which shall mean an investment in the Massachusetts life insurance company community investment initiative equal to at least the product of the following:- (1) $20,000,000; (2) multiplied by a fraction, the numerator of which shall be the life insurance company's total net investment income tax due and payable under section 22B of chapter 63 for the tax year ending on or before December 31, 1997 and the denominator of which shall be the total net investment tax due and payable under said section 22B for all life insurance companies doing business in the commonwealth for the tax year ending on or before December 31, 1997. For a company that was not subject to said section 22B in the tax year ending on or before December 31, 1997, the numerator shall be the life insurance company's total net investment income tax due and payable under said section 22B for the taxable year two years prior to the current taxable year. The department of revenue shall determine each company's full proportionate share and shall provide such information to said company within 30 days of receipt of a request by said company, for the existence of such initiative, provided, however, in the taxable year beginning on or after the fifth year, the amount of said credit shall be equal to 1.5 per cent of such company's total capital contribution.

M.G.L. c. 63, § 29D Property and casualty insurance companies; taxes on premiums; credits against taxes imposed by Secs. 22 and 23

c. 63, § 29D. Property and casualty insurance companies; taxes on premiums; credits against taxes imposed by Secs. 22 and 23 [Text applicable as provided by 1998, 259, Sec. 10.] Section 29D. A property and casualty insurance company subject to the excise upon premiums imposed by either sections 22 or 23 shall be allowed a credit against either such excise equal to 11/2 per cent of such company's total capital contribution in excess of their full proportionate share which shall mean an investment in the Massachusetts property and casualty insurance company community and economic development initiative equal to at least the product of the following: (1) $20,000,000; (2) multiplied by a fraction, the numerator of which shall be the property and casualty insurance company's total gross investment tax under section 22A of chapter 63 for the tax year ending on or before December 31, 1997 and the denominator of which shall be the total gross investment tax under said section 22A for all property and casualty insurance companies doing business in the commonwealth for the tax year ending on or before December 31, 1997. For a company that was not subject to said section 22A in the tax year ending on or before December 31, 1997, the numerator shall be the P&C insurance company's total net investment income tax due and payable under said section 22A for the taxable year two years prior to the current taxable year. The department of revenue shall determine said company's full proportionate share and shall provide such information to said company within 30 days of receipt of a request by said company, for the existence of such initiative, provided, however, in the taxable year beginning on or after the fifth year, the amount of said credit shall be equal to 1.5 per cent of such company's total capital contribution.

M.G.L. c. 63, § 29E Definitions; property and casualty insurance companies; retaliatory taxes; credits against taxes imposed by Sec. 22

c. 63, § 29E. Definitions; property and casualty insurance companies; retaliatory taxes; credits against taxes imposed by Sec. 22 [Text applicable as provided by 1998, 259, Sec. 10.] Section 29E. (a) As used in this section, the following words shall have the following meanings:— ''Credit share'', a credit amount equal to the product of the following: (1) $8,000,000; (2) multiplied by a fraction, the numerator of which shall be the domestic property and casualties insurer's retaliatory taxes attributable to the surtax which would have been payable for the preceding taxable year, before application of the credit provided by subsection (b) and the denominator of which shall be the total retaliatory taxes attributable to the surtax which would have been payable for the preceding taxable year, before application of the credit provided by subsection (b) for all domestic property and casualty companies that do business in the commonwealth and that have submitted the information required by subsection (d). ''Domestic property and casualty insurer'', a property and casualty company organized or domiciled in the commonwealth. ''Foreign property and casualty insurer'', a property and casualty company organized or domiciled in another jurisdiction. ''Property and casualty insurer'', an insurance company which satisfies the definition of an insurance company in section 1 of chapter 175, except life insurance companies as defined in section 118 of said chapter 175, and which is subject to the provisions of this chapter. ''Retaliatory taxes'', those taxes imposed or assessed by and paid to another jurisdiction by any domestic property and casualty insurer due to the surtax as defined in section 22 of this chapter. Such term, however, shall not include penalties or interest for late payment of taxes. (b) Property and casualty insurers which pay retaliatory taxes to other jurisdictions may claim a credit against the tax imposed by section 22 of chapter 63 of the General Laws. Except as provided in subsection (c), the amount of the credit shall equal 100 per cent of the retaliatory taxes attributable to the surtax which would have been payable for the preceding taxable year, before application of any credit. The company seeking the credit must furnish proof of payment of the retaliatory tax to the commissioner as required pursuant to subsection (d). (c) If the total retaliatory taxes attributable to the surtax payable for the prior tax year as reported pursuant to subsection (d) for all domestic property and casualty companies that do business in the commonwealth exceed $8,000,000, the amount of each domestic property and casualty company's credit shall be limited to that company's credit share. The commissioner of revenue shall be responsible for reporting to each company its credit share amount by February fifteenth of the current taxable year. (d) A domestic property and casualty company shall provide the commissioner of revenue with the amount of its retaliatory taxes attributable to the surtax and payable for the preceding taxable year, before application of the credit, by December 31 of the current taxable year.

M.G.L. c. 63, § 30 Definitions; value of tangible property; net worth

c. 63, § 30. Definitions; value of tangible property; net worth Section 30. When used in this section and in sections 31 to 52, inclusive, the following terms shall have the following meanings, and the terms "business corporation,'' "disregarded entity,'' and "partnership,'' defined in paragraphs 1, 2 and 16 of this section, shall, unless otherwise provided, also have the following meanings and effect for purposes of all sections of this chapter:-- 1. "Business corporation'', any corporation, or any "other entity'' as defined in section 1.40 of chapter 156D, whether the corporation or other entity may be formed, organized, or operated in or under the laws of the Commonwealth or any other jurisdiction, and whether organized for business or for non-profit purposes, that is classified for the taxable year as a corporation for federal income tax purposes. 2. "Disregarded entity'', an entity that is disregarded as a separate entity from its owner for federal income tax purposes. Such an entity shall similarly be disregarded for purposes of this chapter, and without limitation, all income, assets, and activities of the entity shall be considered to be those of the owner. 3. "Gross income'', gross income as defined under the provisions of the Federal Internal Revenue Code, as amended and in effect for the taxable year, plus the interest from bonds, notes and evidences of indebtedness of any state, including this commonwealth; provided, however, that gross income of corporations taxable under section thirty-eight B shall, in addition to the foregoing, include a deduction for losses from the sale or exchange of capital assets sustained during the taxable year to the extent allowable by the Federal Internal Revenue Code. 4. "Net income'', gross income less the deductions, but not credits, allowable under the provisions of the Code, as amended and in effect for the taxable year; provided, however, that any deduction otherwise allowable which is allocable, in whole or in part, to 1 or more classes of income not included in a corporation's taxable net income, as determined under subsection (a) of section 38, shall not be allowed. In the case of a corporation exempt from taxation under section 501 of the Code, "net income'' means unrelated business taxable income, as defined in section 512 of the Code. In lieu of disallowing any deduction allocable, in whole or in part, to dividends not included in a corporation's taxable net income, 5 per cent of such dividends shall be includable therein, as provided in said subsection (a) of said section 38. For the purposes of this section and said subsection (a) of said section 38, the term "dividend'' shall include, but not be limited to, amounts included in federal gross income pursuant to sections 951 and 951A of the Code. For the purposes of this section, any dividend received directly or indirectly from a real estate investment trust, as provided in sections 856 to 859, inclusive, of the Code, for the taxable year of the trust in which a dividend is paid, shall not be: (i) treated as a dividend; and (ii) included as part of the dividends received deduction otherwise available to the taxpayer under paragraph (1) of said subsection (a) of said section 38. Any dividend received directly or indirectly from a regulated investment company, as provided in sections 851 to 855, inclusive, of the Code, shall not be included as part of the dividends received deduction otherwise available under said paragraph (1) of said subsection (a) of said section 38. [ Second paragraph of paragraph 4 effective until April 19, 2026. For text effective April 19, 2026, see below.] The following deductions shall be allowed: (i) a deduction for that portion of wages or salaries paid or incurred for the taxable year equal to the amount of the credit allowable for the taxable year under section 51 of the Code and otherwise disallowed under section 280C of said Code; and (ii) a deduction for any amount paid or incurred during the taxable year in carrying on the trade or business of a marijuana establishment, as defined in section 1 of chapter 94G, or a medical marijuana treatment center, as defined in section 1 of chapter 94I, that would have been deductible under the Code, but for section 280E of said Code. [ Second paragraph of paragraph 4 as amended by 2026, 65, Sec. 4 effective April 19, 2026. For text effective until April 19, 2026, see above.] The following deductions shall be allowed: (i) a deduction for that portion of wages or salaries paid or incurred for the taxable year equal to the amount of the credit allowable for the taxable year under section 51 of the Code and otherwise disallowed under section 280C of said Code; and (ii) a deduction for any amount paid or incurred during the taxable year in carrying on the trade or business of a marijuana establishment, as defined in section 1 of chapter 94G, or a medical marijuana establishment, as defined in section 1 of chapter 94I, that would have been deductible under the Code, but for section 280E of said Code. Deductions with respect to the following items shall not be allowed: (i) dividends received; (ii) losses sustained in other taxable years, except for the net operating losses as provided in paragraph 5 of this section; (iii) taxes on or measured by income, franchise taxes measured by net income, franchise taxes for the privilege of doing business and capital stock taxes imposed by any state; (iv) the deduction allowed by section 168(k) of said Code; (v) except as otherwise provided in section 31J, interest expense paid, accrued or asserted in connection with a dividend of a note or similar obligation stating the requirement that such interest is to be paid by the corporation that dividends such obligation to its shareholders; (vi) the deduction allowed by section 199 of the Code; (vii) the deduction described in section 163(e)(5) of the Code to the extent increased by amendments to section 163(e)(5)(F) and section 163(i)(1) of the Code, inserted by section 1232 of the federal American Recovery and Reinvestment Act of 2009, Pub. L. 111-5; and (viii) the deductions allowed by sections 245A, 250 and 965(c) of the Code. 5. (a) For purposes of this chapter, the Massachusetts net operating loss incurred in a taxable year shall mean the amount by which the deductions allowed under paragraph four, including the dividends-received deduction allowed in section thirty-eight (a)(1) and not including the deductions for net operating losses under this paragraph, exceed gross income for the taxable year as defined in paragraph three of this section. (b) Massachusetts net operating losses which are sustained in taxable years ending on or after December thirty-first, nineteen hundred and eighty-nine, shall be allowed as a deduction in determining net income; provided, further, that such deduction shall be limited to a percentage of the net income for the taxable year as follows: (1) twenty-five percent of net income for taxable years ending on or after December thirty-first, nineteen hundred and ninety, and before December thirty-first, nineteen hundred and ninety-one; (2) fifty percent of the net income for taxable years ending on or after December thirty-first, nineteen hundred and ninety-one, and before December thirty-first, nineteen hundred and ninety-two; (3) seventy-five percent of net income for taxable years ending on or after December thirty-first, nineteen hundred and ninety-two, and before December thirty-first, nineteen hundred and ninety-three; and (4) and one hundred percent of net income for taxable years ending on or after December thirty-first nineteen hundred and ninety-three. Losses sustained in any taxable year prior to January 1, 2010, may be carried forward for not more than 5 years and may not be carried back. Losses sustained in any taxable year beginning on or after January 1, 2010, may be carried forward for not more than 20 years and may not be carried back. (c)(i) For the first five consecutive taxable years of a corporation, measured from the date of its organization, whether or not organized under the laws of the commonwealth, so much of the loss as determined under section one hundred and seventy-two of the Federal Internal Revenue Code, as amended and in effect for the taxable year, and adjusted for any differences between Massachusetts taxable net income and federal taxable income, as is represented by net operating loss carryovers for taxable years ending December thirty-first, nineteen hundred and seventy-five, and thereafter may be deducted; (ii) provided, however, that such carryover losses shall not be allowed to any corporation fifty percent or more of whose voting stock is owned by another corporation whether or not such owning corporation is taxable in this commonwealth; (d) A business corporation that incurs losses before the corporation becomes subject to tax liability in the commonwealth shall not be allowed to carry those losses forward under this section. (e) Notwithstanding any other provision of this section, when a corporation is allowed to carry forward net operating losses under this section, the loss shall be determined and carried forward by multiplying the loss by the corporation's apportionment percentage as determined under this chapter for the taxable year in which the loss is sustained, with respect to the business that generated the loss and is to be deducted by the corporation from its taxable net income allocated or apportioned to the commonwealth. The commissioner shall adopt rules or regulations to implement this section and to coordinate the application of this section with the other provisions of this chapter. 6. "Taxable year'', any fiscal or calendar year or period for which the corporation is required to make a return to the federal government. 7. The value of a corporation's tangible property taxable under clause (1) of subsection (a) of section thirty-nine shall be the book value of such of its tangible property situated in the commonwealth on the last day of the taxable year as is not subject to local taxation nor taxable under section sixty-seven. For purposes of this paragraph, "book value'' means the original cost of such property, less the depreciation or amortization taken against such property on the books of the corporation maintained for making financial reports to shareholders. If the commissioner finds that a corporation has transferred its tangible property under clause (1) of subsection (a) of section thirty-nine for the purpose of reducing its excise under this chapter, he may determine the amount of its tangible property taxable under said section on the basis of the average of such tangible property held during the taxable year. 8. The net worth of a business corporation taxable under section 39 shall be calculated as follows: (a) the book value of its total assets on the last day of the taxable year shall be reduced by the sum of (1) its liabilities on said date, (2) the book value of its tangible property situated in the commonwealth on said date and subject to local taxation, less the interest of any mortgagee therein, and (3) the book value on said date of its investment in subsidiary business corporations which represent 80 per cent or more of the voting stock of said subsidiary business corporations or, in the case of a subsidiary business corporation which does not have voting stock, the book value of its investment in such business corporation which represents 80 per cent or more ownership interest; (b) the amount determined in (a) shall be multiplied by such corporation's income apportionment percentage, as determined under section 38. In determining the book value of any asset, the commissioner may disallow any reserve, in whole or in part, established with respect thereto which, in his judgment, is not reasonable and proper. 9. Notwithstanding paragraph 8, the net worth of a business corporation taxable under clause (1) of subsection (a) of section 39 that is a qualified real estate investment trust shall be such portion of the book value of its total assets less its liabilities on the last day of the taxable year as the book value of its tangible assets situated in the commonwealth on said date and not subject to local taxation plus the amount of its intangible assets on said date allocable to the commonwealth, as hereinafter determined, bear to the book value of its total assets on said date. The intangible assets allocated to the commonwealth shall be calculated as follows: (a) the book value of its total intangible assets on the last day of the taxable year shall be reduced by the book value on said date of its investment in and advances to subsidiary business corporations which represent 80 per cent or more of the voting stock of said corporations, or in the case of a subsidiary business corporation which does not have voting stock, the book value of its investment in such business corporation which represents an 80 per cent or more ownership interest; (b) the amount determined in (a) shall be multiplied by such corporation's income apportionment percentage, as determined under section 38. In determining the book value of an asset, the commissioner may disallow a reserve, in whole or in part, with respect thereto which, in the commissioner's judgment, is not reasonable and proper. For the purpose of this paragraph, "qualified real estate investment trust'' shall mean a business corporation that both qualifies as a real estate investment trust under section 856 of the Federal Internal Revenue Code and that is required to file with the Securities and Exchange Commission annual and other reports as specified in section 13 or 15(d) of the Securities Exchange Act of 1934, as amended; and "advances'' shall mean such interests in a corporation where a corporation-shareholder relationship exists, determined under such regulations as the commissioner may issue and under section 385 of the Federal Internal Revenue Code as in effect for the taxable year and the regulations issued thereunder. 10. "Tangible property corporation'', a corporation whose tangible property situated in the commonwealth on the last day of the taxable year and not subject to local taxation is 10 per cent or more of such portion of its total assets on the last day of the taxable year less those assets as are situated in the commonwealth on the last day of the taxable year and are subject to local taxation, less its investment on that date in subsidiary corporations which represent 80 per cent or more of the voting stock of those corporations, as shall be found by multiplying that amount by the corporation's income apportionment percentage, as determined under section 38, or a corporation which, in the judgment of the commissioner, should be so classified. For the purposes of this paragraph, the assets of the corporation shall be valued at their book value. 11. "Intangible property corporation'', a corporation whose tangible property situated in the commonwealth on the last day of the taxable year and not subject to local taxation is less than 10 per cent of such portion of its total assets on the last day of the taxable year less those assets as are situated in the commonwealth on the last day of the taxable year and are subject to local taxation, less its investment on that date in subsidiary corporations which represent 80 per cent or more of the voting stock of those corporations, as shall be found by multiplying that amount by the corporation's income apportionment percentage, as determined under section 38, or a corporation which, in the judgment of the commissioner, should be so classified. For the purposes of this paragraph, the assets of the corporation shall be valued at their book value. 12. In any case in which the effective date or applicability of any provision of this chapter is expressed in terms of taxable years beginning or ending with reference to a specified date which is the first or last day of a month, with respect to a corporation which has elected to make a return to the federal government on the basis of an annual period which varies from fifty-two to fifty-three weeks, its taxable year shall be treated as beginning with the first day of the calendar month beginning nearest to the first day of such taxable year, or as ending with the last day of the calendar month ending nearest to the last day of such taxable year. 13. "State'', any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, and any foreign country or a political subdivision of any of the foregoing. 14. "DISC''--a corporation which meets the requirements of section 992(a)(1) of the Federal Internal Revenue Code, as amended and in effect for the taxable year. 15. "Wholly-owned DISC''--a DISC all of whose outstanding shares, except directors' qualifying shares, are owned by a single corporation, either directly or indirectly through other corporations all of whose shares are owned directly or indirectly by such corporation. 16. "Partnership'', any entity that is classified as a partnership for federal income tax purposes for the taxable year. 17. Notwithstanding the last sentence in subparagraph (b) of paragraph 5, to the extent authorized pursuant to the life sciences tax incentive program established by section 5 of chapter 23I, losses sustained in any taxable year by a taxpayer engaged in business as a life sciences company as defined by section 2 of chapter 23I may, to the extent approved pursuant to said life sciences tax incentive program, be carried forward for not more than 15 years; provided, however, that said losses shall not be carried back.

M.G.L. c. 63, § 31A Investment credit for certain corporations; limitations

c. 63, § 31A. Investment credit for certain corporations; limitations Section 31A. (a) A manufacturing corporation, or a business corporation engaged primarily in research and development, which has been deemed to be such under section forty-two B, or a corporation primarily engaged in agriculture or commercial fishing, shall be allowed a credit as hereinafter provided against its excise due under this chapter. The amount of such credit shall be one per cent of the cost or other basis for federal income tax purposes of qualifying tangible property acquired, constructed, reconstructed, or erected during the taxable year, after deduction therefrom of any federally authorized tax credit taken with respect to such property. Qualifying property shall be tangible personal property and other tangible property including buildings and structural components of buildings acquired by purchase, as defined under section one hundred and seventy-nine (d) of the Federal Internal Revenue Code as amended and in effect for the taxable year is not taxable under chapter sixty A; used by the corporation in the commonwealth; situated in the commonwealth on the last day of the taxable year; and which (1) is depreciable under section one hundred and sixty-seven of said Code and has a useful life of four years or more, or (2) is considered recovery property under section one hundred and sixty-eight of said Code. A manufacturing corporation, or a business corporation engaged primarily in research and development, which has been deemed to be such under section forty-two B, or a corporation primarily engaged in agriculture or commercial fishing, shall be allowed a credit against its excise due under this chapter for tangible personal property leased pursuant to an operating lease as hereinafter provided. The amount of such credit afforded to a lessee corporation with respect to such tangible personal property shall be one percent of the lessor's adjusted basis in the property for federal income tax purposes at the beginning of the lease term, multiplied by a fraction, the numerator of which shall be the number of days of the taxable year during which the lessee corporation leases the tangible personal property and the denominator of which shall be the number of days in the useful life of such property. Such useful life shall be the same as that used by the lessor for depreciation purposes when computing federal income tax liability. An operating lease shall be any contract or agreement to lease or rent or for a license to use such property provided that (i) said lease does not constitute a purchase as defined under section one hundred and seventy-nine (d) of the Code, as amended and in effect for the taxable year, (ii) such property is not taxable under chapter sixty A, (iii) such property is used by the lessee corporation in the commonwealth, (iv) such property is situated in the commonwealth throughout the entire lease term, and (v) such property (1) is depreciable by the lessor under section one hundred and sixty-seven of said Code and has a useful life of four years or more, or (2) is considered recovery property under section one hundred sixty-eight of said Code. Such credit shall not be available to a lessee if such lessor has previously received a credit with respect to the leased tangible personal property. The commissioner shall by regulation require such documentation of the lessor and lessee as to substantiate the credit claimed by this section. (b) A corporation shall not be allowed a credit under paragraph (a) with respect to tangible personal property and other tangible property, including buildings and structural components of buildings, which it leases as a lessor. For the purposes of the preceding sentence, any contract or agreement to lease or rent or for a license to use such property shall be considered a lease. (c) The credit allowed under this section for any taxable year shall not reduce the excise to less than the amount due under section thirty-nine (b) or sixty-seven and under any act in addition thereto. (d) A corporation may elect to deduct the amount allowable under section thirty-eight D or the credit under this section, but not both. Any such election must be made on or before the due date of filing the return, including any extension of time and shall be irrevocable. (e) With respect to property which is disposed of or ceases to be in qualified use prior to the end of the taxable year in which the credit is to be taken, the amount of the credit shall be that portion of the credit provided for in paragraph (a) which represents the ratio which the months of qualified use bear to the months of useful life. If property on which credit has been taken is disposed of or ceases to be in qualified use prior to the end of its useful life, the difference between the credit taken and the credit allowed for actual use must be added back as additional taxes due in the year of disposition; provided, however, if such property is disposed of or ceases to be in qualified use after it has been in qualified use for more than twelve consecutive years, it shall not be necessary to add back the credit, as provided in this paragraph. The amount of credit allowed for actual use shall be determined by multiplying the original credit by the ratio which the months of qualified use bear to the months of useful life. For the purposes of this paragraph, useful life of property shall be the same as that used by the corporation for depreciation purposes when computing federal income tax liability. (f) A corporation renting or leasing tangible property otherwise qualifying for the credit under this section from a regional business development corporation or authority authorized under chapter forty D or a regional business development corporation organized as a non-profit corporation under any special act shall be deemed to have acquired such property by purchase as defined under Sec. 179(d) of the Federal Internal Revenue Code, as amended and in effect for the taxable year, for the purposes of this section and shall be eligible for the credit under paragraph (a). The amount of such credit shall be one per cent of the value of qualifying property leased and placed in qualified use during the taxable year. Such value shall be the cost of such property to the regional business development corporation and the books and records of such corporation shall for the purposes of this section be open to the commissioner for inspection. For the purposes of this section, a termination or cessation of such rental or lease for any reason other than a transfer of ownership of such property to the lessee shall be considered a disposition of such property. No further credit shall be allowed to such lessee or any successor corporation, as the case may be, on account of such property in the event of successive rentals or leases, replacement, alteration or change of the property rented or leased; transfer of ownership of such property to the lessee; or the merger, consolidation or other reorganization of such lessee. (g) Any corporation entitled to a credit for any taxable year in accordance with the provisions of paragraphs (a) to (f), inclusive, may carry over and apply to its excise for any one or more of the next succeeding three taxable years, the portion, as reduced from year to year, of its credit which exceeds its excise for the taxable year. (h) Any corporation entitled to a credit for any taxable year under this section shall apply it only to its excise for any of the eligible taxable years. (i) A manufacturing corporation, or a business corporation engaged primarily in research and development, which has been deemed to be such under section forty-two B, or a corporation primarily engaged in agriculture or commercial fishing, shall be allowed a credit as hereinafter provided against its excise due under this chapter. The amount of such credit shall be three percent of the cost or other basis for federal income tax purposes of qualifying tangible property acquired, constructed, reconstructed, or erected during the taxable year, after deduction therefrom of any federally authorized tax credit taken with respect to such property. Qualifying property shall be tangible personal property and other tangible property including buildings and structural components of buildings acquired by purchase, as defined under section one hundred and seventy-nine (d) of the Federal Internal Revenue Code as amended and in effect for the taxable year is not taxable under chapter sixty A; used by the corporation in the commonwealth; situated in the commonwealth on the last day of the taxable year; and which is depreciable under section one hundred and sixty-seven of said Code and has a useful life of four years or more. A manufacturing corporation, or a business corporation engaged primarily in research and development, which has been deemed to be such under section forty-two B, or a corporation primarily engaged in agriculture or commercial fishing, shall be allowed a credit against its excise due under this chapter for tangible personal property leased pursuant to an operating lease as hereinafter provided. The amount of such credit afforded to a lessee corporation with respect to such tangible personal property shall be three percent of the lessor's adjusted basis in the property for federal income tax purposes at the beginning of the lease term, multiplied by a fraction, the numerator of which shall be the number of days of the taxable year during which the lessee corporation leases the tangible personal property and the denominator of which shall be the number of days in the useful life of such property. Such useful life shall be the same as that used by the lessor for depreciation purposes when computing federal income tax liability. An operating lease shall be any contract or agreement to lease or rent or for a license to use such property provided that (i) said lease does not constitute a purchase as defined under section one hundred and seventy-nine (d) of the Code, as amended and in effect for the taxable year, (ii) such property is not taxable under chapter sixty A, (iii) such property is used by the lessee corporation in the commonwealth, (iv) such property is situated in the commonwealth throughout the entire lease term, and (v) such property is depreciable by the lessor under section one hundred and sixty-seven of said Code and has a useful life of four years or more. Such credit shall not be available to a lessee if such lessor has previously received a credit with respect to the leased tangible personal property. The commissioner shall by regulation require such documentation of the lessor and lessee as to substantiate the credit claimed by this section. (j) A corporation renting or leasing tangible property otherwise qualifying for the credit under this section from a regional business development corporation or authority authorized under chapter forty D or a regional business development corporation organized as a non-profit corporation under any special act shall be deemed to have acquired such property by purchase as defined under Sec. 179(d) of the Federal Internal Revenue Code, as amended and in effect for the taxable year, for the purposes of this section and shall be eligible for the credit under paragraph (a). The amount of such credit shall be three percent of the value of qualifying property leased and placed in qualified use during the taxable year. Such value shall be the cost of such property to the regional business development corporation and the books and records of such corporation shall for the purposes of this section be open to the commissioner for inspection. For the purposes of this section a termination or cessation of such rental or lease for any reason other than a transfer of ownership of such property to the lessee shall be considered a disposition of such property. No further credit shall be allowed to such lessee or any successor corporation, as the case may be, on account of such property in the event of successive rentals or lease, replacement, alteration or change of the property rented or leased; transfer of ownership of such property to the lessee; or the merger, consolidation or other reorganization of such lessee. (k) Paragraphs (a) and (f) shall not be available for the taxable years ending on or after December 31, 1993. (l) Paragraphs (i) and (j) shall be available only for the taxable years ending on or after December 31, 1993. (m) For the purposes of this section, the provisions of paragraphs (b), (c), (d), (e), (g), and (h) shall apply to paragraphs (i) and (j) as appropriate.

M.G.L. c. 63, § 31C Credit for certain corporations; increase in number of full-time employees

c. 63, § 31C. Credit for certain corporations; increase in number of full-time employees Section 31C. A manufacturing corporation, or a business corporation engaged primarily in research and development, which has been deemed to be such under section thirty-eight C or forty-two B, shall be allowed a credit as hereinafter provided against its excise due under this chapter. The amount of such credit shall be the amount determined by multiplying five hundred dollars by the increase in the number of full-time employees employed by the corporation during the taxable year, as hereinafter provided. When used in this section the following terms shall have the following meanings:— ''Full-time employee'', an employee as defined in sections one and three of chapter one hundred and fifty-one A and who has been paid by the corporation during its taxable year an amount at least equal to the maximum amount of ''wages'' with respect to which an employer is required to make contributions pursuant to section fourteen of said chapter and said amount is includable in the payroll factor of the income apportionment formula under the provisions of section thirty-eight. ''Increase in the number of full-time employees employed by the corporation'', (i) in the case of a corporation having full-time employees in its taxable year ending last prior to December thirty-first, nineteen hundred and seventy-three, the excess of the number of full-time employees employed by the corporation during its taxable year over the number determined by multiplying the number of full-time employees employed by the corporation during its taxable year ending last prior to December thirty-first, nineteen hundred and seventy-three, by the applicable coefficient for the taxable year, as herein set forth. The coefficient shall be one and three hundredths for taxable years ended on or after December thirty-first, nineteen hundred and seventy-three, and before December thirty-first, nineteen hundred and seventy-four; one and six hundredths for taxable years ended on or after December thirty-first, nineteen hundred and seventy-four, and before December thirty-first, nineteen hundred and seventy-five; one and nine hundredths for taxable years ended on or after December thirty-first, nineteen hundred and seventy-five, and before December thirty-first, nineteen hundred and seventy-six; one and twelve hundredths for taxable years ended on or after December thirty-first, nineteen hundred and seventy-six, and before December thirty-first, nineteen hundred and seventy-seven; and one and fifteen hundredths for taxable years ended on or after December thirty-first, nineteen hundred and seventy-seven, and before December thirty-first, nineteen hundred and seventy-eight; (ii) in the case of a corporation not having a taxable year ending prior to December thirty-first, nineteen hundred and seventy-three, by reason of recent organization or registration or by reason of not being subject to taxation in the commonwealth or not having any full-time employees in its taxable year ending last prior to December thirty-first, nineteen hundred and seventy-three, the excess of the number of full-time employees employed by the corporation during its taxable year over the number determined by multiplying the number of full-time employees employed by the corporation in the first taxable year in which the corporation may take the credit provided for in this section by the applicable coefficient for the taxable year as herein set forth. The coefficient shall be zero for the first taxable year. The coefficient shall be twenty hundredths for the second taxable year. The coefficient shall be forty hundredths for the third taxable year. The coefficient shall be sixty hundredths for the fourth taxable year. The coefficient shall be eighty hundredths for the fifth taxable year. (a) A corporation which is a successor to another employing unit, as defined in section one of chapter one hundred and fifty-one A, by reason of an acquisition or other activity referred to in subsections (d) to (h), inclusive, of section eight of said chapter one hundred and fifty-one A shall, for purposes of this section, treat the employees of such employing unit as having been employees of the corporation during the periods they were employees of such employing unit. For the purposes of this section the activities referred to in said subsections (d) to (h), inclusive, of said section eight of said chapter one hundred and fifty-one A shall include but not be limited to applicable provisions of sections three hundred and one to three hundred and ninety-five, inclusive, of the Internal Revenue Code, as amended, and in effect for the taxable year relating to corporate distributions and adjustments. For the purpose of this section, a corporation having a taxable year ending prior to December thirty-first, nineteen hundred and seventy-three, shall be treated as if it had such a taxable year if, under this paragraph, the corporation is treated as having employees prior to such date. (b) For a corporation having a taxable year of less than twelve months, herein referred to as a short period, an employee shall be deemed to be a full-time employee if the amount of the remuneration paid to him by the corporation during the short period when multiplied by twelve and divided by the number of months in the short period is at least equal to the maximum amount of wages with respect to which an employer is required to make contributions pursuant to section fourteen of chapter one hundred and fifty-one A. The credit for a short period shall be computed in the same manner as for a full taxable year but shall be reduced by multiplying the credit so determined by the number of months in the short period and dividing the result by twelve. (c) A corporation shall not be allowed a credit under this section with respect to any increase in the number of full-time employees employed by the corporation during its taxable year and first employed by such corporation during a taxable year ending on or after December thirty-one, nineteen hundred and seventy-three, in excess of the sum of the following:— (1) the number of full-time employees employed by such corporation during such taxable year who immediately prior to employment by such corporation:— (i) were receiving assistance under the provisions of chapters one hundred and fifteen, one hundred and seventeen or one hundred and eighteen; provided that certification of the receipt of such assistance shall be obtained from the secretary of health and human services and shall be in such form as the commissioner shall prescribe; (ii) had filed for and were receiving a money allowance under the provisions of chapter one hundred and fifty-one A, provided that eligibility to receive such money allowance shall be based solely on wages paid by an employer or employers other than such corporation or employing unit; and, provided further that certification of such eligibility and such receipt shall be obtained from the secretary of manpower affairs and shall be in such form as the commissioner shall prescribe; (iii) were receiving training in a publicly or privately funded training or rehabilitation program, including courses of instruction in recognized public or private educational institutions, approved by the director of career services or the secretary of health and human services, whichever is appropriate, as one established to upgrade the job skills, wages and employment or promotional possibilities of persons who have already entered the work force, not including students regularly enrolled in such courses of instruction in such institutions; provided that certification of the approval of such program and the receipt of such training shall be obtained from such secretary and shall be in such form as the commissioner shall prescribe; (iv) were receiving training under an approved training or assistance program as defined in paragraph (b) of section eleven of chapter twenty-three B; provided that certification of the approval of such program and the receipt of such training shall be obtained from the director of housing and community development and shall be in such form as the commissioner shall prescribe; (v) were receiving training or had received training in any program operated by the department of corrections for persons committed to its custody under the provisions of section forty-eight of chapter one hundred and twenty-seven which will upgrade the job skills and employment possibilities of the participants in such program; provided that certification of the receipt of such training shall be obtained from the secretary of human services and shall be in such form as the commissioner shall prescribe; (2) the number of full-time employees employed by such corporation during such taxable year who immediately prior to employment by such corporation were not receiving or had not received such assistance, allowance or training, but who subsequent to such employment completed or at the close of such taxable year were participating in a training or rehabilitation program which is conducted or subsidized by such employer and established in accordance with guidelines prescribed by the director of career services and certified by said director as one which had the prior approval of said director and as one which will upgrade the job skills, wages, and promotional possibilities of the participants in such programs; provided that such certification shall be in such form as the commissioner shall prescribe. In order to verify the certification required by clauses (i) to (v), inclusive, or otherwise determine the eligibility of an employee under this subsection the commissioner is authorized to receive information with respect thereto from the appropriate secretary or department notwithstanding any other provision of law which may prohibit the disclosure of such information. (d) The credit allowed under this section shall be in addition to the credit allowed under section thirty-one A; provided, however, that the sum of the credit allowed under said section thirty-one A and the credit allowed under this section shall not reduce the excise to less than the amount due under subsection (b) of section thirty-two, subsection (b) of section thirty-nine or section sixty-seven and under any act in addition thereto. A corporation may elect to deduct the amount allowable under section thirty-eight F or the credit under this section, but not both. Any such election must be made annually on or before the due date of filing the return, including any extension of time and shall be irrevocable. The credit allowed by all provisions of this section except subdivision (2) of subsection (c) shall be for taxable years ending on and after December thirty-first, nineteen hundred and seventy-three, and prior to December thirty-first, nineteen hundred and seventy-eight, and the credit allowed under the provisions of said subdivision (2) of said subsection (c) shall be for taxable years ending on and after December thirty-first, nineteen hundred and seventy-four, and prior to December thirty-first, nineteen hundred and seventy-eight; provided that any corporation claiming such credit shall furnish such information relative to the credit as may be required by the commissioner in a form approved by the commissioner.

M.G.L. c. 63, § 31D Definitions applicable to Secs. 31D to 31F

c. 63, § 31D. Definitions applicable to Secs. 31D to 31F Section 31D. As used in sections thirty-one D to thirty-one F, inclusive, the following words shall, unless the context requires otherwise, have the following meanings:— ''Commuting student'', a full-time student at a college, university or other postsecondary educational institution, who travels between his residence and an educational institution on a regular basis. ''Company shuttle van'', a highway vehicle which meets all of the following criteria: (1) has a seating capacity of at least seven adults, including the driver; (2) at least eighty per cent of the mileage of which reasonably can be expected to be for the purpose of transporting taxpayer's employees between their residence, or public transportation facilities that interface with such routes and their place of employment within the commonwealth, provided, however, that the number of employees transported on such trips is at least one half of the adult seating capacity of such vehicle, not including the driver. ''Employee'', either of the following: (1) an individual who performs service for an employer for more than eight hours per week for remuneration, or (2) any commuting student. ''Employer'', a taxpayer who is either of the following: (1) a person for whom services are performed by employees, except government agencies, or (2) a private educational institution which enrolls students at higher than the secondary level. ''Employer sponsored ride sharing incentive program'', a program undertaken by an employer either alone or in cooperation with other employers to encourage or provide fiscal or other incentives to employees to make the home to work commute trip by any mode other than the single occupant motor vehicle. ''Ride sharing'', travel by any mode other than the single occupant motor vehicle including, but not limited to, carpooling, vanpooling, public or private buspooling, subscription taxipooling, and public transit, either in highway traffic or on ways or lanes designated for the exclusive use of carpools, vanpools, public or private buspools, subscription taxipools and public transit. ''Third-party vanpool'', a vanpool that is not administered and operated by an employer or his employees, but is administered and operated by an outside organization, including a government agency, which makes vehicles and other equipment and services available for use by employers and their employees. ''Vanpool'', seven or more persons commuting on a daily basis to and from work by means of a vehicle with a seating arrangement designed to carry seven to fifteen adults, including the driver.

M.G.L. c. 63, § 31E Credit for company shuttle van purchase or lease expenses

c. 63, § 31E. Credit for company shuttle van purchase or lease expenses Section 31E. (a) A business corporation shall be allowed a credit against its excise due under this chapter equal to thirty per cent of the cost incurred during the taxable year for the purchase of company shuttle vans, as defined under section one hundred and seventy-nine (d) of the federal Internal Revenue Code, as amended and in effect for the taxable year, or lease of company shuttle vans, as defined in section thirty-one D of chapter sixty-three, used by the corporation in the commonwealth and situated in the commonwealth on the last day of the taxable year. (b) With respect to company shuttle vans so leased and placed in qualified use during the taxable year, the amount of the credit allowed hereunder shall be thirty per cent of the lease or contract payment incurred during the taxable year, excluding insurance, maintenance, fuel, driver's salaries, finance charges or other operating expenses. (c) The depreciation deduction that may be taken with respect to any motor vehicle qualifying for a credit hereunder shall be based on its cost less the credit allowable hereunder. (d) The credit allowed hereunder for any taxable year shall not reduce the excise to less than the amount due under section thirty-nine (b) or sixty-seven. The limitation provided under section thirty-two C shall also apply to any credit allowed hereunder. (e) With respect to property which is disposed of or ceases to be in qualified use prior to the end of the taxable year in which the credit is to be taken, the amount of the credit shall be that portion of the credit provided for in paragraph (a) which represents the ratio which the months of qualified use bear to the months of useful life. If property on which credit has been taken is disposed of or ceases to be in qualified use prior to the end of its useful life, the difference between the credit taken and the credit allowed for actual use must be added back as additional taxes due in the year of disposition; provided, however, that if such property is disposed of or ceases to be in qualified use after it has been in qualified use for more than four consecutive years, it shall not be necessary to add back the credit, as herein provided. The amount of credit allowed for actual use shall be determined by multiplying the original credit by the ratio which the months of qualified use bear to the months of useful life. For the purposes of this paragraph, ''useful life of property'' shall be the same as that used by the corporation for depreciation purposes when computing federal income tax liability. (f) The credit allowed hereunder shall not apply to any property which would otherwise be required as part of the employer's business activities in the absence of an employer-sponsored ride sharing incentive program, as defined in section thirty-one D of chapter sixty-three. (g) The credit provided by this section shall apply to taxable years ending on or after December thirty-first, nineteen hundred and eighty-eight.

M.G.L. c. 63, § 31F Vanpool vehicle registration; fee

c. 63, § 31F. Vanpool vehicle registration; fee Section 31F. (a) Upon registration of a vanpool vehicle, registration plates for each vehicle shall be provided which include the word VANPOOL on the face thereof. (b) There shall be no vehicle registration fee required for vanpool vehicle owners who are able to establish the following: (1) the vanpool vehicle will be used principally for the purpose of carrying employees between their residences and their places of employment or nearby public transportation facilities. (2) there is a signed list of seven persons, including the driver of the vanpool vehicle, who have agreed to participate in the vanpool for at least eleven of the twelve months subsequent to the registration of the vehicle. (3) such vehicle is covered by a policy of insurance which shall indemnify the insured against any liability for personal injury, the death of any person or property damage, which injury, death or damage may result from or have been caused by the use or operation of the vanpool vehicle described in the contract of insurance. The amount of such insurance or indemnity against claims for personal injury or death shall be not less than one million dollars. Any person or company issuing any such insurance or indemnity bond shall file a certificate with the registrar of motor vehicles in such form as may be prescribed by said registrar. No such insurance or bond shall be subject to nonrenewal or cancellation while the registration is in force unless said registrar has been given at least twenty days' written notice prior to the effective date of nonrenewal or cancellation. If within such twenty day period said registrar is not presented with satisfactory evidence that other insurance or another indemnity bond has been obtained the registration shall be revoked. Liability under such insurance policy or bond shall continue beyond such twenty day notification period until such time as the registration for such vanpool vehicle has been surrendered and its plates have been returned to said registrar, but in no case shall such liability continue for more than ten days after such notification period has expired. (c) If the vanpool owner is unable to establish the conditions of paragraph (b), the vehicle registration fee for each vanpool vehicle shall in no instance exceed the fee which would be required to be paid for such vehicle if it were not used for the purpose of vanpooling.

M.G.L. c. 63, § 31H Definitions; state low-income housing tax credit; eligibility; allocation; recapture

c. 63, § 31H. Definitions; state low-income housing tax credit; eligibility; allocation; recapture Section 31H. (a) For the purposes of this section, unless the context clearly requires otherwise, the following words shall have the following meanings:— ''Commissioner'', the commissioner of the department of revenue. ''Compliance period'', the period of 15 taxable years beginning with the first taxable year the Massachusetts low-income housing tax credit is claimed. ''Department'', the executive office of housing and livable communities or its successor office or agency. ''Eligibility statement'', a statement authorized and issued by the department certifying that a given project is a qualified Massachusetts project. The department, in consultation with the commissioner, shall promulgate regulations establishing criteria upon which the eligibility statements shall be issued. The eligibility statement shall specify the maximum annual amount of the Massachusetts low-income housing tax credit authorized. The department shall only authorize the tax credits to qualified Massachusetts projects which are placed in service on or after January 1, 2001. ''Federal low-income housing tax credit'', the federal tax credit as provided in Section 42 of the 1986 Internal Revenue Code, as amended and in effect for the taxable year. ''Low-income project'', a qualified low-income housing project, as defined in section 42 of the 1986 Internal Revenue Code, as amended and in effect for the taxable year, which has restricted rents that do not exceed 30 per cent of the applicable imputed income limitation under said section 42 of said Code, for at least 40 per cent of its units occupied by persons or families having incomes of 60 per cent or less of the median income, or at least 20 per cent of the units occupied by persons or families having incomes of 50 per cent or less of the median income. ''Median income'', the area median gross income as such term is used in section 42 of the 1986 Internal Revenue Code as amended and in effect for the taxable year, and which is determined by the federal department of housing and urban development guidelines and adjusted for family size. ''Qualified Donation'', real or personal property given to a sponsor to purchase, construct, or rehabilitate a qualified Massachusetts project. ''Qualified Massachusetts project'', a qualified low-income housing project as that term is defined in section 42 of the 1986 Internal Revenue Code, as amended and in effect for the taxable year, which is located in the commonwealth, which meets the requirements of this section, and whose owner enters into a regulatory agreement with the department enforceable by state and local agencies. ''Regulatory agreement'', an agreement between the owner of the qualified Massachusetts project in the commonwealth and the department and recorded as an affordable housing restriction under chapter 184 with the registry of deeds in the county where the property is located that requires the qualified Massachusetts project to be operated in accordance with the requirements of this section for not less than 30 years from the expiration date of the compliance period. Such agreement may be subordinated to the lien of a bank or other institutional lender providing financing to the qualified Massachusetts project, upon the request of such bank or lender. ''Sponsor'', a nonprofit organization which: (i) has been issued a ruling from the United States Internal Revenue Service that the organization is exempt from income taxation pursuant to section 501(c)(3) of the Internal Revenue Code; (ii) has material control over the operations of a qualified Massachusetts project; and (iii) either (A) is a certified Community Development Corporation, as defined in chapter 40H; (B) is a certified Community Housing Development Organization pursuant to 24 CFR section 92.2; or (C) is determined by the department to have a history of successful development of affordable housing projects in the commonwealth. ''Taxpayer'', a corporation subject to an excise imposed by the provisions of this chapter, including, without limitations, section 2, sections 20 to 23, inclusive, section 29A, section 32 and section 39. [Paragraph (1) of subsection (b) effective for taxable years beginning on or after January 1, 2023. See 2023, 50 Sec. 49.] (b)(1) There shall be a Massachusetts low-income housing tax credit. The department may authorize annually under this section together with section 6I of chapter 62 the total sum of: (i) $60,000,000; (ii) unused Massachusetts low-income housing tax credits, if any, for the preceding calendar years; and (iii) any Massachusetts low-income housing tax credits returned to the department by a qualified Massachusetts project. (2) Unless otherwise provided in this section or the context clearly requires otherwise, the department shall authorize, administer, determine eligibility for the Massachusetts low-income housing tax credit and allocate the credit in accordance with the standards and requirements as set forth in section 42 of the 1986 Internal Revenue Code, as amended and in effect for the taxable year; provided, however, that the combined federal and Massachusetts low-income housing tax credit shall be the least amount necessary to ensure financial feasibility. (3) The department shall allocate the total available Massachusetts low-income housing tax credit among as many qualified Massachusetts projects as fiscally feasible, with the goal of increasing the commonwealth's stock of affordable housing units. (4) The department may allocate Massachusetts low-income housing tax credits pursuant to this section for a qualified donation by a taxpayer. The total Massachusetts low-income housing tax credit available to a taxpayer for a qualified donation shall be equal to 50 per cent of the donation's value, as determined by the department; provided, however, that the department may increase the amount of available credit for a qualified donation to not more than 65 per cent of the donation's value if it deems the increase to be necessary to the project's viability. For the purposes of counting an authorization of Massachusetts low-income housing tax credit towards the total sum that the department may authorize annually pursuant to part (i) of paragraph (1) of subsection (b), the department and the commissioner shall count any amount of Massachusetts low-income housing tax credit authorized to a taxpayer for a qualified donation as 1/5 of the amount authorized for the qualified donation. [Paragraph (1) of subsection (c) effective for tax years beginning on or after January 1, 2019. See 2018, 99, Sec. 35 as amended by 2018, 162, Sec. 1.] (c)(1) A taxpayer may be allowed a state tax credit with respect to a qualified Massachusetts project, whether by qualified donation or otherwise, provided that the department issues an eligibility statement for that qualified Massachusetts project. This state tax credit shall be termed the Massachusetts low-income housing tax credit. (2) The total Massachusetts low-income housing tax credit available to a qualified Massachusetts project shall be authorized and allocated by the department, or its successor agency, based on the qualified Massachusetts project's need for the credit for economic feasibility. (3) The Massachusetts low-income housing tax credit authorized to a taxpayer with respect to a qualified Massachusetts project other than a qualified donation shall be taken against the taxes imposed pursuant to this chapter, claimed equally for 5 years and subtracted from the amount of state tax otherwise due for each taxable period and shall not be refundable. The Massachusetts low-income housing tax credit authorized to a taxpayer with respect to a qualified Massachusetts project attributable to a qualified donation shall be taken against the taxes imposed pursuant to this chapter, claimed in a single year and subtracted from the amount of state tax otherwise due for the taxable year and shall not be refundable. Any amount of the low-income housing tax credit, whether by qualified donation or otherwise, that exceeds the tax due for a taxable year may be carried forward to any of the 5 subsequent taxable years. (4) All or any portion of Massachusetts tax credits issued in accordance with the provisions of this section may be allocated to parties who are eligible under the provisions of paragraph (1) of subsection (c). An owner of a qualified Massachusetts project shall certify to the commissioner the amount of credit allocated to such owner. The owner of the qualified Massachusetts project shall provide to the commissioner appropriate information so that the low-income housing tax credit can be properly allocated. (5) In the event that recapture of Massachusetts low-income housing tax credits is required pursuant to paragraph (1) or (2) of subsection (d), any statement submitted to the commissioner as provided in subsection (c) shall include the proportion of the state credit required to be recaptured, the identity of each taxpayer subject to the recapture and the amount of credit previously allocated to such taxpayer. (6)(i) A state tax credit allowed under this section shall not be denied to the taxpayer with respect to any qualified Massachusetts project merely by reason of a right of first refusal held by the tenants, in cooperative form or otherwise, or resident management corporation of such building or by a qualified nonprofit organization, as defined in Section 42 of the 1986 Internal Revenue Code, as amended and in effect for the taxable year, or government agency to purchase the qualified Massachusetts project after the close of the compliance period for a price which is not less than the minimum purchase price determined under subparagraph (ii). (ii) the minimum purchase price shall be an amount equal to the sum of the principal amount of outstanding indebtedness secured by the building, other than indebtedness incurred within the five year period ending on the date of the sale pursuant to subparagraph (i), and all federal, state and local taxes attributable to such sale. (7) The director of the department, in consultation with the commissioner, shall promulgate regulations necessary to administer the provisions of this paragraph. (d)(1) The owner of a qualified Massachusetts project eligible for the Massachusetts low-income housing tax credit shall submit, at the time of filing the project owner's state tax return, a copy of the eligibility statement issued by the department with respect to such qualified Massachusetts project. In the case of failure to attach the eligibility statement, a credit under this section shall not be allowed with respect to such qualified Massachusetts project for that year until the copy is provided to the department of revenue. (2) If under Section 42 of the 1986 Internal Revenue Code, as amended and in effect for the taxable year, a portion of any federal low-income housing tax credits taken on a low-income qualified Massachusetts project is required to be recaptured, the Massachusetts low-income housing tax credit authorized by this section with respect to such qualified Massachusetts project shall also be recaptured. The state recapture amount shall be equal to the amount of the state low-income housing tax credits previously claimed times a fraction, the numerator of which shall be the amount of recaptured federal low-income housing tax credits and the denominator of which shall be the amount of federal low-income housing tax credits previously claimed. (e) The commissioner or the department may require the filing of additional documentation necessary to determine the eligibility or accuracy of a tax credit claimed under the provisions of this section through the promulgation of regulations. (f)(1) All or any portion of tax credits issued in accordance with the provisions of this section may be transferred, sold or assigned to parties who are eligible under the provisions of paragraph (1) of subsection (c). (2) An owner or transferee desiring to make a transfer, sale or assignment as described in paragraph (1) of subsection (f) shall submit to the commissioner a statement which describes the amount of Massachusetts low-income housing tax credit for which such transfer, sale or assignment of Massachusetts low-income housing tax credit is eligible. The owner shall provide to the commissioner appropriate information so that the low-income housing tax credit can be properly allocated. (3) In the event that recapture of Massachusetts low-income housing tax credits is required pursuant to paragraph (1) or (2) of subsection (d), any statement submitted to the commissioner as provided in paragraph (2) of subsection (f) shall include the proportion of the Massachusetts low-income housing tax credit required to be recaptured, the identity of each transferee subject to recapture and the amount of credit previously transferred to such transferee. (4) The commissioner, in consultation with the department, shall promulgate regulations necessary for the administration of the provisions of this subsection. (g) The department, in consultation with the commissioner, shall monitor and oversee compliance with the Massachusetts low-income housing tax credit program and may promulgate regulations requiring the filing of additional documentation deemed necessary to determine continuing eligibility for the Massachusetts low-income housing tax credit. The department or the commissioner shall report specific occurrences of noncompliance to appropriate state, federal and local authorities. (h) Except for unused credits carried forward pursuant to paragraph (3) of subsection (c) of section 6I of chapter 62 and paragraph (3) of subsection (c) of this section, and except for credits claimed under regulations promulgated by the department consistent with the special rule set forth in paragraph (2) of subsection (f) of section 42 of the 1986 Internal Revenue Code, as amended and in effect for the taxable year, a qualified Massachusetts project shall not be eligible for any Massachusetts low-income housing tax credits for more than 11 taxable years. (i) The department may provide that upon application for state tax credits issued by the department, such taxpayer may elect to receive such state tax credit in the form of a loan generated by transferring the credit to the department or its designee on terms specified by the department in accordance with its qualified allocation plan. Neither a direct tax refund nor a loan received as the result of the transfer of the credit shall be considered taxable income under this chapter. (j) The department may pursue methods of enhancing the efficiency of the Massachusetts low-income housing tax credit program including but not limited to; pursuing opinions from the United States department of treasury's internal revenue service in the form of general counsel memoranda, private letter rulings and other notices, rulings or guidelines and reviewing other state low income housing tax programs which utilize an option for taxpayers to receive such tax credit in the form of a loan generated by transferring the credit to a designated state entity.

M.G.L. c. 63, § 31I Transactions with related members; adding back of certain deductions

c. 63, § 31I. Transactions with related members; adding back of certain deductions Section 31I. (a) As used in this section, the following words shall, unless the context requires otherwise, have the following meanings:— ''Code'', the federal Internal Revenue Code as amended and in effect for the taxable year. ''Intangible expenses and costs'', includes (1) expenses, losses and costs for, related to, or in connection directly or indirectly with the direct or indirect acquisition, use, maintenance or management, ownership, sale, exchange, or any other disposition of intangible property to the extent such amounts are allowed as deductions or costs in determining taxable income before operating loss deductions and special deductions for the taxable year under the Code; (2) losses related to, or incurred in connection directly or indirectly with, factoring transactions or discounting transactions; (3) royalty, patent, technical and copyright fees; (4) licensing fees; and (5) other similar expenses and costs. ''Intangible property'', patents, patent applications, trade names, trademarks, service marks, copyrights, mask works, trade secrets and similar types of intangible assets. ''Interest expenses and costs'', amounts directly or indirectly allowed as deductions under section 163 of the Code for purposes of determining taxable income under the Code to the extent such expenses and costs are directly or indirectly for, related to, or in connection with the direct or indirect acquisition, maintenance, management, ownership, sale, exchange or disposition of intangible property. ''Related member'', a person that, with respect to the taxpayer during all or any portion of the taxable year, is: (1) a related entity, (2) a component member as defined in subsection (b) of section 1563 of the Code; (3) a person to or from whom there is attribution of stock ownership in accordance with subsection (e) of section 1563 of the Code; or (4) a person that, notwithstanding its form of organization, bears the same relationship to the taxpayer as a person described in (1) to (3), inclusive. ''Related entity'', (1) a stockholder who is an individual, or a member of the stockholder's family set forth in section 318 of the Code if the stockholder and the members of the stockholder's family own, directly, indirectly, beneficially or constructively, in the aggregate, at least 50 per cent of the value of the taxpayer's outstanding stock; (2) a stockholder, or a stockholder's partnership, limited liability company, estate, trust or corporation, if the stockholder and the stockholder's partnerships, limited liability companies, estates, trusts and corporations own directly, indirectly, beneficially or constructively, in the aggregate, at least 50 per cent of the value of the taxpayer's outstanding stock; or (3) a corporation, or a party related to the corporation in a manner that would require an attribution of stock from the corporation to the party or from the party to the corporation under the attribution rules of the Code if the taxpayer owns, directly, indirectly, beneficially or constructively, at least 50 per cent of the value of the corporation's outstanding stock. The attribution rules of the Code shall apply for purposes of determining whether the ownership requirements of this definition have been met. (b) For purposes of computing its net income under this chapter, a taxpayer shall add back otherwise deductible interest expenses and costs and intangible expenses and costs directly or indirectly paid, accrued or incurred to, or in connection directly or indirectly with one or more direct or indirect transactions with, one or more related members. (c) (i) The adjustments required in subsection (b) shall not apply if: (A) the taxpayer establishes by clear and convincing evidence, as determined by the commissioner, that the adjustments are unreasonable; or (B) the taxpayer and the commissioner agree in writing to the application or use of an alternative method of apportionment under section 42. Nothing in this subsection shall be construed to limit or negate the commissioner's authority to otherwise enter into agreements and compromises otherwise allowed by law. (ii) The adjustments required in subsection (b) shall not apply to the portion of interest expenses and costs and intangible expenses and costs that the taxpayer establishes by a preponderance of the evidence meets both of the following: (A) the related member during the same taxable year directly or indirectly paid, accrued or incurred such portion to a person that is not a related member, and (B) the transaction giving rise to the interest expenses and costs or the intangible expenses and costs between the taxpayer and the related member did not have as a principal purpose the avoidance of any portion of the tax that would be otherwise due. (d) Nothing in this section shall be construed to limit or negate the commissioner's authority to make adjustments under sections 33 and 39A.

M.G.L. c. 63, § 31J Deductible interest; interest paid to related member; taxpayer's burden to show disallowance of deduction unreasonable

c. 63, § 31J. Deductible interest; interest paid to related member; taxpayer's burden to show disallowance of deduction unreasonable Section 31J. (a) For purposes of computing its net income under this chapter, a taxpayer shall add back otherwise deductible interest paid, accrued or incurred to a related member, as defined in section 31I, during the taxable year, except that a deduction shall be permitted when either: (1) the taxpayer establishes by clear and convincing evidence, as determined by the commissioner, that the disallowance of the deduction is unreasonable, or (2) the taxpayer and the commissioner agree in writing to the application of an alternative method of apportionment under section 42. Nothing in this subsection shall be construed to limit or negate the commissioner's authority to otherwise enter into agreements and compromises otherwise allowed by law. (b) The adjustments required in subsection (a) shall not apply if the taxpayer establishes by clear and convincing evidence, as determined by the commissioner, that: (i) a principal purpose of the transaction giving rise to the payment of interest was not to avoid payment of taxes due under this chapter; (ii) the interest is paid pursuant to a contract that reflects an arm's length rate of interest and terms; and (iii) (A) the related member was subject to tax on its net income in this state or another state or possession of the United States or a foreign nation; (B) a measure of said tax included the interest received from the taxpayer; and (C) the rate of tax applied to the interest received by the related member is no less than the statutory rate of tax applied to the taxpayer under this chapter minus 3 percentage points. (c) For purposes of subsection (a), interest payments by the taxpayer to a person or entity that is not a related member will be treated as if made to a related member if the interest is paid in connection with a debt incurred to acquire the taxpayer's assets or stock in a transaction that is referenced in section 368 of Internal Revenue Code, as amended and in effect for the taxable year. For purposes of this subsection, subsection (b) shall not apply. (d) Nothing in this section shall be construed to limit or negate the commissioner's authority to make adjustments under sections 33 and 39A.

M.G.L. c. 63, § 31K Deductible interest; adjustments; applicability

c. 63, § 31K. Deductible interest; adjustments; applicability Section 31K. The adjustments required in subsection (b) of section 31I as they relate to royalty expenses and costs and related interest expenses and costs, and in subsection (a) of section 31J as they relate to interest expenses and costs, shall not apply if the taxpayer establishes by clear and convincing evidence, as determined by the commissioner and consistent with section 3A of chapter 62C that: (1) the royalty expenses and costs and related interest expenses and costs under section 31I, or interest expenses and costs under section 31J, were directly or indirectly paid or incurred to a related member, as defined in section 31I, that is not a controlled foreign corporation within the meaning of section 957 of the Internal Revenue Code, as amended and in effect for the taxable year; and (2) all of the following requirements are complied with: (i) the related member is a resident of a nation which has in force a comprehensive income tax treaty with the United States; (ii) the amounts are deductible under federal income tax law; (iii) the transaction giving rise to the royalty expenses and costs and related interest expenses and costs under section 31I, or interest expenses and costs under section 31J, have a valid business purpose other than the avoidance of tax that would otherwise be due; and (iv) all terms and conditions of the transaction would have been agreed to in an arm's length negotiation between independent parties.

M.G.L. c. 63, § 31M Life sciences tax credit

c. 63, § 31M. Life sciences tax credit [Text of section effective until December 31, 2028. Repealed by 2008, 130, Sec. 22. See 2008, 130, Sec. 54 as amended by 2011, 9, Sec. 25; 2013, 46, Sec. 57; and 2018, 112, Sec. 10. See also 2011, 9, Sec. 56; 2013, 46, Sec. 87; and 2018, 273, Sec. 26.] Section 31M. (a) As used in this section, the following words shall, unless the context otherwise requires, have the following meanings:— ''Life sciences'', advanced and applied sciences that expand the understanding of human physiology and have the potential to lead to medical advances or therapeutic applications, including, but not limited to, agricultural biotechnology, biogenerics, bioinformatics, biomedical engineering, biopharmaceuticals, biotechnology, biosecurity, life sciences related artificial intelligence, chemical synthesis, chemistry technology, diagnostics, genomics, image analysis, marine biology, marine technology, medical technology, medical devices, nanotechnology, natural product pharmaceuticals, proteomics, regenerative and preventative medicine, RNA interference, stem cell research and veterinary science. ''Person'', a natural person, corporation, association, partnership or other legal entity. ''Primarily'', more than 50 per cent. ''Research and development costs'', in-house research expenses within the meaning of section 41(b)(2) of the Internal Revenue Code. ''Taxpayer'', a certified life sciences company or person subject to the taxes imposed by chapters 62, 63, 64H or 64I. ''User fees'', the monetary amount actually paid by a taxpayer to the U.S.F.D.A. that constitutes the fee due upon the submission of a human drug application or supplement pursuant to 21 U.S.C. section 379h(a)(1) for a human drug, the research and development costs of which, were primarily incurred in the commonwealth. ''U.S.F.D.A.'', the United States Food and Drug Administration. (b) Except as otherwise limited by subsection (e), a taxpayer may, to the extent authorized pursuant to the life sciences tax incentive program established by said section 5 of chapter 23I, be allowed a refundable credit against the tax liability imposed under this chapter in an amount equal to 100 per cent of the cost of user fees paid by such company. (c) A taxpayer shall claim the credit in the taxable year in which its application for the licensure of an establishment to manufacture the human drug in the commonwealth is approved by the U.S.F.D.A. (d) The credit allowed may reduce the excise due under subsection (b) of section 32, or subsection (b) of section 39. The credit allowed to a taxpayer shall not be subject to the provisions of section 32C. Where such credit allowed to a taxpayer exceeds the excise otherwise due under said subsection (b) of section 32 or subsection (b) of said section 39, 90 per cent of the balance of that credit may, at the option of the taxpayer and to the extent authorized pursuant to the life sciences tax incentive program established by said section 5 of said chapter 23I, be refundable to the taxpayer for the taxable year in which the credit is claimed. If a taxpayer files as a member of a combined group and applies its excess credit against the excise of another group member, then the credit as applied to corporations other than such taxpayer is not subject to section 32C and may reduce to zero the excise due under subsection (b) of section 32, or subsection (b) of section 39 and under any act in addition thereto. Where such credit allowed to a taxpayer that is applied against the excise liability of such other corporations exceeds the excise otherwise due to such corporations under this chapter, 90 per cent of the balance of that credit may, at the option of the taxpayer and to the extent authorized pursuant to the life sciences tax incentive program, be refundable to the taxpayer for the taxable year in which the credit is claimed. (e) For the purposes of section 30, the deduction from gross income that may be taken with respect to any expenditures qualifying for the credit under this section is disallowed to the extent of the credit. (f) Only user fees paid by a taxpayer to the U.S.F.D.A. on or after the effective date of this section shall be eligible for the credit.

M.G.L. c. 63, § 31N Determination of gross income; adjustment to federal gross income

c. 63, § 31N. Determination of gross income; adjustment to federal gross income Section 31N. In determining gross income under this chapter, if the federal gross income includes any item of gain or has been reduced by any item of loss, with respect to property, then the federal gross income shall be increased by the excess of the federal adjusted basis of the property over the Massachusetts adjusted basis of the property, and shall be decreased by the excess of the Massachusetts adjusted basis of the property over the federal adjusted basis of the property, so that the gain or loss realized for Massachusetts purposes takes into account all applicable differences in the Massachusetts and federal tax rules over the life of an asset that should, in principle, give rise to differences in basis. The Massachusetts adjusted basis of property shall be the federal adjusted basis, except that: (i) any federal adjustment resulting from provisions of the Code that were not applicable in determining Massachusetts net or gross income at the time the federal adjustments were made shall be disregarded; and (ii) adjustments shall be made for any item that was applicable in determining Massachusetts net or gross income but that was not so applicable in determining federal net or gross income and for which a federal adjustment would be allowed under the Code if the item had been applicable in determining federal net or gross income. Without limitation of the foregoing, the federal basis of shares in a business corporation that was formerly treated as a corporate trust or of shares in a successor of that entity shall be reduced in computing Massachusetts adjusted basis to take into account any tax-free earnings and profits accumulated by the former corporate trust.

M.G.L. c. 63, § 32B Combined reporting; corporations subject to combination; apportionment of income; joint and several liability; regulations; affiliated group election

c. 63, § 32B. Combined reporting; corporations subject to combination; apportionment of income; joint and several liability; regulations; affiliated group election Section 32B. (a) Notwithstanding any other provision of this chapter, a corporation subject to tax under this chapter and engaged in a unitary business with 1 or more corporations subject to combination within the meaning of this section shall, under regulations adopted by the commissioner, calculate its taxable net income derived from this unitary business as its share, attributable to the commonwealth, of the apportionable income or loss of the combined group engaged in the unitary business, determined in accordance with a combined report. In computing the apportionable income or loss of the combined group and of each member thereof, items of income, deductions and receipts from transactions between or among members of the combined group, including but not limited to the payment of dividends, shall be eliminated, subject to regulations as may be adopted pursuant to clause (i) of subsection (f). (b)(1) For purposes of this section, the term ''unitary business'' shall mean the activities of a group of 2 or more corporations under common ownership that are sufficiently interdependent, integrated or interrelated through their activities so as to provide mutual benefit and produce a significant sharing or exchange of value among them or a significant flow of value between the separate parts. The term unitary business shall be construed to the broadest extent permitted under the United States Constitution. (2) For purposes of this section, the words ''common ownership'' shall mean that more than 50 per cent of the voting control of each member of the group is directly or indirectly owned by a common owner or owners, either corporate or non-corporate, whether or not the owner or owners are members of the combined group. A group of corporations under common ownership may be engaged in 1 or more unitary businesses. (3) Any business conducted by a partnership shall be treated as the business of the partners, whether the partnership interest is directly held or indirectly held through a series of partnerships, to the extent of the partner's distributive share of the partnership's income, regardless of the magnitude of the partner's ownership interest or its distributive share of partnership income. A business conducted directly or indirectly by 1 corporation is unitary with that portion of a business conducted by another, commonly owned corporation through its direct or indirect interest in a partnership if the activities conducted by the former corporation and the partnership are unitary within the meaning of paragraph (1) regardless of the magnitude of the partner's ownership interest or its distributive or any other share of partnership income. (c)(1) Corporations that are subject to combination within the meaning of this section shall include an entity of the kind that is subject to tax or would be subject to tax if doing business in the state under section 2, 2B, 32D, 39 or 52A, as well as an entity described in sections 20 to 29E, inclusive, in any case in which the entity does not qualify for treatment as a life insurance company as defined in section 816 of the Code or an insurance company subject to tax imposed by section 831 of the Code. A corporation is subject to combination irrespective of whether the corporation is actually subject to tax under section 2, 2B, 32D, 39 or 52A. A corporation subject to combination includes a real estate investment trust as referenced under sections 856 to 859, inclusive, of the Code and a regulated investment company as referenced under sections 851 to 855, inclusive, of the Code. Any corporation included in the combined group pursuant to this section that is subject to tax under section 2, 2B, 32D, 39 or 52A shall determine that part of its taxable net income or loss that is derived from a unitary business or from an affiliated group pursuant to an election under paragraph (2) of subsection (g). Such corporation shall not be subject to any duplicate inclusion of income or benefit from any duplicate deduction of loss under section 2, 2B, 32D, 39 or 52A. (2) A corporation subject to combination within the meaning of this section shall not include an entity described in section 38B or 38Y. In addition, an entity subject to combination within the meaning of this section shall not include an entity described in sections 20 to 29E, inclusive, except as provided in paragraph (1) or otherwise in this chapter. (3) The members of a combined group subject to tax under this chapter may elect to determine their apportioned share of the taxable net income or loss of the combined group pursuant to a worldwide election under which each taxpayer member, wherever located, shall take into account the income and apportionment factors of all the members includible in the combined group. If the members do not so elect, the combined group shall determine its share of the taxable net income or loss of the combined group on a water's edge basis under which each member shall take into account the income and apportionment factors of only the members that are described in any one or more of the following categories:— (i) any member incorporated in the United States or formed under the laws of the United States, any state, the District of Columbia, or any territory or possession of the United States; (ii) any member, regardless of the place incorporated or formed, if the average of its property, payroll, and sales factors within the United States is 20 per cent or more; (iii) any member that earns more than 20 per cent of its income, directly or indirectly, from intangible property or service-related activities the costs of which generally are deductible for federal income tax purposes, whether currently or over a period of time, against the business income of other members of the group, but only to the extent of that income and the apportionment factors related thereto. A worldwide election shall be effective only if made on a timely-filed, original return for a taxable year by the members of the combined group subject to tax under this chapter. A worldwide election shall be binding for and applicable to the taxable year for which it is made and all taxable years thereafter for a period of 10 years, subject to regulations adopted by the commissioner. (iv) Where a combined group determines its taxable net income or loss on a water's edge basis, an item of income of a corporation that is organized outside of the United States shall not be included in the combined group's taxable income to the extent that such item is exempt from United States federal income tax by virtue of a federal income tax treaty. Any items of expense and apportionment factors related to such item of exempt income shall be excluded in the determination of taxable net income or loss to the extent provided in regulations issued by the commissioner. However, any such item of exempt income shall be taken into account to determine whether the corporation is included in the water's edge group under clause (ii) or (iii). If a corporation organized outside of the United States is included in a water's edge combined group and has an item of income that is exempt from United States federal income tax by virtue of a federal tax treaty, the corporation shall be considered to be included in the combined group under that clause only with regard to any items of income described in that clause that are not so exempt, taking into account items of expense and apportionment factors associated with such items of non-exempt income to the extent provided by regulations issued by the commissioner. Nothing in this clause shall prevent the commissioner from adjusting, under sections 31I, 31J, 31K or 39A of this chapter, section 3A of chapter 62C, or any other provision of law, any deduction claimed by the payer for amounts that are excluded from the combined group's taxable income under this clause. The commissioner may require the reporting of the amounts of such excluded income and the documentation of any claimed treaty exemption as conditions to be met by a payer claiming a deduction of such payments. (d)(1) When used in this section, the following words shall have the following meaning:— ''Combined group's taxable income,'' the aggregate taxable net income or loss subject to apportionment and derived from a unitary business or the aggregate taxable net income or loss from an affiliated group pursuant to an election under paragraph (2) of subsection (g), in either case reported on a combined report in accordance with this section, of every taxable member and non-taxable member of the combined group. ''Non-taxable member,'' a member of the combined group that is not subject to tax under section 2, 2B, 32D, 39 or 52A. ''Taxable member,'' a member of the combined group that is subject to tax under section 2, 2B, 32D, 39 or 52A. (2) A corporation subject to tax under this chapter that is part of a combined group shall apportion its income as follows:— (i) Subject to this subsection, each taxable member shall determine its apportionment percentage based on its specific apportionment formula pursuant to this chapter. (ii) Each taxable member shall compute the numerator of its apportionment factors pursuant to the apportionment provisions of this chapter that apply to such member. Each taxable member shall add to its sales factor numerator its share of Massachusetts sales of non-taxable members based on subparagraph (iv). If a combined group includes one or more members that are financial institutions and one or more members that are not financial institutions, the numerators of the property and sales factors of the members shall be adjusted in the same manner as the denominator adjustments described in subparagraph (iii) and such receipts as are added pursuant to such adjustments shall be sourced as provided in section 2A. [Subparagraph (iii) of paragraph (2) of subsection (d) applicable as provided by 2018, 273, Sec. 69.] (iii) Each member shall calculate its apportionment factor denominators by determining the apportionment factor denominators of every member of the group based upon the apportionment provisions that apply to each member and by aggregating the apportionment factor denominator(s) of each member, regardless of whether any particular member is taxable in the commonwealth. A member shall determine its property and payroll factor denominators by including the property and payroll of all members of the group, including members of the group subject to a single sales factor apportionment formula. Property and payroll of all members, including members subject to single sales factor apportionment, shall be included in the property and payroll denominators of members to which such property and payroll factors apply. If a combined group includes one or more members that are financial institutions and one or more members that are not financial institutions, the following adjustments shall apply: (1) with respect to intangible property included in the property factor denominators of the financial institution members, such intangible property values shall be reduced to 20 per cent of the otherwise determined amounts before combination of the denominators of the group members; (2) receipts described in subsections (d)(i) through (d)(xi) of section 2A of this chapter, taking into account subsection (h) of section 2A, that would be otherwise excluded from the sales factor of members that are not financial institutions shall be added to the denominators of such non-financial members; and (3) in the case of a sale or deemed sale of a business, receipts from the sale of the business ''good will'' or similar intangible value, including without limitation ''going concern value'' and ''workforce in place'', shall not be included in the sales factor denominators of any member. (iv) The Massachusetts sales of each non-taxable member shall be determined based upon the apportionment rules applicable to such member and shall be aggregated. Each taxable member of the group shall include in its sales factor numerator a portion of the aggregate Massachusetts sales of non-taxable members based on a ratio, the numerator of which is such taxable member's Massachusetts sales taking into account its applicable sales factor provisions and the denominator of which is the aggregate Massachusetts sales of all the taxable members of the group taking into account their respective sales factor provisions. For purposes of determining whether sales are in the commonwealth and included in the numerator of the sales factor, a taxpayer is considered taxable in any state in which any member of its combined group is subject to tax. (v) In computing the apportionment percentage of combined group members, each member shall eliminate intercompany transactions, subject to regulations as may be adopted pursuant to clause (i) of subsection (f). (3) To calculate each member's apportioned taxable net income or loss, each member shall apply its apportionment percentage, as determined under subparagraphs (i) to (v), inclusive, of paragraph (2), to the combined group's taxable income, as defined in paragraph (1). (4) Each taxable member shall multiply its apportioned taxable net income or loss by the tax rate applicable to such member pursuant to this chapter. (e) Every member of the combined group shall be jointly and severally liable for the tax due from any taxpayer member under this chapter, including any interest and penalties, to the extent permitted under the constitution of the United States. (f) The commissioner shall adopt regulations to implement this section and to coordinate the application of this section with the other provisions of this chapter. The regulations shall include rules to address without limitation, the following: (i) the elimination of intercompany transactions, including but not limited to the payments of dividends, between or among combined group members, and the elimination or deferral of income, expenses, apportionment factors or other tax items associated with those transactions and including any exceptions to such eliminations or deferrals under rules analogous to those under section 1502 of the Code; (ii) the sharing within the combined group of credits that may be validly claimed by a taxpayer and that are attributable to the combined group's unitary business, to the extent such sharing of credits by a particular member of the combined group is consistent with the statutory requirements for claiming such credits, taking into account the nature of such member's business and related activities; (iii) the application of any carry forwards, including the sharing of any net operating loss or tax credit carry forwards that are attributable to the activities of the combined group's unitary business, but the carry forward of losses, credits or other tax benefits that arise before the effective date of this section shall be available only to the extent permitted by law as in effect before the effective date; and (iv) the relationship of sections 31I to 31K, inclusive, to this section. (g)(i) When used in this section, the following words shall have the following meaning:— ''Affiliated group,'' an affiliated group as defined in section 1504 of the Code except that it shall include all corporations incorporated in the United States or formed under the laws of the United States, any state, the District of Columbia or any territory or possession of the United States that are commonly owned, directly or indirectly, by any member of such affiliated group and other commonly owned corporations as described in paragraph (3) of subsection (c). ''Commonly owned'' shall mean more than 50 per cent of the voting control of such member is directly or indirectly owned by a common owner or owners, either corporate or non-corporate. (ii) A taxpayer may elect, without the consent of the commissioner, to treat as its Massachusetts combined group all corporations that are members of its affiliated group. The corporations referred to above shall include members of such affiliated group that are subject to tax or that would be subject to tax if doing business in the state under section 2, 2B, 32D, 39 or 52A. Such affiliated group shall calculate Massachusetts taxable income in accordance with subsection (d), provided that all income of all group members, whether or not such income would otherwise be subject to apportionment or would be allocable to a particular state in the absence of an election under this subsection, shall be treated as apportionable income for purposes of returns filed pursuant to an election under this subsection. Any such election shall be made on an original, timely filed return by any member of the combined group. Any corporation entering an affiliated group subsequent to the year of election must be included in the Massachusetts combined group and is considered to have waived any objection to its inclusion in the Massachusetts combined group. An election shall be binding for and applicable to the taxable year for which it is made and for the next 9 taxable years. An election may be revoked, or renewed for another 10 taxable years, without the consent of the commissioner after it has been in effect for 10 taxable years, provided however that in the case of a revocation a new election under this subsection shall not be permitted in any of the immediately following three taxable years. The revocation or renewal shall be made on an original, timely filed return for the first taxable year after the completion of a 10–year period for which an election under this subsection was in place. (iii) The Commissioner shall study the use and revenue impact of the affiliated group election provided by this subsection in the first 3 years in which the election is available and shall provide a report to the Chairs of the House and Senate Committees on Ways and Means and to the Chairs of the Joint Committee on Revenue not later than March 15, 2013. Any taxpayer participating in an affiliated group election under this subsection shall provide such information as the commissioner may request for purposes of such analysis, including information relating to tax filings in other jurisdictions, provided that the report by the commissioner shall include only aggregate information, and shall not identify information relating to particular taxpayers.

M.G.L. c. 63, § 32C Maximum amount of credits; carryover

c. 63, § 32C. Maximum amount of credits; carryover Section 32C. Notwithstanding the provisions of sections thirty-one A and thirty-eight E and section eleven of chapter seven hundred and fifty-two of the acts of nineteen hundred and seventy-three, the maximum amount of credits, otherwise allowable in any one taxable year to a corporation, shall not exceed fifty per cent of its excise imposed by section thirty-nine. Any corporation may carry over and apply to its excise for any subsequent taxable year the portion of those credits, as reduced from year to year, which were not allowed by this section.

M.G.L. c. 63, § 32D S corporations; net income measure

c. 63, § 32D. S corporations; net income measure Section 32D. (a) Any business corporation subject to an excise under section 39 which is an S corporation, as defined under section 1361 of the Code, as amended and in effect for the taxable year, shall determine the net income measure of the excise as follows: (i) The net income shall be determined by taking into account subchapter S of said Code. Income or loss shall be determined as if it were realized or incurred directly by an owner subject to taxation under chapter 62 or 63, as applicable. In the case of an S corporation, income shall be included in the net income measure under this subsection to the extent that such income is taxed to the S corporation for federal income tax purposes; and (ii) Any such business corporation which is an S corporation and has total receipts for the taxable year of $6,000,000 or more shall also include in the net income measure of the excise imposed under section 39 an amount determined by multiplying its net income determined to be taxable in accordance with this chapter by 1 of the following rates, in lieu of the rate provided in said section 39:— (1) when the total receipts for the taxable year are at least $6,000,000 but less than $9,000,000, the rate shall be two-thirds of the rate specified in clause (2); and (2) when the total receipts for the taxable year are $9,000,000 or more, the rate in any taxable year shall be calculated by subtracting the rate applicable to Part B taxable income for that year in subsection (b) of section 4 of chapter 62 from the rate applicable to business corporations in that taxable year under clause (2) of paragraph (a) of subsection (3) of section 39 of chapter 63. For purposes of this subsection, net income determined to be taxable in accordance with this chapter shall be determined without taking into account subchapter S of said Code, and shall not include income that is taxed to the S corporation at the entity level under paragraph (i) of subsection (a). The term ''total receipts'' shall mean gross receipts or sales, less returns and allowances, and shall include dividends, interest, royalties, capital gain net income, rental income and all other income. The cost of goods sold or the cost of operations shall not be deductible in determining such total receipts. The commissioner shall, by regulation, apply such limits on an aggregate basis to S corporations engaged in a unitary business with majority direct or indirect ownership by common stockholders. Such aggregating shall also include any other type of entity, including any qualified subchapter S subsidiary, so engaged and so owned which the commissioner finds was established for the purpose of avoiding the foregoing limits. (b) Qualified subchapter S subsidiaries shall not be subject to separate entity level taxation under this section or section 39. Rather, the parent S corporation shall be subject to tax under this section and section 39, and shall include the income and take into account the activities of all qualified subchapter S subsidiaries for purposes of determining the excise due under subsection (a) of this section, and shall include the value of the property or the net worth of all qualified subchapter S subsidiaries for purposes of determining the non-income measure of the excise under clause (1) of subsection (a) of section 39. The parent S corporation and its qualified subchapter S subsidiaries shall be jointly and severally liable for the tax due under this chapter.

M.G.L. c. 63, § 32E Application and refund of credits earned under Sec. 38X; substantiation of claims; regulations

c. 63, § 32E. Application and refund of credits earned under Sec. 38X; substantiation of claims; regulations Section 32E. (a) This section shall apply to credits earned under section 38X. (b) At the written election of a taxpayer entitled to a credit under section 38X, the commissioner shall apply the credit against the liability of the taxpayer as determined on its return, as first reduced by any other available credits, and shall then refund to the taxpayer 90 per cent of the balance of the credits. (c) The commissioner may require substantiation of a taxpayer's claim for a refund under subsection (b) before payment of the refund. No interest shall accrue on a refund under section 40 of chapter 62C before the commissioner's receipt of the substantiation request. (d) The commissioner shall promulgate regulations or other guidelines as he deems necessary to implement this section. The commissioner shall submit any proposed regulations to the joint committee on revenue and the house and senate committees on ways and means before their adoption by the department. The regulations shall be accompanied by a summary which clearly instructs the taxpayer of his rights under this section.

M.G.L. c. 63, § 38 Determination of net income derived from business carried on within commonwealth

c. 63, § 38. Determination of net income derived from business carried on within commonwealth [Text of section effective for taxable years beginning on or after January 1, 2023. See 2023, 50, Secs. 47 and 49.] Section 38. The commissioner shall determine the part of the net income of a business corporation derived from business carried on within the commonwealth as follows: (a) Net income, as defined in section 30, adjusted as follows shall constitute taxable net income: (1) 95 per cent of dividends, exclusive of distributions in liquidation, included therein shall be deducted other than dividends from or on account of the ownership of: (i) shares in a corporate trust, as defined in section 1 of chapter 62, to the extent such dividends represent tax-free earnings and profits, as defined in section 8 of said chapter 62, as in effect on December 31, 2008; (ii) deemed distributions and actual distributions, except actual distributions out of previously taxed income, from a domestic international sales corporation, as defined in 26 U.S.C. § 992, which is not a wholly owned domestic international sales corporation; or (iii) any class of stock, if the corporation owns less than 15 per cent of the voting stock of the corporation paying such dividend. (2) Long-term capital gains realized and long-term capital losses sustained from the sale or exchange of intangible property affected under the provisions of the Federal Internal Revenue Code, as amended, and in effect for taxable years that ended on or before December 31, 1962, shall not be included in any part therein. (b) If the corporation does not have income from business activity which is taxable in another state, the whole of its taxable net income, determined pursuant to subsection (a), shall be allocated to the commonwealth. For purposes of this section, a corporation is taxable in another state if: (1) in that state such corporation is subject to a net income tax, a franchise tax measured by net income, a franchise tax for the privilege of doing business or a corporate stock tax; or (2) that state has jurisdiction to subject such corporation to a net income tax regardless of whether, in fact, the state does or does not. Notwithstanding any other provision of this section, the portion of the taxable net income of a corporation that a non-domiciliary state is prohibited from taxing under the Constitution of the United States shall be allocated in full to the commonwealth if the commercial domicile of the corporation is in the commonwealth. (c) If a corporation has income from business activity which is taxable both within and without the commonwealth, its taxable net income, as determined pursuant to subsection (a), shall be apportioned to the commonwealth by multiplying such taxable net income by the sales factor. (d) The sales factor is a fraction, the numerator of which is the total sales of the corporation in the commonwealth during the taxable year, and the denominator of which is the total sales of the corporation everywhere during the taxable year. As used in this section, unless specifically stated otherwise, ''sales'' shall mean all gross receipts of the corporation, including deemed receipts from transactions treated as sales or exchanges under the Code, except interest, dividends and gross receipts from the maturity, redemption, sale, exchange or other disposition of securities; provided, however, that ''sales'' shall not include gross receipts from transactions or activities to the extent that a non-domiciliary state would be prohibited from taxing the income from such transactions or activities under the Constitution of the United States. (e) Sales of tangible personal property are in the commonwealth for purposes of this section if: (1) the property is delivered or shipped to a purchaser within the commonwealth regardless of the f.o.b. point or other conditions of the sale; or (2) the corporation is not taxable in the state of the purchaser and the property was not sold by an agent or agencies chiefly situated at, connected with or sent out from premises for the transaction of business owned or rented by the corporation outside the commonwealth. ''Purchaser'', as used in clauses (1) and (2) shall include the United States government. (f) Sales, other than sales of tangible personal property, are in the commonwealth for purposes of this section if the corporation's market for the sale is in the commonwealth. The corporation's market for a sale is in the commonwealth and the sale is thus assigned to the commonwealth for the purpose of this section: (1) in the case of sale, rental, lease or license of real property, if and to the extent the property is located in the commonwealth; (2) in the case of rental, lease or license of tangible personal property, if and to the extent the property is located in the commonwealth; (3) in the case of sale of a service, if and to the extent the service is delivered to a location in the commonwealth; (4) in the case of lease or license of intangible property, including a sale or exchange of such property where the receipts from the sale or exchange derive from payments that are contingent on the productivity, use or disposition of the property, if and to the extent the intangible property is used in the commonwealth; and (5) in the case of the sale of intangible property, other than as provided in clause (4), where the property sold is a contract right, government license or similar intangible property that authorizes the holder to conduct a business activity in a specific geographic area, if and to the extent that the intangible property is used in or otherwise associated with the commonwealth; provided, however, that any sale of intangible property, not otherwise described in this clause or clause (4), shall be excluded from the numerator and the denominator of the sales factor. (g) If the sales factor is inapplicable, the corporation's taxable net income shall be apportioned to the commonwealth based on the corporation's property and payroll in the commonwealth. The sales factor shall not be applicable if: (i) both its numerator and denominator are zero; (ii) the denominator is less than 10 per cent of one third of the taxable net income; or (iii) it is otherwise determined by the commissioner to be insignificant in producing income. The sales factor shall not be deemed to be inapplicable solely because the numerator is zero. The commissioner shall adopt regulations providing for such method of apportionment. (h) For the purposes of this section: (1) in the case of sales, other than sales of tangible personal property, if the state or states to which sales should be assigned cannot be determined, it shall be reasonably approximated; (2) in the case of sales other than sales of tangible personal property if the taxpayer is not taxable in a state to which a sale is assigned, or if the state or states to which such sales should be assigned cannot be determined or reasonably approximated, such sale shall be excluded from the numerator and denominator of the sales factor; (3) the corporation shall be considered to be taxable in the state of the purchaser if tangible personal property is delivered or shipped to a purchaser in a foreign country; (4) sales of tangible personal property to the United States government or any agency or instrumentality thereof for purposes of resale to a foreign government or any agency or instrumentality thereof are not sales made in the commonwealth; (5) in the case of sale, exchange or other disposition of a capital asset, as defined in paragraph (m) of section 1 of chapter 62, used in a taxpayer's trade or business, including a deemed sale or exchange of such asset, ''sales'' shall be measured by the gain from the transaction; (6) ''security'' shall mean any interest or instrument commonly treated as a security as well as other instruments which are customarily sold in the open market or on a recognized exchange, including, but not limited to, transferable shares of a beneficial interest in any corporation or other entity, bonds, debentures, notes and other evidences of indebtedness, accounts receivable and notes receivable, cash and cash equivalents including foreign currencies and repurchase and futures contracts; (7) in the case of a sale or deemed sale of a business, ''sales'' shall not include receipts from the sale of the business ''goodwill'' or similar intangible value, including, without limitation, ''going concern value'' and ''workforce in place''; (8) in the case of a business deriving receipts from operating a gaming establishment or otherwise deriving receipts from conducting a wagering business or activity, income-producing activity shall be considered to be performed in the commonwealth to the extent that the location of wagering transactions or activities that generated the receipts is in the commonwealth; (9) in the case of a business deriving receipts from operating a marijuana establishment or otherwise deriving receipts from conducting a marijuana business or activity, income-producing activity shall be considered to be performed in the commonwealth to the extent that the location of marijuana transactions or activities that generated the receipts is in the commonwealth; and (10) dividends that are deemed to be received from an entity, including amounts included in federal gross income pursuant to sections 951 or 951A of the Code, shall not be considered ''sales''. (i)(1) As used in this subsection, the following words shall, unless the context requires otherwise, have the following meanings: ''Administration services'', include, but are not limited to, clerical, fund or shareholder accounting, participant record keeping, transfer agency, bookkeeping, data processing, custodial, internal auditing, legal and tax services performed for a regulated investment company, but only if the provider of such service or services during the taxable year in which such service or services are provided also provides or is affiliated with a person that provides management or distribution services to any regulated investment company. ''Affiliated person'', the meaning as set forth in 15 USC section 80a–2(a)(3)(C), as may be amended from time to time. ''Distribution services'', include, but are not limited to, the services of advertising, servicing, marketing or selling shares of a regulated investment company, but, in the case of advertising, servicing or marketing shares, only where such service is performed by a person who is, or in the case of a close end company, was, either engaged in the services of selling regulated investment company shares or affiliated with a person that is engaged in the service of selling regulated investment company shares. In the case of an open end company, such service of selling shares shall be performed pursuant to a contract entered into pursuant to 15 USC section 80a–15(b), as from time to time amended. ''Domicile'', presumptively the shareholder's mailing address on the records of the regulated investment company. If, however, the regulated investment company or the corporation has actual knowledge that the shareholder's primary residence or principal place of business is different than the shareholder's mailing address said presumption shall not control. If the shareholder of record is a company which holds the shares of the regulated investment company as depositor for the benefit of a separate account, then the shareholder shall be the contract owners or policyholders of the contracts or policies supported by the separate account, and it shall be presumed that the domicile of said shareholder is the contract owner's or policyholder's mailing address to the extent that the company maintains such mailing addresses in the regular course of business. If the regulated investment company or the corporation has actual knowledge that the shareholder's principal place of business is different than the shareholder's mailing address said presumption shall not control. ''Management services'', include, but shall not necessarily be limited to, the rendering of investment advice directly or indirectly to a regulated investment company, making determinations as to when sales and purchases of securities are to be made on behalf of the regulated investment company, or the selling or purchasing of securities constituting assets of a regulated investment company, and related activities, but only where such activity or activities are performed: (i) pursuant to a contract with the regulated investment company entered into pursuant to 15 USC section 80a–15(a), as amended; (ii) for a person that has entered into such contract with the regulated investment company; or (iii) for a person that is affiliated with a person that has entered into such contract with a regulated investment company. ''Mutual fund sales'', taxable net income derived within the taxable year directly or indirectly from the rendering of management, distribution or administration services to a regulated investment company, including net income received directly or indirectly from trustees, sponsors and participants of employee benefit plans, which have accounts in a regulated investment company. ''Regulated investment company'', the meaning as set forth in section 851 of the Code. (2) Mutual fund sales, other than the sale of tangible personal property, shall be assigned to the commonwealth to the extent that shareholders of the regulated investment company are domiciled in the commonwealth as follows: (i) By multiplying the taxpayer's total dollar amount of sales of such services on behalf of each regulated investment company by a fraction, the numerator of which shall be the average of the number of shares owned by the regulated investment company's shareholders domiciled in the commonwealth at the beginning of and at the end of the regulated investment company's taxable year that ends with or within the taxpayer's taxable year and the denominator of which shall be the average of the number of shares owned by the regulated investment company shareholders everywhere at the beginning of and at the end of the regulated investment company's taxable year that ends with or within the taxpayer's taxable year. (ii) A separate computation shall be made to determine the sale for each regulated investment company, the sum of which shall equal the total sales assigned to the commonwealth. (3) Nothing in this subsection shall limit the commissioner's authority under subsection (k). (j) If a corporation maintains an office, warehouse or other place of business in a state other than the commonwealth for the purpose of reducing its tax under this chapter, the commissioner shall, in determining the amount of taxable net income apportionable to the commonwealth, adjust the sales factor to properly reflect the amount which the factor ought reasonably to assign to the commonwealth. (k) If the apportionment provisions of this section are not reasonably adapted to approximate the net income derived from business carried on within the commonwealth by any type of industry group, the commissioner may, by regulation, adopt alternative apportionment provisions to be applied to such an industry group in lieu of the foregoing provisions. (l) In any case in which a purchasing corporation makes an election under section 338 of the Code, the target corporation shall be treated as having sold its assets for purposes of this section. (m) The commissioner shall adopt regulations to implement subsections (d) to (i), inclusive.

M.G.L. c. 63, § 38A Taxable net income

c. 63, § 38A. Taxable net income Section 38A. The taxable net income of a business corporation allocated or apportioned to this commonwealth under the provisions of section thirty-eight shall be its net income subject to tax under this chapter.

M.G.L. c. 63, § 38AA Credit against taxes imposed for qualified donation of certified land to public or private conservation agency

c. 63, § 38AA. Credit against taxes imposed for qualified donation of certified land to public or private conservation agency Section 38AA. (a) As used in this section, the following words shall have the following meanings:- ''Bargain sale'', the sale of an interest in real property by a taxpayer at a cost below appraised market value, when a portion of the value of the interest in real property is a qualified donation, as such terms are defined herein, and which meets the requirements of section 1011(b) of the Internal Revenue Code of 1986, as amended. ''Certified land'', an interest in real property, the donation or bargain sale of which has first been determined by the secretary of energy and environmental affairs to be in the public interest for natural resource protection including, but not limited to, drinking water supplies, wildlife habitat and biological diversity, agricultural and forestry production, recreational opportunities or scenic and cultural values; provided, however, that the secretary of energy and environmental affairs shall assure that all certified lands are protected in perpetuity. ''Interest in real property'', any right in real property in the commonwealth, with or without improvements thereon, or water, including, but not limited to, fee simple, life estate, restriction, easement, covenant, condition, partial interest, remainder, future interest, lease, license, mineral right, riparian right, or other interest or right in real property that may be conveyed concerning the power to transfer property. ''Public or private conservation agency'', the commonwealth, or any subdivision thereof, or any municipality, or private nonprofit corporation organized for the purposes of land conservation, which is authorized to do business in the commonwealth, and which has tax-exempt status as a nonprofit charitable organization as described in section 501(c)(3) of the Internal Revenue Code of 1986, as amended. ''Qualified donation'', a donation, or the donated portion of a bargain sale, made in perpetuity of a fee interest in real property or a less-than-fee interest in real property, including a conservation restriction, agricultural preservation restriction or watershed preservation restriction, pursuant to chapter 184, provided that such less-than-fee interest meets the requirements of qualified conservation contributions under section 170(h) of the Internal Revenue Code of 1986. ''Taxpayer'', a taxpayer subject to an excise under this chapter. (b) A taxpayer making a qualified donation of certified land to a public or private conservation agency shall be allowed a refundable credit against the taxes imposed by this chapter. The credit shall be equal to 50 per cent of the fair market value of the qualified donation. The amount of the credit that may be claimed by a taxpayer for each qualified donation shall not exceed $75,000. (c) The fair market value of a qualified donation of certified land shall be substantiated by a qualified appraisal, as defined in United States Treasury Regulation section 1.170A– 13(c)(3), and shall be prepared by a qualified appraiser, as defined in United States Treasury Regulation section 1.170A–13(c)(5). For a taxpayer to qualify for the credit provided for in this section, the taxpayer shall, as part of the certification process, file with the secretary of energy and environmental affairs a summary of a qualified appraisal or, if requested by the secretary, the taxpayer shall submit the appraisal itself. The secretary shall transmit the summary of or the qualified appraisal itself and certification to the commissioner of revenue, upon request. For purposes of determining the credit under this section, the fair market value of a qualified donation shall be subject to review by the commissioner under chapter 62C. (d) If the amount of the credit allowed under this section exceeds the taxpayer's tax liability, the commissioner of revenue shall treat the excess as an overpayment and shall pay the taxpayer the entire amount of the excess. (e) Any tax credits issued in accordance with this section may be in addition to any charitable deductions claimed on the taxpayer's federal income tax return for the same qualified donations of certified lands. (f) Any taxpayer claiming a state income tax or excise tax credit under this section may not claim an additional state income tax credit or deduction during any one tax year for costs related to the same interest in certified lands. (g) Any tax credits which arise under this section from the qualified donation of certified land by a pass-through tax entity such as a trust, estate, partnership, corporation, limited partnership, limited liability partnership, limited liability corporation, subchapter S organization, or other fiduciary, shall be used either by such entity in the event it is the taxpayer on behalf of such entity or by the member, partner, shareholder, or beneficiary, as the case may be, in proportion to its interest in such entity in the event that income, deductions, and tax liability passes through such entity to such member, partner, shareholder, or beneficiary. Such tax credits may not be claimed by both the entity and the member, partner, shareholder, or beneficiary, for the same conveyance. (h) The secretaries of energy and environmental affairs and administration and finance, acting jointly and in writing, shall authorize tax credits under this section together with subsection (p) of section 6 of chapter 62. The total cumulative value of the tax credits authorized pursuant to this section and said subsection (p) shall not exceed $2,000,000 annually. No credits shall be allowed under this section except to the extent authorized in this subsection. The commissioner of revenue, after consulting with the secretaries concerning, among other things, the land conservation objectives of this section, shall adopt regulations governing applications for and other administration of the tax credits.

M.G.L. c. 63, § 38B Financial institutions and business corporations engaged exclusively in buying, selling, dealing in or holding securities; excise rate

c. 63, § 38B. Financial institutions and business corporations engaged exclusively in buying, selling, dealing in or holding securities; excise rate Section 38B. (a) Every financial institution or business corporation which is engaged exclusively in buying, selling, dealing in, or holding securities on its own behalf and not as a broker, except securities of a DISC, and is not a bank holding company under the Internal Revenue Code, as amended and in effect for the taxable year, and, which either applies to the commissioner to be classified as a security corporation before the end of the taxable year and is so classified, or has been so classified by the commissioner for a prior taxable year and such classification has not been revoked before the end of the taxable year, shall pay, on account of each taxable year, an excise equal to one and thirty-two one hundredths percent of the gross income, as defined in section thirty, received by such corporation during the taxable year or four hundred and fifty-six dollars, whichever is greater. (b) Every financial institution business corporation which is engaged exclusively in buying, selling, dealing in, or holding securities on its own behalf and not as a broker, except securities of a DISC, and is a bank holding company under the Internal Revenue Code, as amended and in effect for the taxable year, and which either applies to the commissioner to be classified as a security corporation before the end of the taxable year and is so classified, or has been so classified by the commissioner for a prior taxable year and such classification has not been revoked before the end of the taxable year, shall pay, on account of such taxable year, an excise equal to thirty-three one hundredths percent of the gross income, as defined in section thirty, received by such corporation during the taxable year or four hundred and fifty-six dollars, whichever is greater. (b1/2) For the purposes of subsection (a), ''securities'' includes (1) equity or debt instruments and options, futures and other derivatives, that are traded on and were acquired through a public exchange or another arms length secondary market; (2) bond as defined in and issued pursuant to chapter 23G; (3) cash and cash equivalents, including savings and checking accounts and certificates of deposit, and foreign currencies; (4) interests in a real estate investment trust under section 856 of the Code or a regulated investment company under section 851 of the Code, or a real estate mortgage investment conduit under section 860D of the Code, so long as none of the mortgages owned by the conduit were originated by the holder thereof or by an affiliate of the holder; (5) mortgage-backed securities that are guaranteed by the Federal National Mortgage Association, the Government National Mortgage Association, the Federal Home Loan Bank or the Federal Home Loan Mortgage Corporation; (6) collateralized mortgage obligations, so long as none of the mortgages that underlie the obligation were originated by the holder thereof or by an affiliate of the holder; and (7) any other passive investment vehicles that, in the judgment of the commissioner, should be considered to constitute ''securities'' for the purposes of said subsection (a); ''affiliate'' means a member of an affiliated group as defined under section 1504 of the Code; and ''debt instruments'' shall be deemed to include, but not be limited to, debt obligations of the United States, its agencies or instrumentalities and of any state or political subdivision thereof, their agencies or instrumentalities. Nothing in this subsection shall be construed to limit the instruments that may be held by an investment partnership for purposes of the safe harbor set forth in subsection (b) of section 17 of chapter 62. (c) Any corporation taxable under this section shall not be subject to the excise imposed by section 2, 2B, 32D or 39. (d) Ownership interest in a real estate investment trust which is a related member, as defined in section 31I, shall not be considered a security for the purposes of this section. A real estate investment trust shall have the same meaning as that contained in section 856 of the Code.

M.G.L. c. 63, § 38BB Credit against taxes imposed for a certified housing development project

c. 63, § 38BB. Credit against taxes imposed for a certified housing development project Section 38BB. (1) A credit shall be allowed against the tax liability imposed by this chapter, to the extent awarded by the executive office of housing and livable communities, in this section referred to as ''EOHLC'', established in chapter 23B, for a certified housing development project, as defined in chapter 40V, in an amount up to 25 per cent of the cost of qualified project expenditures of the market rate units within the project, as defined in section (1) of chapter 40V. The credit under this section shall be allowed for the taxable year in which EOHLC gives the commissioner of revenue written notification of completion of the certified housing development project. (2) Taxpayers eligible for the this credit may, with prior notice to and under regulations adopted by the commissioner of revenue transfer the credits, in whole or in part, to any individual or entity, and the transferee shall be entitled to apply the credits against the tax with the same effect as if the transferee had incurred the qualified project expenditures itself. (3) If the credit allowable for any taxable year exceeds the taxpayer's tax liability for that tax year, the taxpayer may carry forward and apply in any subsequent taxable year, the portion, as reduced from year to year, of those credits which exceed the tax for the taxable year; provided, however, that in no event shall the taxpayer apply the credit to the tax for any taxable year beginning more than 10 years after the taxable year in which EOHLC gives the commissioner written notification of completion of the certified housing development project. If the credit is transferred by the taxpayer, the carry over provisions applicable to the transferee shall apply. A transferee shall use the credit in the year it is transferred. If the credit allowable for any taxable year exceeds the transferee's tax liability for that tax year, the transferee may carry forward and apply in any subsequent taxable year, the portion, as reduced from year to year, of those credits which exceed the tax for the taxable year; provided, however, that in no event shall the transferee apply the credit to the tax for any taxable year beginning more than 10 years after the taxable year in which EOHLC gives the commissioner of revenue written notification of completion of the certified housing development project. (4) For any certified housing development project, qualified project expenditures applicable to this credit shall be treated for purposes of this section as made on the date that EOHLC gives the commissioner of revenue written notification of completion of the certified housing development project. (5) EOHLC may authorize up to $30,000,000 in credits annually under this section and subsection (q) of section 6 of chapter 62. EOHLC may authorize annually any credits under this section or said subsection (q) of said section 6 of said chapter 62 returned to EOHLC by a certified housing development project. The total amount of credits authorized during a year shall include: (1) credits granted during the year under this section or said subsection (q) of section 6 of chapter 62; and (2) carry forwards of credits from prior years under this section or said subsection (q) of section 6 of chapter 62, to the extent that such credit carry forwards are estimated by the commissioner of revenue to offset tax liabilities during the year. Any portion of the $30,000,000 annual cap not authorized by EOHLC during a calendar year shall be added to the amount EOHLC may authorize in subsequent years. EOHLC shall provide the commissioner of revenue with any documentation that the commissioner deems necessary to confirm compliance with the annual cap and the commissioner shall provide a report confirming compliance with the annual cap to the secretary of administration and finance and the secretary of housing and livable communities. (6) The commissioner of revenue, in consultation with EOHLC, shall adopt regulations necessary to carry out this section.

M.G.L. c. 63, § 38CC Life Sciences refundable jobs credit

c. 63, § 38CC. Life Sciences refundable jobs credit Section 38CC. (a) A taxpayer, to the extent authorized by the life sciences tax incentive program established in section 5 of chapter 23I, may be allowed a refundable jobs credit against the tax liability imposed under this chapter in an amount determined by the Massachusetts Life Sciences Center in consultation with the department. (b) A taxpayer taking a credit under this section shall commit to the creation of a minimum of 50 net new permanent full-time positions in the commonwealth. (c) A credit allowed under this section shall reduce the liability of the taxpayer under this chapter for the taxable year. If a credit claimed under this section by a taxpayer exceeds the taxpayer's liability as otherwise determined under this chapter for the taxable year, 90 per cent of such excess credit, to the extent authorized pursuant to the life sciences tax incentive program, shall be refundable to the taxpayer. Excess credit amounts shall not be carried forward to other taxable years. (d) The department shall issue the refundable portion of the jobs credit without further appropriation and in accordance with the cumulative amount, including the current year costs of incentives allowed in previous years, which shall not exceed $30,000,000 annually as set forth in subsection (d) of said section 5 of said chapter 23I.

M.G.L. c. 63, § 38D Deduction of expenditures for industrial waste treatment or air pollution control facilities

c. 63, § 38D. Deduction of expenditures for industrial waste treatment or air pollution control facilities Section 38D. (a) In determining the net income subject to tax under this chapter a business corporation, at its election, may deduct the expenditures paid or incurred during the taxable year for the construction, reconstruction, erection or improvement of industrial waste treatment facilities or industrial air pollution control facilities. The term ''industrial waste treatment facilities'' and the term ''industrial air pollution control facilities'' shall mean facilities for the treatment, neutralization or stabilization of industrial waste or industrial air pollution from a point immediately preceding the point of such treatment, neutralization or stabilization to the point of disposal, including the necessary pumping and transmitting facilities, but excluding such facilities installed for the primary purpose of salvaging materials which are usable in the manufacturing process or are marketable. The term ''industrial waste'' and the term ''industrial air pollution'' shall mean any liquid, gaseous, solid or waste substance, or a combination thereof, resulting from any process of industry, manufacture, trade or business or from the development or recovery of any natural resources, which may cause or might reasonably be expected to cause pollution of the waters or the atmosphere of the commonwealth. (b) Such deduction shall be allowed only— (1) with respect to tangible property which is depreciable pursuant to section one hundred and sixty-seven of the Federal Internal Revenue Code, having a situs in the commonwealth and used in the corporation's trade or business, the construction, reconstruction, erection or improvement of which with respect to industrial waste treatment facilities was initiated on or after January first, nineteen hundred and sixty-six, and only for expenditures paid or incurred prior to January first, nineteen hundred and eighty, and with respect to industrial air pollution control facilities was initiated on or after January first, nineteen hundred and seventy-two, and only for expenditures paid or incurred prior to January first, nineteen hundred and eighty, and (2) on condition that such facilities with respect to industrial waste treatment facilities have been certified by the director of the division of water pollution control in the department of environmental protection as complying with applicable provisions of the water pollution control law and regulations, permits or orders issued by him pursuant to law, and with respect to industrial air pollution control facilities have been certified by the director of the air pollution control agency in the commonwealth as complying with applicable provisions of the air pollution control law and regulations, permits or orders issued by him pursuant to law, and (3) on condition that the net income for the taxable year and all succeeding taxable years be computed without any deduction for such expenditures or for depreciation of the property other than the deductions allowed by this section, except to the extent that the cost or other basis of the property may be attributable to factors other than such expenditures, or in the case a deduction is allowable pursuant to this section for only a part of such expenditures, on condition that any deduction allowed under the Federal Internal Revenue Code for such expenditures or for depreciation of the same property be proportionately reduced in computing net income for the taxable year and all succeeding taxable years. (c) If expenditures with respect to an industrial waste treatment facility or an industrial air pollution treatment facility have been deducted as provided herein and if within ten years from the end of the taxable year in which such deduction was allowed such property or any part thereof is used for the primary purpose of salvaging materials which are usable in the manufacturing process or are marketable, the corporation shall report such change of use in its return for the first taxable year during which it occurs, and the commissioner may recompute the tax for the year or years for which such deduction was allowed and may assess any additional tax resulting from such recomputation within the period of assessment applicable to such return. If a deduction is allowed as herein provided for expenditures paid or incurred during any taxable year on the basis of a temporary certificate of compliance and if the corporation fails to obtain a permanent certificate of compliance upon completion of the facilities with respect to which such temporary certificate was issued, the corporation shall report such failure in its return for the taxable year during which such facilities are completed, and the commissioner may recompute the tax for the year or years for which such deduction was allowed and may assess any additional tax resulting from such recomputation within the period of assessment applicable to such return. (d) In any taxable year when property is sold or otherwise disposed of, with respect to which a deduction has been allowed pursuant to this section, such deduction shall be disregarded in computing gain or loss, and the gain or loss on the sale or other disposition of such property shall be the gain or loss resulting if the deduction provided by this section had not been elected and the cost or other basis of the property had been reduced by straight-line depreciation based on the useful life of the property; provided, however, that if such sale or other disposition of such property occurs within three years of the date such property is placed in service the basis shall be zero. (e) And industrial waste treatment facility or an industrial air pollution treatment facility which qualifies for the deduction provided for by this section shall not be subject to taxation under the tangible property measure of the excise imposed by subclause (i) of clause (1) of subparagraph (a) of the fourth paragraph of section 39.

M.G.L. c. 63, § 38DD Credit against excise tax imposed under Secs. 2(b), 2B(b) or 39(b)

c. 63, § 38DD. Credit against excise tax imposed under Secs. 2(b), 2B(b) or 39(b) Section 38DD. (a) A corporation formed under chapter 156D and taxable under this chapter shall receive a nontransferrable credit against an excise tax imposed under subsection (b) of section 2, subsection (b) of section 2B or subsection (b) of section 39. (b) A corporation shall only be eligible for a credit under subsection (a) for the first 3 years in which it is required to file a return under this chapter; provided, however, that such credit shall not be allowed to any corporation with 50 per cent or more of its voting stock owned by another corporation, whether or not such owning corporation is taxable in the commonwealth.

M.G.L. c. 63, § 38E Eligible business facility; excise credit

c. 63, § 38E. Eligible business facility; excise credit Section 38E. (a) A business corporation operating an eligible business facility, as defined in section eleven of chapter twenty-three B, may take a credit against the excise imposed upon it under this chapter in an amount as hereinafter provided. (b) If the real estate comprising such eligible business facility is owned or leased by the corporation, the amount of the credit shall be an amount equal to the equalized tax rate differential during the taxable year multiplied by the assessed valuation of such real estate during the taxable year and divided by one thousand dollars. (c) If the eligible business facility is located only upon a portion of the real estate owned or leased by the corporation, the amount of the credit shall be an amount equal to the equalized tax rate differential multiplied by the assessed valuation during the taxable year of such portion of the real estate and divided by one thousand dollars. The assessed valuation of such portion of the real estate upon which said facility is located shall be determined by a reasonable apportionment of the assessed valuation of the entire real estate. (d) As used in this section the phrase ''equalized tax rate differential'' shall mean the amount by which the equalized tax rate of a city or town exceeds the average equalized tax rate of the commonwealth in any calendar year. The equalized tax rate of a city or town for any calendar year shall be the rate of taxation per one thousand dollars of valuation that would be levied upon its property subject to local taxation for said year if such property were assessed at its equalized valuation as last determined by the commissioner of revenue under section ten C of chapter fifty-eight. The average equalized tax rate of the commonwealth for any calendar year shall be the average rate of taxation per one thousand dollars of valuation that would be levied in the commonwealth upon all property subject to local taxation for said year if such property were assessed at its equalized valuation as last determined by the commissioner of revenue under said section ten C of said chapter fifty-eight.

M.G.L. c. 63, § 38EE Community investment tax credit

c. 63, § 38EE. Community investment tax credit [Text of section effective until December 31, 2025. Repealed by 2012, 238, Sec. 36. See 2012, 238, Sec. 98 as amended by 2018, 99, Sec. 25. Expiration of section does not take effect. See 2024, 150, Sec. 106.] Section 38EE. (a) The purpose of this section shall be to enable local residents and stakeholders to work with and through community development corporations to partner with nonprofit, public and private entities to improve economic opportunities for low and moderate income households and other residents in urban, rural and suburban communities across the commonwealth. (b) For the purposes of this section, the following words shall, unless the context clearly requires otherwise, have the following meanings:— ''Commissioner'', the commissioner of revenue or the commissioner's duly authorized representative. ''Community development corporation'', a corporation certified as a community development corporation by the department consistent with chapter 40H. ''Community investment plan'', an organizational business plan developed by a certified community development corporation that details its goals, outcomes, strategies, programs and activities for a 3 to 5–year period and its financial plans for supporting its strategy; provided, however, that the plan shall be designed to engage local residents and businesses to work together to undertake community development programs, projects and activities which develop and improve urban, rural or suburban communities in sustainable ways that create and expand economic opportunities for low and moderate income households; and provided further, that the specific format and content of a community investment plan may be adapted to the particular organization and community, but shall include the following elements: (i) a description of the community to be served by the organization, including the neighborhoods, towns, or cities to be served as well as any particular constituencies that the organization is dedicated to serving; (ii) a description of how community residents and stakeholders were engaged in the development of the plan and their role in monitoring and implementing the organization's activities during the time period of the plan; (iii) the goals sought to be achieved during the time period of the plan, including how low and moderate income households or low and moderate income communities will benefit and how the entire community will benefit; (iv) the activities to be pursued to achieve those goals; (v) the manner in which success shall be measured and evaluated; (vi) a description of the collaborative efforts that shall support implementation of the plan, including collaborative efforts with nonprofit, for-profit or public entities; (vii) a description of how the different activities within the plan fit together and how the entire plan fits into a larger strategy or vision for the community; (viii) the financial strategy to be deployed to support these activities; and (ix) other information regarding the history and track record of the organization as determined by the department. ''Community investment tax credit'', the tax credit described in subsection (d). ''Community investment tax credit allocation'', an award provided by the department through a competitive process that enables the recipient of the allocation to solicit and receive qualified investments from taxpayers and to provide those taxpayers with a community investment tax credit. ''Community partner'', a community development corporation or a community support organization selected by the department through a competitive process to receive a community investment tax credit allocation. ''Community partnership fund'', a fund administered by a nonprofit organization selected by the department to receive qualified investments from taxpayers for the purpose of allocating such investments to community partners. ''Community support organization'', any nonprofit organization which is not a community development corporation but has a focus on and track record of providing capacity building services to community development corporations. ''Department'', the executive office of housing and livable communities. ''Gateway municipality'', a gateway municipality as defined in section 3A of chapter 23A. ''Low and moderate income community'', an economic target area designated under section 3G of chapter 23A, an enhanced economic enterprise community or empowerment zone as designated by the United States Department of Housing and Urban Development, or 1 or more contiguous census tracts as designated by a city or town, in which either: (i) a majority of the households are low and moderate income households as defined herein; or (ii) the unemployment rate is at least 25 per cent higher than the annual statewide average unemployment rate at a time when the statewide unemployment rate is less than or equal to 5 per cent or the unemployment rate is at least 10 per cent higher than the annual statewide average unemployment rate at a time when the statewide unemployment rate is greater than 5 per cent. ''Low and moderate income households'', households which have incomes that do not exceed 80 per cent of the median income for the area, with adjustments made for smaller and larger families, as such median shall be determined from time to time by the secretary of the United States Department of Housing and Urban Development pursuant to 42 U.S.C. 1437(a)(B)(2) or any successor legislation and the regulations promulgated thereunder. ''Qualified investment'', a cash contribution made to a specific community partner to support the implementation of its community investment plan or to a community partnership fund, as defined by this section. ''Taxpayer'', a taxpayer subject to an excise under this chapter. (c) The department shall promulgate regulations concerning the process by which community development corporations apply to become a community partner and receive qualified investments; provided, however, that: (1) the department shall design a competitive process to review applications by community development corporations and community support organizations; provided, however, that community support organizations may qualify but not more than 2 such organizations shall, at any given time, be awarded community investment tax credits; (2) the selection process shall favor community development corporations with the highest quality community investment plans and strong track records and shall strive to ensure that all regions of the commonwealth are able to fairly compete for allocations, including gateway municipalities, rural areas and suburban areas; provided, however, that at least 30 per cent of the community partners shall be located in or serving gateway municipalities and at least 20 per cent of the community partners shall be located in or serving rural areas, as defined by the department, unless the department finds that there are not a sufficient number of qualified applications from those areas; (3) the department shall implement at least 1such allocation process each year; provided, however, that each tax credit allocation shall be valid for a period of up to 3 years, contingent upon the community partner satisfactorily meeting the reporting requirements of the department; provided further, that community partners who have not fully utilized their community investment tax credit allocations within 3 years may apply to the department for a 1 year extension; and provided further, that community investment tax credit allocations may be revoked after 2 years from the date of the award by the department if: (i) the community partner has been unable to secure donation commitments for at least 50 per cent of total allocation by that time, (ii) if the community partner is found to be in noncompliance with this statute or the department's regulations promulgated hereunder, (iii) if the community partner is determined by the department to be making inadequate progress on its community investment plan, or (iv) for other good cause as determined by the department; [Clause (4) of subsection (c) effective for tax years beginning on or after January 1, 2019. See 2018, 99, Sec. 35 as amended by 2018, 162, Sec. 1.] (4) no community partner shall receive a community investment tax credit allocation of less than $50,000 or more than 2 1/2 per cent of the total credits available in any 1 taxable year; provided, however, that the department may waive this cap if it determines that it would be unable to otherwise fully allocate the credits available during that calendar year to eligible community partners; provided, however, that no community partner shall receive a subsequent allocation unless the department has determined that it has made satisfactory progress toward utilizing any prior allocation; (5) a community partner may receive qualified investments directly from taxpayers or it may transfer some or all of its community investment tax credit allocation to a community partnership fund and receive qualified investments from that fund; (6) before receiving a qualified investment from a taxpayer or from a community partnership fund, the community partner shall first receive certification from the department that it has been awarded a community investment tax credit allocation; (7) the department may authorize up to 2 nonprofit organizations to operate community investment partnership funds; provided, however, that in selecting at least 1 such nonprofit organization to serve in this function, the department shall seek an organization which demonstrates that it has the capacity to solicit, administer and re-grant qualified investments and can advance the purposes of this section; and (8) the department, in consultation with the commissioner shall prescribe regulations necessary to carry out this subsection; provided, that such regulations shall include requirements for annual reports from community partners and community partnership funds regarding outcomes achieved during the prior year and those reports shall be made available to the public; provided further, that the department shall maintain a list of all community partners and community partnership funds on its website; and provided further, that the department shall produce an annual report not later than April 30 for the general court and the public that describes the outcomes achieved through the program. (d) There is hereby established a Massachusetts community investment tax credit. [Subsection (e) effective for tax years beginning on or after January 1, 2019. See 2018, 99, Sec. 35 as amended by 2018, 162, Sec. 1.] (e) No tax credit shall be allowed to a taxpayer that makes a qualified investment of less than $1,000. (f) A taxpayer that makes a qualified investment shall be allowed a refundable credit, to be computed as provided in this subsection, against the taxes imposed by this chapter. If the amount of the credit allowed under this subsection exceeds the taxpayer's tax liability, the commissioner shall treat the excess as an overpayment and shall pay the taxpayer the amount of the excess, without interest. Alternatively, at the option of the taxpayer, a taxpayer entitled to a credit under this subsection for a taxable year may carry over and apply against the taxpayer's tax liability for any 1 or more of the succeeding 5 taxable years, the portion, as reduced from year to year, of the credit which exceeds the tax for the taxable year. If the taxpayer elects to carry over a credit balance, then the credit refund provision allowed by this subsection shall not apply. The credit shall be equal to 50 per cent of the total qualified investments made by the taxpayer, subject to the limits described in subsection (e). The department shall issue a certification to the taxpayer after the taxpayer makes a qualified investment. The certification shall be acceptable as proof that the expenditures related to that investment qualify as a qualified investment for purposes of the credit allowed under this section. (g) The credit allowable under this section shall be allowed for the taxable year in which a qualified investment is made. (h) Community investment tax credits allowed to a pass-through entity such as a partnership or a limited liability company taxed as a partnership shall be passed through to the persons designated as partners, members or owners, respectively, pro rata or under an executed agreement among the persons designated as partners, members or owners documenting an alternative distribution method without regard to their sharing of other tax or economic attributes of the entity. [ Subsection (i) effective for tax years beginning on or after January 1, 2025. See 2024, 150, Sec. 141.] (i) The department shall authorize the tax credits under this section. The total value of the tax credits authorized in this section, together with those authorized in section 6M of chapter 62, shall not exceed: (i) $3,000,000 in taxable year 2014; (ii) $6,000,000 in each of taxable years 2015 to 2018, inclusive; (iii) $8,000,000 in each of taxable years 2019 and 2020; (iv) $10,000,000 in each of taxable years 2021 and 2022; and (v) $15,000,000 in taxable years beginning on or after January 1, 2025. (j) The commissioner, in consultation with the department, shall prescribe regulations necessary to carry out the tax credit established in subsection (d).

M.G.L. c. 63, § 38F Deduction from net income for compensation paid to individuals employed by eligible business facility domiciled in present or former eligible section of substantial poverty

c. 63, § 38F. Deduction from net income for compensation paid to individuals employed by eligible business facility domiciled in present or former eligible section of substantial poverty Section 38F. In determining the net income subject to tax under this chapter, a business corporation may deduct, in addition to any other allowable deduction under this chapter, an amount equal to twenty-five per cent of the compensation paid during the taxable year to individuals employed in an eligible business facility, as defined in section 60A of chapter 23A, and either: (i) domiciled in an eligible section of substantial poverty as defined in section 60A of chapter 23A; or (ii) domiciled in an area which had been certified as such an eligible section of substantial poverty when the corporation first received a certificate of eligibility; provided, however, such individuals still live in the same city or town; and provided further such corporation has a certificate of eligibility with respect to such facility for the taxable year issued by the urban jobs incentive bureau of the Massachusetts office of business development. No deduction under this section shall exceed five thousand dollars for any qualifying individual.

M.G.L. c. 63, § 38G Reporting wholly-owned DISC income

c. 63, § 38G. Reporting wholly-owned DISC income Section 38G. A business corporation subject to tax under this chapter shall for the purposes of determining its excise under the provisions of this chapter include in the report of its income all the income of any wholly-owned DISC, whether such DISC is organized under the laws of the commonwealth or the laws of any other state, for the taxable year of such wholly-owned DISC which ends immediately after the taxable year of such corporation and shall include in its assets and liabilities all of the assets and liabilities of any such wholly-owned DISC as of the end of the taxable year of such wholly-owned DISC which ends immediately after the taxable year of such corporation. Every business corporation subject to tax under this chapter which has such a wholly-owned DISC shall include in its return: (1) a copy of the federal income tax return filed by such DISC for the taxable year which ends immediately after the taxable year of such corporation and (2) a statement that the income, assets and liabilities reported by such corporation for the taxable year and upon which its excise under this chapter has been determined includes the income, assets and liabilities of such DISC for the taxable year of the DISC which ends immediately after the taxable year of such corporation.

M.G.L. c. 63, § 38GG Hiring of qualified veterans; excise tax credit

c. 63, § 38GG. Hiring of qualified veterans; excise tax credit [Subsection (a) effective for taxable years beginning on January 1, 2024. See 2024, 178, Sec. 153.] Section 38GG. (a) A business corporation with not more than 100 employees, that is certified by the secretary of veterans' services pursuant to section 2C of chapter 115 and qualifies for and claims the Work Opportunity Credit allowed under section 51 of the Internal Revenue Code, as amended and in effect for the taxable year, for the hiring of qualified veterans in the commonwealth shall be allowed a credit against its excise due under this chapter in an amount equal to $2,500 for each qualified veteran hired by the business corporation. For the purposes of this section, ''qualified veteran'' shall have the same meaning as under section 51(d)(3) of the Code. (b) To be eligible for a credit under this section: (i) the primary place of employment and the primary residence of the qualified veteran shall be in the commonwealth; and (ii) not later than six months after an individual begins work, a business corporation shall have obtained the applicable certification from the department of career services or any successor agency that the individual is a qualified veteran. (c) In the case of a business corporation that is subject to a minimum excise under this chapter, the amount of the credit allowed by this section shall not reduce the excise to an amount less than such minimum excise. [Subsection (d) effective for taxable years beginning on January 1, 2024. See 2024, 178, Sec. 153.] (d) A business corporation that is eligible for and claims the credit allowed under this section in a taxable year with respect to a qualified veteran shall be eligible for a second credit of $2,500 in the subsequent taxable year with respect to such qualified veteran, subject to certification of continued employment during the subsequent taxable year in the manner required by the secretary. A credit allowed under this section shall not be transferable or refundable. Any amount of the credit allowed under this section that exceeds the tax due for a taxable year may be carried forward to any of the 3 subsequent taxable years. (e) The total cumulative value of the credits authorized pursuant to this section and subsection (u) of section 6 of chapter 62 shall not exceed $1,000,000 annually.

M.G.L. c. 63, § 38H Alternative energy sources; deduction

c. 63, § 38H. Alternative energy sources; deduction Section 38H. (a) In determining the net income subject to tax under this chapter a business corporation, at its election, may deduct the expenditures paid or incurred during the taxable year with respect to the installation of any solar or wind powered climatic control unit and any solar or wind powered water heating unit or any other type unit or system powered thereby including the cost of labor attendant to the installation thereof and the conversion of any climatic control unit or any water heating unit, or other unit, to solar or wind power including the cost of labor attendant to the conversion thereof; provided, however, that such unit or system has a situs in the commonwealth and is used exclusively in the trade or business of such corporation. (b) Such deduction shall be allowed only— (1) on condition that the net income for the taxable year and all succeeding taxable years be computed without any exemption, credit or deduction for such expenditures or for depreciation of the property other than the deductions allowed by this section, and (2) with respect to a solar or wind powered climate control unit and any solar or wind powered water heating unit or any other type unit or system powered thereby for which the manufacturer's british thermal unit impact statement has been submitted to the director of the bureau of building construction and which have been certified by said director as complying with applicable provisions of regulations and standards issued by him pursuant to law. (c) No deduction shall be allowed under the provisions of this section for the cost of purchase, installation, operation or maintenance of any other climate control unit, any water heating unit or other unit used ancillary to any solar or wind powered unit. (d) If expenditures with respect to any solar or wind powered climate control unit and any solar or wind powered water heating unit or any other type unit or system powered thereby have been deducted as provided herein and if within ten years from the end of the taxable year in which such deduction was allowed such unit or system or any part thereof is used other than exclusively in the corporation's trade or business, the corporation shall report such change of use in its return for the first taxable year during which it occurs, and the commissioner may recompute the tax for the year or years for which such deduction was allowed and may assess any additional tax resulting from such recomputation within the period of assessment applicable to such return. (e) In any taxable year when property is sold or otherwise disposed of, with respect to which a deduction has been allowed pursuant to this section, such deduction shall be disregarded in computing gain or loss, and the gain or loss on the sale or other disposition of such property shall be the gain or loss resulting if the deduction provided by this section had not been elected and the cost or other basis of the solar or wind powered climate control unit and any solar or wind powered water heating unit or any other type unit or system powered thereby had been reduced by straight-line depreciation based on the useful life of such unit or system; provided, however, that if such sale or other disposition of such unit or system occurs within three years of the date such unit or system is placed in service the basis shall be zero. (f) A solar or wind powered climate control unit and any solar or wind powered water heating unit or any other type unit or system powered thereby which qualifies for the deduction provided for by this section shall not be subject to taxation under the tangible property measure of the excise imposed by subclause (i) of clause (1) of subparagraph (a) of the fourth paragraph of section 39.

M.G.L. c. 63, § 38HH Credit for wages paid to qualified apprentice

c. 63, § 38HH. Credit for wages paid to qualified apprentice [Text of section effective for tax years beginning after January 1, 2019. See 2018, 228, Sec. 72.] [Subsection (a) effective for taxable years beginning on or after January 1, 2023. See 2023, 50 Sec. 49.] Section 38HH. (a) A business corporation engaged in business in the commonwealth shall be allowed a credit against its excise due under this chapter in an amount equal to $4,800 or 50 per cent of the wages paid to each qualified apprentice in a taxable year, whichever is less. If a credit allowed by this section exceeds the tax otherwise due under this chapter, 100 per cent of the balance of such credit may, at the option of the taxpayer, be refundable to the taxpayer. In order to qualify, the apprentice must meet the definition of apprentice in section 11H of chapter 23 and must be hired and trained in 1 of the following occupations, as defined by the Bureau of Labor Statistics: computer occupations, as defined by Standard Occupational Codes 15–1200; health technologists and technicians, as defined by Standard Occupational Codes 29–2000; health practitioner support technologists and technicians, as defined by Standard Occupational Codes 29–2050; healthcare support occupations, as defined by Standard Occupational Codes 31–0000; or production occupations if employed in the manufacturing industry, as defined by Standard Occupational Codes 51–0000, NAICS code 31–33 or other expansion industries the secretary of labor and workforce development identifies as critical to a regional labor market economy. (b) To be eligible for a credit under this section: (i) the primary place of employment of the apprentice must be in the commonwealth; (ii) the business corporation must be registered with the division of apprentice standards as an apprenticeship program sponsor and have an apprentice agreement, as defined in section 11H of chapter 23, with each apprentice for whom the credit is claimed; and (iii) the apprentice must have been employed by the business corporation as an apprentice for at least 180 calendar days in the taxable year in which the credit is claimed. (c) A business corporation that is eligible for and claims the credit allowed under this section in a taxable year with respect to a qualified apprentice shall be eligible for a credit in the subsequent taxable year with respect to such qualified apprentice, subject to certification by the division of apprentice standards of continued employment as an apprentice during the subsequent taxable year in the manner required by the commissioner. Any credit allowed under this section shall not be transferable. (d) The secretary of labor and workforce development, in consultation with the commissioner, shall promulgate regulations establishing an application process for the credit; provided, however, that the regulations shall include a maximum number of qualified apprentices for which a taxpayer may claim the credit in a year. (e) The secretaries of labor and workforce development and administration and finance, acting jointly and in writing shall authorize tax credits pursuant to this section and subsection (v) of section 6 of chapter 62. The total amount of credits that may be authorized in a calendar year pursuant to this section and said subsection (v) of said section 6 of said chapter 62 shall not exceed $2,500,000. No credits shall be allowed under this section except to the extent authorized in this subsection. The commissioner, after consulting with the secretaries, on the criteria set forth in subsections (a) and (b) of this section, shall adopt regulations governing applications for and other administration of the tax credits. The secretaries and the division of apprentice standards shall provide the commissioner with the documentation that the commissioner deems necessary to confirm compliance with the annual cap. (f) The commissioner, in consultation with the secretaries, shall annually, not later than March 1, file a report with the house and senate committees on ways and means, the joint committee on economic development and emerging technologies, and the joint committee on labor and workforce development, identifying the following: (i) total amount of tax credits claimed pursuant to this subsection; (ii) the number of participating apprentices and relevant wage information; (iii) the number of applications received and the number of participating employers; (iv) the areas of occupation by qualifying tax credit beneficiaries; (v) program outcomes for apprentices, including job retention and further employment opportunities; and (vi) whether the tax credit program is achieving its public policy purpose to create talent pipelines for businesses and provide career pathways toward high demand occupations for unemployed and underemployed residents of the commonwealth.

M.G.L. c. 63, § 38I Wages deemed compensation paid in commonwealth; deduction; election

c. 63, § 38I. Wages deemed compensation paid in commonwealth; deduction; election Section 38I. In determining the net income subject to tax under this chapter for the taxable year, a business corporation may deduct in addition to any other allowable deduction under this chapter, a deduction equal to the credit allowed under section fifty-one of the Federal Internal Revenue Code as amended and in effect for the taxable year, with respect to wages deemed to be compensation paid in the commonwealth within the meaning of subsection (e) of section thirty-eight of this chapter; provided, however, that with regard to compensation qualifying for this deduction and the deduction under section thirty-eight F of this chapter, the corporation may elect either of two deductions but not both. Any such election must be made annually on the return filed and shall be irrevocable.

M.G.L. c. 63, § 38II Cranberry production

c. 63, § 38II. Cranberry production [Text of section effective for tax years beginning on or after January 1, 2020. See 2021, 24, Sec. 143. Repealed by 2021, 24, Sec. 38 effective January 1, 2030. See 2021, 24, Sec. 148 as amended by 2024, 238, Sec. 277.] Section 38II. (a) As used in this section, the following words shall have the following meanings unless the context clearly requires otherwise: ''Commissioner'', the commissioner of revenue. ''Cranberry bog'', an area actively cultivated for the harvesting or production of cranberries. ''Qualified renovation'', the renovation, repair, replacement, regrading or restoration of a cranberry bog for the cultivation, harvesting or production of cranberries or any other activity or action associated with the renovation of an abandoned cranberry bog; provided, however, that ''qualified renovation'' shall not include the construction of facilities or structures for the processing of cranberries. ''Qualified renovation expenditure'', an expenditure or a cost directly incurred in connection with the qualified renovation of a cranberry bog; provided, however, that ''qualified renovation expenditure'' shall not include costs incurred in acquiring or purchasing property for the construction of facilities or structures for the cultivation, harvesting or production of cranberries. ''Secretary'', the secretary of energy and environmental affairs. ''Taxpayer'', a taxpayer subject to taxation under this chapter. (b)(1) A taxpayer primarily engaged in cranberry production shall be allowed a credit against the taxes imposed by this chapter equal to 25 per cent of the total qualified renovation expenditures incurred in connection with the qualified renovation of a cranberry bog during the taxable year; provided, however, that the amount of the credit that may be claimed by a taxpayer under this section shall not exceed $100,000. (2) The credit under this section shall be taken against the taxes imposed under this chapter and shall be refundable. The commissioner shall apply the credit against the liability of the taxpayer as determined on its return, as first reduced by any other available credits, and shall then refund to the taxpayer the balance of the credits. If the amount of the credit allowed under this section exceeds the taxpayer's tax liability, the commissioner shall treat the excess as an overpayment and shall pay the taxpayer the entire amount of the excess. Any amount of the tax credit that exceeds the tax due for a taxable year may be carried forward by the taxpayer to any of the 5 subsequent taxable years. (3) The secretary, in consultation with the commissioner of agricultural resources, shall authorize annually tax credits under this subsection together with subsection (w) of section 6 of chapter 62 in an amount not to exceed $2,000,000 per taxable year. No credits shall be allowed under this section except to the extent authorized in this section. (c) For a taxpayer to qualify for the credit provided for under this section, the taxpayer shall file with the secretary a summary of qualified renovation expenditures in connection with the qualified renovation. The secretary shall approve the summary of qualified renovation expenditures and provide notice to the commissioner. Any qualified renovation expenditures applicable to this credit shall be treated for purposes of this section as made on the date that the secretary provides notice of the certification to the commissioner. (d) Any portion of tax credits not awarded by the secretary in a calendar year shall not be applied to awards in a subsequent calendar year. The secretary shall provide any documentation that the commissioner may deem necessary to confirm compliance with paragraph (3) of subsection (b) and the commissioner shall provide a report confirming compliance to the secretary of administration and finance. (e) Annually, not later than September 1, the secretary shall file a report with the house and senate committees on ways and means, the joint committee on environment, natural resources and agriculture and the joint committee on revenue identifying the total amount of tax credits claimed and the total amount of tax credits refunded pursuant to this section in the preceding fiscal year. (f) The secretary, in consultation with the commissioner of agricultural resources and the commissioner of revenue, shall promulgate regulations or other guidelines necessary for the administration and implementation of this section.

M.G.L. c. 63, § 38J Qualified research contribution deduction

c. 63, § 38J. Qualified research contribution deduction Section 38J. In determining the net income subject to tax under this chapter, a business corporation may deduct, in addition to any other allowable deduction under this chapter, an amount equal to twenty-five per cent of the allowable deduction for any qualified research contribution, as defined in section one hundred and seventy (e)(4) of the Federal Internal Revenue Code as amended and in effect for the taxable year, to an educational organization, as therein defined, located in the commonwealth.

M.G.L. c. 63, § 38JJ Tax credits for qualified employees with disabilities

c. 63, § 38JJ. Tax credits for qualified employees with disabilities Section 38JJ. (a) A business corporation engaged in business in the commonwealth shall be allowed a credit equal to $5,000 or 30 per cent of the wages paid to each qualified employee with a disability in the first taxable year of employment, whichever is less, against the tax liability imposed by this chapter. Such employer shall be allowed a credit equal to $2,000 or 30 per cent of the wages paid to each qualified employee with a disability in each subsequent taxable year of employment, whichever is less, against the tax liability imposed by this chapter. If a credit allowed by this section exceeds the tax otherwise due under this chapter, 100 per cent of the balance of such credit may, at the option of the taxpayer, be refundable to the taxpayer. In order to qualify, the employee with a disability shall be: (i) certified by MassAbility as meeting the definition of disability under the Americans with Disabilities Act, 42 U.S.C. 12102; (ii) capable of working independently; (iii) physically or mentally impaired in a manner that constitutes or results in a substantial impediment to employment for the individual; and (iv) hired by the employer after July 1, 2021. (b) To be eligible for a credit under this section: (i) the primary place of employment and the primary place of residence of the employee shall be in the commonwealth; (ii) the business shall receive the applicable certification from MassAbility that the employee qualifies not later than the day the employee begins work; provided, reasonable exceptions to this timeframe may be established through regulation; and (iii) the employee shall be employed by the business corporation for a period of at least 12 consecutive months prior to and in the taxable year in which the credit is claimed. (c) In the case of a business corporation that is subject to a minimum excise under this chapter, the amount of the credit allowed by this section shall not reduce the excise to an amount less than such minimum excise. (d) A business corporation that is eligible for and claims the credit allowed under this section in a taxable year with respect to a qualified employee with a disability shall be eligible for such credit in the subsequent taxable year with respect to such qualified employee. Any credit allowed under this section shall not be transferable. (e) The secretary of health and human services, in consultation with the commissioner, shall promulgate regulations establishing an application process for the credit.

M.G.L. c. 63, § 38KK Tax credits for qualified employers hiring members of the national guard

c. 63, § 38KK. Tax credits for qualified employers hiring members of the national guard [Text of section applicable for qualified employees hired after July 1, 2022 and for tax years beginning on or after January 1, 2023. See 2022, 268, Sec. 269.] Section 38KK. (a) A business corporation with not more than 100 employees may be allowed a credit against its excise due under this chapter in an amount equal to $2,000 for each member of the Massachusetts national guard hired by the business corporation. A business corporation that is eligible for and claims the credit allowed under this section in a taxable year with respect to a member of the Massachusetts national guard shall be eligible for a second credit of $2,000 in the subsequent taxable year with respect to such member of the Massachusetts national guard, subject to certification of continued employment by the employer to the Massachusetts office of business development during the subsequent taxable year. (b) To be eligible for a credit under this section: (i) the primary place of employment and the primary residence of the member of the Massachusetts national guard shall be in the commonwealth; and (ii) not later than 6 months after an individual begins work, a business shall have obtained the applicable certification from the office of the adjutant general that the individual is a member of the Massachusetts national guard. (c) In the case of a business corporation that is subject to a minimum excise under this chapter, the amount of the credit allowed by this section shall not reduce the excise to an amount less than such minimum excise. (d) A credit allowed under this section shall not be transferable or refundable. Any amount of the credit allowed under this section that exceeds the tax due for a taxable year may be carried forward to any of the 3 subsequent taxable years. (e) The total cumulative value of the credits authorized pursuant to this section and subsection (aa) of section 6 of chapter 62 shall not exceed $1,000,000 annually. (f) The Massachusetts office of business development, in consultation with the commissioner, shall authorize, administer and determine eligibility for the tax credit pursuant to this section and subsection (aa) of section 6 of chapter 62 and allocate the credit in accordance with the standards and requirements set forth in regulations promulgated pursuant to this section. (g) The Massachusetts office of business development, in consultation with the commissioner, shall promulgate regulations establishing an application process for the credit; provided, that the credit shall be authorized for all eligible applicants on a first-come, first-served basis; and provided further, that the $1,000,000 limit on the total cumulative value of the credits authorized annually set forth in subsection (e) shall not be exceeded.

M.G.L. c. 63, § 38L Natural Heritage and Endangered Species Fund; contributions

c. 63, § 38L. Natural Heritage and Endangered Species Fund; contributions Section 38L. Every corporation that files a return may voluntarily contribute all or part of any refund to which it is entitled or may voluntarily add an amount onto any amount due to be credited to the Natural Heritage and Endangered Species Fund. At the beginning of each fiscal year, one dollar shall be credited from the General Fund to the Natural Heritage and Endangered Species Fund for each dollar contributed by corporations to the Natural Heritage and Endangered Species Fund in the prior fiscal year under the provisions of this section. The commissioner of the department of revenue shall certify to the state comptroller total revenues contributed by the corporations in the prior fiscal year. A contribution made under this section may be made with respect to any taxable year at the time of filing the return of the tax imposed by this chapter for such taxable year; provided, however, that the commissioner shall prescribe the manner in which such contribution shall be made on the face of the return required by section five of chapter sixty-two C. The commissioner shall annually report the total amount designated under this section to the state treasurer who shall credit such amount, plus accrued interest, to the Natural Heritage and Endangered Species Fund.

M.G.L. c. 63, § 38LL Offshore wind tax incentive program; refundable jobs credit

c. 63, § 38LL. Offshore wind tax incentive program; refundable jobs credit [Text of section effective until January 1, 2033 for taxable years beginning on or after January 1, 2023. Repealed by 2022, 268, Sec. 272. See 2022, 268, Secs. 271 and 273.] Section 38LL. (a)(1) A corporation subject to tax under this chapter, to the extent authorized by the offshore wind tax incentive program established in subsection (d) of section 8A of chapter 23J, may be allowed a refundable jobs credit against the tax liability imposed under this chapter in an amount determined by the Massachusetts clean energy technology center established in section 2 of said chapter 23J, in consultation with the department of revenue. (2) A corporation taking a credit under this section shall commit to the creation of not less than of 10 net new permanent full-time employees in the commonwealth. (3) A credit allowed under this section shall reduce the liability of the corporation under this chapter for the taxable year. If a credit claimed under this section by a corporation exceeds the corporation's liability as otherwise determined under this chapter for the taxable year, 90 per cent of such excess credit, to the extent authorized by the offshore wind tax incentive program, shall be refundable to the corporation. Excess credit amounts shall not be carried forward to other taxable years. (4) The department of revenue shall issue the refundable portion of the jobs credit without further appropriation and in accordance with the cumulative amount, including the current year costs of incentives allowed in previous years, which shall not exceed $35,000,000 annually as set forth in subsection (d) of section 8A of chapter 23J [There is no subsection (b).]

M.G.L. c. 63, § 38M Credit against amount of excise due; research expenses

c. 63, § 38M. Credit against amount of excise due; research expenses Section 38M. (a)(1) A business corporation shall be allowed a credit against its excise due under this chapter equal to the sum of 10 per cent of the excess, if any, of the qualified research expenses for the taxable year over the base amount and 15 per cent of the basic research payments determined under subsection (e)(1)(A) of section 41 of the federal Internal Revenue Code. (2) Other than as provided in paragraph (3), ''qualified research expenses'', ''basic research payment'', ''credit year'' and any other term affecting the calculation of the credit shall, unless the context otherwise requires, have the same meanings as under said section 41 of said Code as amended and in effect on August 12, 1991; provided, however, that the terms shall only apply to expenditures for research conducted in the commonwealth. (2) For the purposes of this subsection, the ''base amount'' shall be the product of: (i) the average annual gross receipts of the taxpayer for the 4 taxable years preceding the credit year; and (ii) a fixed-base ratio and the ''fixed base ratio'' shall be the percentage which the average aggregate qualified research expenses for the taxpayer for the third and fourth taxable years preceding the credit year is of the annual average gross receipts for those years; provided, however, that the fixed base ratio shall not exceed 16 per cent. In determining the amount of the credit allowable under this section, the commissioner of revenue may aggregate the activities of all corporations that are members of a controlled group of corporations as defined by subsection (f)(1)(A) of said section 41 of said Code. The commissioner also may aggregate the activities of all entities, whether or not incorporated, that are under common control as defined by subsection (f)(1)(B) of said section 41 of said Code. (b) A business corporation may choose to have the credit determined under this subsection rather than under subsection (a). At the election of the taxpayer for calendar years 2015, 2016 and 2017, the amount of the taxpayer's credit shall be equal to 5 per cent of the taxpayer's qualified research expenses for the taxable year that exceeds 50 per cent of the taxpayer's average qualified research expenses for the 3 taxable years preceding the taxable year for which the credit is being determined. At the election of the taxpayer for calendar years 2018, 2019 and 2020, the amount of the taxpayer's credit shall be equal to 7.5 per cent of the taxpayer's qualified research expenses for the taxable year that exceeds 50 per cent of the taxpayer's average qualified research expenses for the 3 taxable years preceding the taxable year for which the credit is being determined. Beginning in calendar year 2021, at the election of the taxpayer, the amount of the taxpayer's credit shall be equal to 10 per cent of the taxpayer's qualified research expenses for the taxable year that exceeds 50 per cent of the taxpayer's average qualified research expenses for the 3 taxable years preceding the taxable year for which the credit is being determined. If the taxpayer did not have qualified research expenses in any 1 of the 3 taxable years preceding the taxable year for which the credit is being determined, the amount of the credit is equal to 5 per cent of the taxpayer's qualified research expense for the taxable year. Under this subsection, ''qualified research expenses'' and any other terms affecting the calculation of the credit shall, unless the context otherwise requires, have the same meanings as under said section 41 of said Code as amended and in effect on January 1, 2014; provided, however, that the terms shall only apply to expenditures for research conducted in the commonwealth. (c) For the purposes of section 30, the deduction from gross income that may be taken with respect to any expenditures qualifying for a credit under said section 41 of said Code as amended and in effect on August 12, 1991 shall be based upon its cost less the credit allowable under this section; provided, however, that subsection (c) of section 280C of said Code shall not apply. (d) The credit allowed under this section for any taxable year shall not reduce the excise to less than the amount due under subsection (b) of section 39, section 67 and under any act in addition thereto. (e) The credit allowed under this section shall be limited to 100 per cent of a corporation's first $25,000 of excise, as determined before the allowance of any credits, plus 75 per cent of the corporation's excise, as so determined in excess of $25,000. The commissioner shall promulgate regulations similar to those authorized under subsection (c)(2)(B) of section 38 of said Code for the purposes of apportioning the $25,000 amount among members of a controlled group. Nothing in this section shall alter section 32C as it affects other credits under this chapter. (f) For a corporation filing a combined return of income under section 32B, a credit generated by an individual member corporation under this section shall first be applied against the excise attributable to the corporation under section 39 subject to the limitations of subsections (d) and (e). An member corporation with an excess research and development credit may apply its excess credit against the excise of another group member to the extent that the other member corporation may use additional credits under the limitations of said subsections (d) and (e). Unused and unexpired credits generated by a member corporation shall be carried over from year to year by the individual corporation that generated the credit. Nothing in this section shall alter paragraph (h) of section 31A. (g) Any corporation entitled to a credit under this section for any taxable year may carry over and apply to its excise for any 1 or more of the next succeeding 15 taxable years the portion, as reduced from year to year, of its credit which exceeds its excise for the taxable year. Any corporation may carry over and apply to its excise for any subsequent taxable year the portion of those credits, as reduced from year to year, which were not allowed by subsection (e). (h) The commissioner shall promulgate regulations as necessary to implement this section. (i) This section shall apply to expenditures incurred on or after January 1, 1991; provided, however, that, in the case of any taxable year which begins before January 1, 1991 and ends before December 31, 1991, the base amount and the qualified organization base period amount with respect to the taxable year shall be the amount that bears the same ratio to the base amount and the qualified organization base period amount for the year, determined without regard to this paragraph, as the number of days in the taxable year on or after January 1, 1991 bears to the total number of days in that taxable year. (j)(1) The credit allowed by this section, at the election of the taxpayer in accordance with regulations promulgated by the commissioner, may be applied separately with respect to the: (i) qualified research expenses and gross receipts of the taxpayer attributable to defense-related activities; and (ii) qualified research expenses and gross receipts of the taxpayer attributable to other activities. (2) For the purposes of this subsection, ''defense-related activities'' shall mean any activity carried out in the commonwealth that relates to the business of researching, developing and producing for sale, pursuant to a contract or subcontract thereof: (i) any arm, ammunition or implement of war designated in the munitions list published pursuant to section 38 of the federal Arms Export Act, 22 U.S.C. § 2778 to the extent that the property shall be specifically designed, modified or equipped for military purposes; (ii) equipment for the federal National Aeronautics and Space Administration; and (iii) medical countermeasures, including, but not limited to: (A) medicines and medical supplies that can be used to diagnose, prevent or treat diseases related to chemical, biological, radiological or nuclear threats; (B) biologic products, vaccines, blood products and antibodies; and (C) antimicrobial or antiviral drugs, diagnostic tests to identify threat agents and personal protective equipment. (3) This paragraph shall apply to taxable years beginning on or after January 1, 1995. (k)(1) As used in this section, the following words shall have the following meanings unless the context clearly requires otherwise: ''Climatetech'', as defined in section 1 of chapter 23J. ''Climatetech company'', as defined in section 1 of chapter 23J. ''Life sciences'', advanced and applied sciences that expand the understanding of human physiology and have the potential to lead to medical advances or therapeutic applications, including, but not limited to, agricultural biotechnology, biogenerics, bioinformatics, biomedical engineering, biopharmaceuticals, biotechnology, biosecurity, life sciences related artificial intelligence, chemical synthesis, chemistry technology, diagnostics, genomics, image analysis, marine biology, marine technology, medical technology, medical devices, nanotechnology, natural product pharmaceuticals, proteomics, regenerative and preventative medicine, RNA interference, stem cell research and veterinary science. ''Person'', a natural person, corporation, association, partnership or other legal entity. ''Taxpayer'', a person, certified life sciences company or certified climatetech company subject to the taxes imposed by this chapter or chapters 62, 64H or 64I. (2) If a credit claimed under this section by a taxpayer exceeds the amount that may otherwise be allowed under this section for a taxable year, 90 per cent of the balance of that credit may, at the option of the taxpayer and to the extent authorized pursuant to the life sciences tax incentive program established in subsection (d) of section 5 of chapter 23I or the climatetech tax incentive program established in subsection (d) of section 16 of chapter 23J, be refundable to the taxpayer for the taxable year. If the credit balance is refunded to the taxpayer, the credit carryover provisions of paragraph (f) shall not apply.

M.G.L. c. 63, § 38MM Refundable credit for capital investment in an offshore wind facility; amount; eligibility; limitations; administration

c. 63, § 38MM. Refundable credit for capital investment in an offshore wind facility; amount; eligibility; limitations; administration [Text of section effective until January 1, 2033 for taxable years beginning on or after January 1, 2023. Repealed by 2022, 268, Sec. 272. See 2022, 268, Secs. 271 and 273.] Section 38MM. (a) As used in this section, the following words shall, unless the context clearly requires otherwise, have the following meanings:— ''Capital investment'', expenses incurred for the site preparation and construction, repair, renovation, improvement or equipping of a building, structure, facility or other improvements to real property, including, but not limited to, site-related utility and transportation infrastructure improvements. ''Center'', the Massachusetts clean energy technology center established in section 2 of chapter 23J. ''Certified offshore wind company'', as defined in section 1 of chapter 23J. ''Offshore wind facility'', any building, complex of buildings or structural components of buildings, including water access infrastructure, and all machinery and equipment used in the manufacturing, assembly, development or administration of component parts that are primarily used to support the offshore wind industry. ''Owner'', a taxpayer subject to tax under this chapter that: (i) is a corporation that holds title to an offshore wind facility; or (ii) ground leases the land underlying an offshore wind facility for at least 50 years. ''Tenant'', a taxpayer subject to tax under this chapter that is a lessee in an offshore wind facility. (b) An owner or tenant, to the extent authorized by the offshore wind tax incentive program established in section 8A of chapter 23J, may take a refundable credit against the taxes imposed by this chapter in an amount, as determined by the center, of up to 50 per cent of the owner's total capital investment in an offshore wind facility. The total amount of tax credit awarded pursuant to this section shall be distributed in equal parts over the 5 taxable years that correspond to the period in which the owner or tenant is certified pursuant to said section 8A of said chapter 23J. (c) An owner shall be eligible for a tax credit authorized under this section if the owner demonstrates to the center that: (i) the owner is a certified offshore wind company; (ii) the owner's total capital investment in the offshore wind facility equals not less than $35,000,000; and (iii) the offshore wind facility will employ not less than 200 new full-time employees by the fifth year of the owner's certification period under section 8A of chapter 23J. Upon verification, the center will provide this information to the department of revenue for the purpose of administering the credit. (d) A tenant shall be eligible for a tax credit authorized pursuant to this section if the tenant demonstrates to the center that: (i) the tenant is a certified offshore wind company; (ii) the owner has made a total capital investment in the facility that equals not less than $35,000,000; (iii) the tenant occupies a leased area of the offshore wind facility that represents not less than 25 per cent of total leasable square footage of the facility; and (iv) the tenant will employ not less than 50 full-time employees by the fifth year of the tenant's certification period under section 8A of chapter 23J. Upon verification, the center will provide this information to the department of revenue for the purpose of administering the credit. The amount of tax credits awarded under this section to a tenant for a taxable year shall not exceed the tenant's total lease payments for occupancy of the offshore wind facility for the taxable year. (e) An owner or tenant taking a credit authorized in this section shall not take the credits authorized in sections 38N or 38LL in the same taxable year. (f) The department of revenue shall issue the refundable portion of the credit without further appropriation and in accordance with the cumulative amount, including the current year costs of incentives allowed in previous years, which shall not exceed $35,000,000 annually as set forth in subsection (d) of section 8A of chapter 23J. (g) The department of revenue shall promulgate such rules and regulations as are necessary to administer the credit established in this section.

M.G.L. c. 63, § 38N Economic development incentive program; tax credit for certified projects

c. 63, § 38N. Economic development incentive program; tax credit for certified projects Section 38N. (a) As used in this section, ''Certified project'', ''EDIP contract'', ''Proportion of compliance'' and ''Refundable credit'' shall have the same meanings as ascribed to them in section 3A of chapter 23A. (b) A corporation subject to tax under this chapter that is the controlling business of a certified project, or an affiliate of a controlling business, may take a credit against the excise imposed by this chapter to the extent that the credit is authorized by the EACC. The amount of the credit shall be determined by EACC under section 3D of said chapter 23A and other criteria or guidelines that the council shall from time to time adopt. A credit allowed under this section shall be taken only after the corporation executes an EDIP contract under said section 3D of said chapter 23A. (c) The total amount of credits that may be authorized by the EACC in a calendar year pursuant to this section and subsection (g) of section 6 of chapter 62 shall not exceed $30,000,000 annually; provided, however, that the total amount shall not include credits under section 38BB of this chapter or subsection (q) of said section 6 of said chapter 62; and provided further, that the total amount shall include: (i) refundable credits granted during the year under this section or said subsection (g) of said section (6) of said chapter 62; (ii) nonrefundable credits granted during the year under this section or said subsection (g) of said section (6) of said chapter 62 to the extent that such nonrefundable credits are estimated by the commissioner of revenue to offset tax liabilities during the year; and (iii) carryforwards of credits from prior years under this section or said subsection (g) of said section 6 of said chapter 62 to the extent that such credit carryforwards, if any, are estimated by the commissioner of revenue to offset tax liabilities during the year. A portion of the annual cap not awarded by the EACC in a calendar year shall not be applied to awards in a subsequent year. The economic assistance coordinating council shall provide the commissioner of revenue with the documentation that the commissioner deems necessary to confirm compliance with the annual cap and the commissioner shall provide a report confirming compliance to the secretary of administration and finance and the secretary of economic development. Notwithstanding section 21 of chapter 62C, the department of revenue shall provide the EACC with documentation confirming credits claimed under this section by a corporation subject to tax under this chapter that is the controlling business of a certified project or an affiliate of a controlling business. The credit allowed under this section may be taken by an eligible corporation; provided, however, that the credit allowed by section 31H shall not be taken by such a corporation. (d) A corporation entitled to a credit under this section for a taxable year may, to the extent authorized by the EACC, carry over and apply to the tax liability imposed by this chapter for any of the next succeeding 10 taxable years the portion, as reduced from year to year, of those credits that exceed the tax liability imposed by this chapter for the taxable year; provided, however, that the corporation shall not apply the credit to the tax liability imposed by this chapter for a taxable year beginning more than 5 years after the certified project ceases to qualify as a certified project under chapter 23A; and provided further, that notwithstanding the foregoing, the economic assistance coordinating council may limit or restrict carryover of credits under section 3D of said chapter 23A. (e) If a credit allowed under subsection (b) is designated by the EACC as a refundable credit, the credit shall first be applied against the tax liability of the corporation under this chapter and 100 per cent of the balance of the credit may, at the option of the corporation and to the extent authorized by the EACC, be refundable to the corporation. In each case, the EACC shall specify the timing of the refund which may be for the taxable year in which all or a portion of the certified project is placed in service or the taxable year subsequent to the year in which the required jobs are created. If the credit balance is refunded to the corporation, the credit carryover provisions of subsection (d) shall not apply. (f) If a corporation is subject to a minimum excise under this chapter, the amount of the credit allowed by this section shall not reduce the excise to an amount less than the minimum excise. (g) If corporations file a combined return of income under section 32B, a credit generated by an individual member corporation under this section shall first be applied against the separately determined excise attributable to that member except as otherwise provided in this section. A member corporation with an excess credit may apply its excess credit against the excise of another group member to the extent that the other member corporation can use additional credits. An unused, unexpired credit generated by a member corporation shall be carried over from year to year by the individual corporation that generated the credit to the extent authorized by the EACC. (h) The commissioner of revenue may promulgate rules and regulations necessary to implement this section including, but not limited to, provisions to prevent the generation of multiple credits with respect to the same property. (i) If the EACC revokes the certification of a project under section 3F of chapter 23A, a portion of the tax credit otherwise allowed by this section and claimed by the corporation prior to the date on which the EACC makes the determination to revoke its certification of the project shall be added back as additional tax due and shall be reported as such on the return of the corporation for the taxable period in which the EACC makes the determination to revoke the certification of the project. The amount of credits subject to recapture shall be proportionate to the corporation's compliance with the job creation requirements applicable to the certified project. The amount of credits subject to recapture shall be equal to the corporation's proportion of compliance, as determined by the EACC as part of its revocation process and reported to the corporation and the department of revenue at the time certification is revoked. (j) If a certified project is sold or otherwise disposed of, a tax credit allowed under this section may be transferred to the purchaser of the certified project; provided, however, that the EDIP contract shall be assigned to and assumed by the purchaser of the certified project and the assignment and assumption shall be approved in writing by the EACC. (k) Nothing in this section shall limit the authority of the commissioner of revenue to make an adjustment to a corporation's liability upon audit.

M.G.L. c. 63, § 38NN Nonrefundable credits for trainings; eligibility; credit amount

c. 63, § 38NN. Nonrefundable credits for trainings; eligibility; credit amount [ Text of section effective for tax years beginning on or after January 1, 2024. See 2024, 88, Sec. 29. Repealed by 2024, 88, Sec. 8, applicable as provided by 2024, 88, Sec. 30.] Section 38NN. (a) As used in this subsection, the following words shall, unless the context clearly requires otherwise, have the following meanings: ''Authorized training program'', a program approved by the secretary of administration and finance and the secretary of labor and workforce development that is offered by an employer to train qualified trainees; provided, that said program shall assist qualified trainees in developing skills and accessing resources to prepare qualified trainees to enter the workforce; and provided further, that no authorized training program shall provide compensation to a qualified trainee without work authorization and said program shall ensure the qualified trainee has no expectation of compensation for training. ''Qualified trainee'', an individual receiving benefits through the emergency housing assistance program pursuant to section 30 of chapter 23B and 760 CMR 67.00 or an individual in an overflow emergency shelter site established in response to the capacity limitation on said program pursuant to a declaration issued by the secretary of housing and livable communities dated October 31, 2023, the extension of the declaration dated February 28, 2024 and any subsequent extensions, issued pursuant to 760 CMR 67.10, as inserted by emergency regulations issued by the executive office of housing and livable communities on October 31, 2023, and accompanying guidance issued pursuant to said declaration and 760 CMR 67.10, who: (i)(A) has not received work authorization; or (B) is currently unemployed; and (ii) is participating in an authorized training program. ''Training'', teaching, developing or enhancing skills and knowledge to improve capacity, productivity and performance to enter the workforce, including, but not limited to, classes, clinics or other hands-on methods. ''Work authorization'', federal authorization to work in the United States pursuant to 8 CFR 274a. (b) A business corporation may be allowed a nonrefundable credit equal to $2,500 for each qualified trainee who receives training through an authorized training program by said business corporation in a taxable year. If the credit allowed for a taxable year exceeds the taxpayer's liability for that taxable year, the taxpayer may carry forward and apply the credit in the subsequent taxable year. (c) To be eligible for the credit pursuant to subsection (b), the business corporation shall: (i) have a place of business in the commonwealth; (ii) conduct the authorized training program in the commonwealth and in compliance with recommendations of the secretary of labor and workforce development pursuant to subsection (e); and (iii) meet any additional requirements determined by the secretary of administration and finance and the secretary of labor and workforce development. (d) The total amount of credits that may be authorized in a taxable year pursuant to subsection (dd) of section 6 of chapter 62 and this section shall not exceed $10,000,000. (e) The secretary of labor and workforce development shall: (i) identify industries with the greatest workforce needs in geographically diverse areas of the commonwealth in which qualified trainees may be employed after receiving work authorization; provided, that the secretary of labor and workforce development shall identify industries with varying work experience, education, certification and licensure requirements for training; (ii) provide recommendations for training criteria to enable qualified trainees to be successful in the workforce; provided, that the secretary of labor and workforce development shall provide specific industry recommendations for training; and provided further, that the secretary may identify existing training programs that meet said training criteria; and (iii) perform outreach to industries identified as having the greatest workforce needs to provide notice of the tax credit program established pursuant to this section.

M.G.L. c. 63, § 38O Economic target areas; tax deduction for renovation of abandoned buildings

c. 63, § 38O. Economic target areas; tax deduction for renovation of abandoned buildings [Text of section effective for tax years beginning after January 1, 2019. See 2018, 228, Sec. 72.] Section 38O. A corporation whose excise under this chapter is based on net income may, in determining such net income, deduct an amount equal to 10 per cent of the cost of renovating an abandoned building that is part of a certified project designated under section 3A of chapter 23A.

M.G.L. c. 63, § 38OO Credit against the tax liability; transfer of credit; carry forward of credit; disallowance of credit by commissioner; adoption of regulations

c. 63, § 38OO. Credit against the tax liability; transfer of credit; carry forward of credit; disallowance of credit by commissioner; adoption of regulations [Text of section effective until January 1, 2030, for tax years beginning on or after January 1, 2025. See 2024, 150, Sec. 140. Repealed by 2024, 150, Sec. 137. See 2024, 150, Sec. 142.] Section 38OO. (a) As used in this section, the following words shall, unless the context clearly requires otherwise, have the following meanings: ''Development cost'', as defined in section 36 of chapter 23B. ''Executive office'', the executive office of housing and livable communities, established pursuant to chapter 23B. ''Qualified conversion project'', as defined in section 36 of chapter 23B. ''Sponsors'', as defined in section 25 of chapter 23B. (b) A credit shall be allowed against the tax liability imposed by this chapter, to the extent authorized by the executive office, in consultation with the commissioner, for a qualified conversion project that has been completed and certified by the executive office pursuant to section 36 of chapter 23B. The credit shall be equal to an amount not more than 10 per cent of the qualified conversion project development costs. The credit shall be allowed for the taxable year in which the executive office provides the commissioner written notification of completion of the certified qualified conversion project. For any certified qualified conversion project, development costs applicable to this credit shall be treated for purposes of this section as made on the date that the executive office provides the commissioner written notification of completion of the certified qualified conversion project and any data related to the development costs. (c) A taxpayer eligible for the credit may, with prior notice to the commissioner, transfer the credit, in whole or in part, to any individual or entity with tax under this chapter or chapter 62, and the transferee shall be entitled to apply the credit against the tax with the same effect as if the transferee had incurred the development costs itself. If the sponsor of the certified housing development qualified conversion project is a partnership or a limited liability company taxed as a partnership, the credit, if transferred, must be transferred by the partnership or the limited liability company. If the credit allowed to a partnership, a limited liability company taxed as a partnership or multiple owners of property are not transferred they shall be passed through to the persons designated as partners, members or owners, respectively, pro rata or pursuant to an executed agreement among the persons designated as partners, members or owners documenting an alternative distribution method without regard to their sharing of other tax or economic attributes of the entity. Credits passed through to individual partners and members shall not be transferable. Any amount of the tax credit that exceeds the tax due for a taxable year may be carried forward by the transferee, buyer or assignee subsequent taxable years from which a certificate is initially issued by the executive office; provided, however, that in no event shall the transferee apply the credit to the tax due for any taxable year beginning more than 10 years after the taxable year in which the executive office provides the commissioner written notification of completion of the certified qualified conversion project. (d) If the credit allowable for any taxable year exceeds the taxpayer's tax liability for that tax year, the taxpayer may carry forward and apply in any subsequent taxable year, the portion, as reduced from year to year, of the credit which exceed the tax for the taxable year; provided, however, that in no event shall the taxpayer apply the credit to the tax due for any taxable year beginning more than 10 years after the taxable year in which the executive office provides the commissioner written notification of completion of the certified qualified conversion project. (e) The commissioner of revenue may, as of the effective date of a revocation pursuant to subsection (f) of section 36 of chapter 23B, disallow any credits allowed under this section. (f) The commissioner, in consultation with the executive office, may adopt regulations necessary to carry out this section, including regulations to recapture the value of any tax credits allowed under this section.

M.G.L. c. 63, § 38PP Massachusetts homeownership tax credit; amount allowed; eligibility certificate; affordability period; transfer, sale or assignment of tax credit; fees; adoption and promulgation of rules and regulations

c. 63, § 38PP. Massachusetts homeownership tax credit; amount allowed; eligibility certificate; affordability period; transfer, sale or assignment of tax credit; fees; adoption and promulgation of rules and regulations [Text of section effective for tax years beginning on or after January 1, 2025. See 2024, 150, Sec. 140.] Section 38PP. (a) For the purposes of this section, unless the context clearly requires otherwise, the following words shall have the following meanings: ''Affordability period'', the 10–year period that commences on the date of the initial sale of a single-family dwelling constructed as part of a qualified homeownership development project. ''Affordability restriction'', a restriction in form and substance approved by the director and the secretary, imposing resale restrictions on a single-family dwelling constructed as part of a qualified homeownership development project during the affordability period. ''Commissioner'', the commissioner of revenue. ''Credit amount'', the amount computed by the director pursuant to subsection (d) before issuing an eligibility certificate. ''Credit award amount'', the amount determined by the director and stipulated in the notice sent pursuant to paragraph (2) of subsection (c). ''Director'', the executive director of the Massachusetts Housing Finance Agency, established pursuant to chapter 708 of the acts of 1966. ''Eligibility certificate'', a certificate issued to a sponsor pursuant to subsection (d). ''Eligible location'', a geographic area in which a qualified homeownership development project may be located, based on criteria established in the qualified homeownership allocation plan. ''Maximum credit amount'', the amount equal to 35 per cent of the lesser of: (i) the total qualified project expenditures calculated on a per single-family dwelling basis; or (ii) 80 per cent of the area median new single-family dwelling sales price, subject to such further limitations as may be established under the qualified homeownership credit allocation plan. ''Project development team'', the group of entities that develops, constructs, reports, appraises, finances and services the associated properties of a qualified homeownership development project in partnership with the project development owner. ''Qualified buyer'', an individual that is a first-time homebuyer with an annual income not exceeding 120 per cent of the area median income, as determined by the United States Department of Housing and Urban Development, for the location in which the single-family dwelling being purchased is located, and who satisfies any additional qualifications established by the director under the qualified homeownership credit allocation plan. ''Qualified homeownership credit allocation plan'', a plan adopted by the director with the approval of the secretary, establishing: (i) criteria and metrics under which homeownership development projects shall be assessed for qualification and the geographic areas in which qualified homeownership development projects may be located; (ii) criteria for approving and ranking applications for credits; (iii) a methodology to determine applicable median new single-family dwelling sales prices for the area in which the project is located; (iv) mechanisms to maintain affordability of each single-family dwelling that is created as part of a qualified homeownership development project and restricted for sale to qualified buyers, throughout the affordability period; (v) criteria to be used in determining qualification as a qualified buyer; (vi) criteria governing the purchase, ownership and sale of completed qualified homeownership development project single-family dwellings; and (vii) the manner of determining qualified project expenditures. ''Qualified homeownership development project'', a project to develop for sale single-family dwellings in the commonwealth that satisfies any qualifications established by the director with the approval of the secretary in the qualified homeownership credit allocation plan; provided, that the proposed project shall: (i) involve the new construction of not less than 10 single-family dwellings; (ii) be located in an eligible location; and (iii) result in not less than 20 per cent of the single-family dwellings being sold to qualified buyers, subject to an affordability restriction in accordance with the qualified homeownership credit allocation plan. ''Qualified project expenditure'', an expenditure directly related to the construction of a qualified homeownership development project, including, but not limited to, the cost of acquiring land, site assessment and remediation of hazardous materials and as further provided in the qualified homeownership credit allocation plan; provided, however, that: (i) the director has certified that the proposed project meets the definition of a qualified homeownership development project; (ii) prior to construction, the director has certified that all or a portion of the project costs are for new construction; and (iii) after the construction of the project has been completed, the director has certified that the project has been completed in compliance with this section and the requirements and conditions of any prior certifications. ''Secretary'', the secretary of housing and livable communities. ''Single-family dwelling'', (i) a residential property containing not more than 4 residential units; provided, that all units shall comprise a single property, to be sold to and owned by a single homeowner; or (ii) a condominium unit in a professionally managed condominium development. ''Sponsor'', a sponsor, as defined in section 25 of chapter 23B, of a qualified homeownership development project or owner of a qualified homeownership development project. ''Taxpayer'', a taxpayer subject to the income tax under this chapter. [Paragraph (1) of subsection (b) effective until January 1, 2030. For text effective January 1, 2030, see below.] (b)(1) There shall be a Massachusetts homeownership tax credit. The director, in consultation with the secretary, may authorize annually under this section and section 6O of chapter 62 a total sum not exceeding: (i) $10,000,000; (ii) the amount, if any, not authorized in the preceding taxable year; and (iii) any Massachusetts homeownership tax credits returned to the director by a sponsor. [Paragraph (1) of subsection (b) as amended by 2024, 150, Sec. 27 effective January 1, 2030. See 2024, 150, Sec. 142. For text effective until January 1, 2030, see above.] (b)(1) There shall be a Massachusetts homeownership tax credit. The director, in consultation with the secretary, may authorize annually under this section and section 6O of chapter 62 a total sum not exceeding: (i) the amount, if any, not authorized in the preceding taxable year; and (ii) any Massachusetts homeownership tax credits returned to the director by a sponsor. (2) A taxpayer may be allowed a nonrefundable tax credit with respect to a qualified homeownership development project under this section equal to the credit amount listed on the eligibility certificate pursuant to subsection (d). If the credit allowable for any taxable year is unused by the taxpayer or exceeds the taxpayer's tax liability under this chapter for the taxable year, the taxpayer may carry forward and apply in any subsequent taxable year, the portion, as reduced from year to year, of the credit which exceeds the tax for the taxable year; provided, however, that in no event shall the taxpayer apply the credit to the tax due for any taxable year beginning after the affordability period. (3) To be eligible to receive a credit pursuant to this section, a sponsor shall submit an application to the director on a form and in a manner prescribed by the director, in consultation with the secretary; provided, that said application shall include, but shall not be limited to: (i) the name and address of the sponsor; (ii) the names and addresses of all members of the project development team; (iii) an estimate of the total qualified project expenditures; and (iv) any other information as the director, in consultation with the secretary, may require pursuant to the qualified homeownership credit allocation plan. (c)(1) The director, in consultation with the secretary, shall competitively evaluate and approve applications and award tax credits under this section for a qualified homeownership development project in accordance with the qualified homeownership credit allocation plan. The director, in consultation with the secretary, shall determine the credit amount awarded for each qualified homeownership development project, which shall not exceed the maximum credit amount. (2) The director shall send written notice of the tax credit award to the sponsor of a qualified homeownership development project. The notice shall stipulate that receipt of the tax credit is contingent upon the sale of all single-family dwellings that are required to be sold to qualified buyers and issuance of an eligibility certificate. (d)(1) Upon completion of a qualified homeownership development project for which a tax credit was awarded under this section and the sale of all single-family dwellings that are required to be sold to qualified buyers, the sponsor shall provide the director a final qualified project expenditures certification for approval. Immediately after approving the final cost certification, the director shall compute the credit amount and issue an eligibility certificate to the project development owner. The credit amount, which shall be stated on the certificate, shall equal the credit award amount stated in the notice issued under paragraph (2) of subsection (c), subject to any reduction or increase as the result of the approval of the final qualified project expenditures certification; provided, that such amount shall not exceed the maximum credit amount. (2) Each eligibility certificate shall state the credit amount, the years that comprise the affordability period, the name, address and taxpayer identification number of the sponsor and all members of the project development team, the date the certificate is issued, a unique identifying number and any additional information the director, in consultation with the secretary and the commissioner, may require. The director shall certify a copy of each eligibility certificate to the secretary and the commissioner. (e)(1) The sponsor shall maintain ownership of a qualified homeownership development project and all single-family dwellings that are required to be sold to qualified buyers until such dwellings are sold to qualified buyers. (2) The qualified buyer of a single-family dwelling constructed as part of a qualified homeownership development project for which a tax credit was issued under this section shall occupy such single-family dwelling as the qualified buyer's primary residence during the affordability period; provided, that a qualified buyer of a single-family dwelling that includes more than 1 residential unit need only occupy a single residential unit within the single-family dwelling as the qualified buyer's primary residence during the affordability period and may lease any additional units to third-party lessees. (3) If a single-family dwelling constructed as part of a qualified homeownership development project is sold during the affordability period, the seller shall transfer to the director an amount equal to 90 per cent of the gain from such resale, reduced by 10 per cent for each year of the affordability period which ends before the date of such sale, subject to such additional criteria as may be established under the qualified homeownership credit allocation plan. The director shall use any amount received pursuant to a repayment under this paragraph for the purpose of providing financial assistance to first-time homebuyers and offsetting the costs of administering this section. The director may place a lien on each single-family dwelling constructed as part of a qualified homeownership development project for an amount it deems necessary to ensure potential repayment pursuant to this paragraph. (4) During the affordability period, a qualified buyer of a single-family dwelling that includes more than 1 residential unit shall not separate the ownership of individual residential units within the single-family dwelling. (f)(1) All or any portion of a tax credit issued in accordance with this section may be transferred, sold or assigned to any individual or entity and the transferee shall be entitled to claim the credit pursuant to paragraph (2) of subsection (b) with the same effect as if the transferee had incurred the qualified project expenditures itself. (2) A sponsor or transferee desiring to make a transfer, sale or assignment as described in paragraph (1) shall submit to the commissioner a statement that describes the amount of the tax credit for which such transfer, sale or assignment of the tax credit is eligible. The sponsor shall provide to the commissioner appropriate information for proper allocation of the tax credit. (3) If the recapture of a tax credit is required pursuant to subsection (g), any statement submitted to the commissioner pursuant to paragraph (2) shall include the proportion of the tax credit required to be recaptured, the identity of each transferee subject to recapture and the amount of the tax credit previously transferred to such transferee. (g) The director, in consultation with the secretary, shall determine whether a sponsor or qualified homeownership development project: (i) does not qualify for the credit; (ii) ceases to qualify for the credit; or (iii) did not qualify for the credit at the time the credit was claimed. Notwithstanding the time limitations on assessments pursuant to chapter 62C, the commissioner shall determine the taxpayer or taxpayers that claimed the credit, the tax against which the credit was claimed and the amount to be recaptured and shall make an assessment against the taxpayer or taxpayers for the amount to be recaptured under this section. (h) The director may assess application, processing and reporting fees to cover the cost of administering this section. (i) The credit under this section shall be attributed on a pro rata basis to the owners, partners or members of the legal entity entitled to the credit under this section and shall be allowed as a credit against the tax due under this chapter from such owners, partners or members in a manner determined by the commissioner. (j) The secretary, in consultation with the commissioner and director, shall adopt any rules and promulgate any regulations necessary to administer this section.

M.G.L. c. 63, § 38Q Environmental response actions; credit

c. 63, § 38Q. Environmental response actions; credit Section 38Q. (a) A business corporation which commences and diligently pursues an environmental response action on or before August 5, 2028 and which achieves and maintains a permanent solution or remedy operation status in compliance with chapter 21E and the regulations adopted under that chapter which includes an activity and use limitation shall, at the time the permanent solution or remedy operation status is achieved, be allowed a base credit of 25 per cent of the net response and removal costs incurred between August 1, 1998 and January 1, 2029 for any property it owns or leases for business purposes and which is located within an economically distressed area as defined in section 2 of chapter 21E, if these costs are not less than 15 per cent of the assessed value of the property before remediation, and if the site was reported to the department of environmental protection. A credit of 50 per cent of these costs shall be allowed for a corporation which achieves and maintains a permanent solution or remedy operation status in compliance with chapter 21E and the Massachusetts contingency plan provided in 310 CMR 40.0000 which does not include an activity and use limitation. Only a business corporation that is an eligible person as defined by section 2 of chapter 21E, and not subject to any enforcement action brought under chapter 21E, shall be allowed a credit. Any credit allowed under this subsection may be taken only after a response action outcome statement or remedy operation status submittal has been filed with the department of environmental protection as set forth in said Massachusetts Contingency Plan. (b) If the corporation ceases to maintain the remedy operation status or the permanent solution in violation of said Massachusetts Contingency Plan prior to the sale of the property or the termination of the lease, the difference between the credit taken and the credit allowed for maintaining the remedy shall be added back as additional taxes due in the year the corporation fails to maintain the remedy operation status or permanent solution. The amount of the credit allowed for maintaining the remedy shall be determined by multiplying the original credit by the ratio of the number of months the remedy was adequately maintained over the number of months of useful life of the property. For the purposes of this subsection, the useful life of the property shall be the same as that used by corporations for depreciation purposes when computing federal income tax liability; provided, however, that in the case of real property that is not depreciable, the useful life shall be deemed to be 12 months. (c) The credit allowed by this section shall be subject to the provisions of section 32C; provided, however, that the time period for carry over of the tax credit shall be as outlined in this section. (d) For the purposes of this section, net response and removal costs shall be expenses paid by the taxpayer for the purposes of achieving a permanent solution or remedy operation status in compliance with chapter 21E; provided, however that no credit shall be allowed under this section for the amount of state financial assistance received from the Redevelopment Access to Capital Program established pursuant to section 60 of chapter 23A, or from the Brownfields Redevelopment Fund, established pursuant to section 29A of chapter 23G of the General Laws. For the purpose of the redevelopment access to capital program, the amount of state financial assistance shall be calculated as the amount of state funds paid on behalf of the borrower for participation in the program, and not the amount of the loan guaranteed. In the event the loan guarantee is invoked, any credit taken for the amount of the loan shall be added back as taxes due in the year the loan is paid. (e) The credit allowed under this section shall not reduce the excise payable by said corporation to less than the amount due pursuant to subsection (b) of section 39 or any other applicable section. (f) Notwithstanding the provisions of any general or special law to the contrary, any corporation entitled to a credit under this subsection for any taxable year may carry over and apply to its tax liability for any subsequent taxable year, not to exceed 5 taxable years, the portion of those credits, as reduced from year to year, which were not allowed under this subparagraph; provided, however, that in no event shall the taxpayer apply the credit in any taxable year in which it has ceased to maintain the remedy operation status or the permanent solution for which the credit was granted. (g) All or any portion of tax credits issued in accordance with this section may be transferred, sold or assigned to a taxpayer with a liability under this chapter or chapter 62 or to a nonprofit organization. A corporation or nonprofit organization desiring to make a transfer, sale or assignment shall submit to the commissioner a statement which describes the amount of the Massachusetts environmental response action tax credit for which such transfer, sale or assignment of Massachusetts environmental response action tax credit is eligible. Such a corporation or nonprofit organization shall provide appropriate information so that the environmental response action tax credit can be properly allocated. The commissioner shall issue a certificate to the party receiving the environmental response tax credit reflecting the amount of tax credit received, a copy of which shall be attached by the party receiving the environmental response tax credit to each tax return in which the tax credits are used. (h) The commissioner shall annually, not later than September 1, file a report with the house and senate committees on ways and means, the joint committee on community development and small businesses and the joint committee on economic development and emerging technologies identifying the total amount of tax credits claimed pursuant to this section and the total amount of tax credits transferred, sold or assigned pursuant to this section in the preceding fiscal year.

M.G.L. c. 63, § 38QQ Credit for taxpayers with an eligible theater production certificate; use; assignment, transfer or conveyance

c. 63, § 38QQ. Credit for taxpayers with an eligible theater production certificate; use; assignment, transfer or conveyance [Text of section effective until January 1, 2030 for taxable years beginning on or after January 1, 2025. Repealed by 2024, 238, Sec. 315. See 2024, 238, Secs. 319 and 322.] Section 38QQ. (a) As used in this section, the following words shall, unless the context clearly requires otherwise, have the following meanings: ''Advertising and public relations expenditure'', a cost incurred within the commonwealth by an eligible theater production for goods or services related to the marketing, public relations, creation and placement of print, electronic, television, billboards or other forms of advertising to promote the eligible theater production. ''Eligible theater production'', a live stage musical, dance or theatrical production or tour being presented in a qualified production facility that is either: (i) a pre-Broadway production; (ii) a pre-off-Broadway production; (iii) a national tour launch; or (iv) a regional professional theater production. ''Eligible theater production certificate'', a certificate issued by the office, in consultation with the commissioner, certifying that a production is an eligible theater production that meets the rules or regulations of the office and that it has been awarded a tax credit in a specified amount, pursuant to section 3M of chapter 23A. ''National tour launch'', a live stage production that, in its original or adaptive version, is performed in a qualified production facility and opens its national tour in the commonwealth. ''Office'', the Massachusetts office of business development established in section 1 of chapter 23A, or any constituent office thereof. ''Payroll'', all salaries, wages, fees and other compensation from sources within the commonwealth, including, but not limited to, taxes, benefits and any other consideration incurred or paid to talent and non-talent employees of the applicant for services rendered within the commonwealth to and on behalf of an eligible theater production; provided, that the payroll expenditure shall be incurred or paid by the applicant for services related to any portion of an eligible theater production from its pre-production stages, including, but not limited to: (i) the writing of the script; (ii) casting; (iii) hiring of service providers; (iv) purchases from vendors; (v) marketing; (vi) advertising; (vii) public relations; (viii) load in; (ix) rehearsals; (x) performances; (xi) other eligible theater production related activities; and (xii) load out; and provided further, that the payroll expenditure shall be directly attributable to the eligible theater production and shall be limited to the first $100,000 of wages incurred or paid to each employee of an eligible theater production in each tax year. ''Pre-Broadway production'', a live stage production that, in its original or adaptive version, is performed in a qualified production facility having a presentation scheduled for the city of New York's Broadway theater district within 24 months after its presentation in the commonwealth. ''Pre-off-Broadway production'', a live stage production that, in its original or adaptive version, is performed in a qualified production facility having a presentation scheduled for the city of New York's off-Broadway theater district within 24 months after its presentation in the commonwealth. ''Production and performance expenditures'', a contemporaneous exchange of cash or cash equivalent for goods or services related to development, production, performance or operating expenditures incurred in the commonwealth for a qualified theater production, including, but not limited to, expenditures for design, construction and operation, including sets, special and visual effects, costumes, wardrobes, make-up, accessories, costs associated with sound, lighting, staging, advertising and public relations expenditures, facility expenses, rentals, per diems, accommodations and other related costs. ''Qualified production facility'', a facility located in the commonwealth in which live theater productions are, or are intended to be, exclusively presented that contains at least 1 stage, a seating capacity of not less than 175 seats, dressing rooms, storage areas and other ancillary amenities necessary for the eligible theater production. ''Regional professional theater production'', a live stage production that is performed in a qualified production facility with a professional cast and crew. ''Transportation expenditures'', expenses incurred in the commonwealth for the packaging, crating and transportation both to the commonwealth for use in a qualified theater production of sets, costumes or other tangible property constructed or manufactured outside the commonwealth, or from the commonwealth after use in a qualified theater production of sets, costumes or other tangible property constructed or manufactured in the commonwealth and the transportation of the cast and crew to and from the commonwealth; provided, that ''transportation expenditures'' shall include any portion performed in the commonwealth of the packaging, crating and transporting of property and equipment used for special and visual effects, sound, lighting and staging, costumes, wardrobes, make-up and related accessories and materials and any other performance or production-related property and equipment. (b) Any taxpayer that has been awarded an eligible theater production certificate and has completed a cost accounting pursuant to subsection (c) of section 3M of chapter 23A shall be allowed a tax credit against taxes imposed by this chapter. The credit shall not exceed $7,000,000 and shall be equal to: (i) 35 per cent of the total in-state payroll costs; (ii) 25 per cent of the production and performance expenditures; and (iii) 25 per cent of transportation expenditures. Additionally, the credit shall not exceed the amount of credit specified in the eligible theater production certificate. (c) The tax credit shall be allowed against the tax for the taxable period in which the credit is issued and any amount of the tax credit that exceeds the tax due for a taxable year may be carried forward for not more than 5 succeeding tax years. (d) If a taxpayer has not claimed the tax credits, in whole or part, a taxpayer eligible for the tax credits may assign, transfer or convey the tax credits, in whole or in part, by sale or otherwise to any individual or entity, and such assignee of the tax credits that have not claimed the tax credits, in whole or in part, may assign, transfer or convey the tax credits, in whole or in part, by sale or otherwise to any individual or entity. The assignee of the tax credits may use acquired credits to offset up to 100 per cent of the tax liabilities otherwise imposed pursuant to this chapter. The assignee may apply the tax credits against taxes imposed on the assignee for not more than 5 succeeding tax years from the date an eligible theater production certificate is first issued by the office. The assignor shall perfect the transfer by notifying the commissioner, in writing, within 30 calendar days following the effective date of the transfer and shall provide any information as may be required by the commissioner to administer and carry out this section. (e) Credits allowed to corporations that are included in a combined group within the meaning of section 32B may be shared with other corporations within such group that are also doing business in the commonwealth, to the extent those corporations are engaged in a unitary business. (f) Credits allowed to a company that is an S corporation, as defined in section 1361 of the Code, partnership or a limited liability company that is taxed as a partnership shall be passed through respectively to persons designated as partners, members or owners of such companies on a pro rata basis or pursuant to an executed agreement among such persons designated as S corporation shareholders, partners or members documenting an alternate distribution method without regard to their sharing of other tax or economic attributes of such entity. (g) The commissioner shall promulgate such rules and regulations necessary for the administration of this section.

M.G.L. c. 63, § 38R Massachusetts historic rehabilitation tax credit

c. 63, § 38R. Massachusetts historic rehabilitation tax credit Section 38R. (a) For purposes of this section, the following terms shall have the following meanings unless the context clearly requires otherwise: ''Certified rehabilitation'', the rehabilitation of a qualified historic structure that has been approved and certified by the chairman of the Massachusetts historical commission as being consistent with the standards established by the Secretary of the United States Department of the Interior for rehabilitation of historic properties. ''Qualified historic structure'', any building or structure, located within the commonwealth that is individually listed on the National Register of Historic Places or is a contributing building within a district that is listed on the National Register of Historic Places or which has been determined by the Massachusetts historical commission to be eligible for listing on the National Register of Historic Places, and which all or any portion of which is owned, in whole or in part, by the taxpayer. ''Qualified rehabilitation expenditure'', any amount properly chargeable to a capital account and described in section 47(c)(2)(A)(i) of the Code, as amended and in effect for the taxable year, incurred in connection with the certified rehabilitation of a qualified historic structure, but, the term shall not include personal property, personal use property or the cost of acquiring a building or interest thereon. ''Substantial rehabilitation'' and ''substantially rehabilitated'', the qualified rehabilitation expenditures of the building during the 24–month period selected by the taxpayer ending with or within the taxable year exceed 25 per cent of the taxpayer's adjusted basis in such building and its structural components as of the beginning of such period. In the case of any rehabilitation that may reasonably be expected to be completed in phases set forth in architectural plans and specifications completed before the rehabilitation begins, the applicable period referred to in this paragraph shall be 60 months. ''Taxpayer'', a corporation or other entity subject to an excise imposed by this chapter. (b)(1) There shall be a Massachusetts historic rehabilitation tax credit. [Clause (i) of paragraph (1) of subsection (b) effective for tax years beginning on or after January 1, 2024. See 2024, 150, Sec. 141.] (i) The commissioner, in consultation with the Massachusetts historical commission, shall authorize annually, for the period beginning January 1, 2006 and ending December 31, 2030, under this section together with section 6J of chapter 62, an amount not to exceed $110,000,000 per year. The Massachusetts historical commission shall determine the criteria for eligibility for the credit, the criteria to be set forth in regulations promulgated under this section; but, at least 25 per cent of the tax credits shall be allowed to projects that contain affordable housing whenever possible and consistent with the criteria; provided, however, that the Massachusetts historical commission shall ensure the award of tax credits pursuant to this section to allow a taxpayer that acquires a qualified historic structure to receive any tax credits for qualified rehabilitation expenditures previously awarded to the transferor of the qualified historic structure if: (A) the rehabilitation was not placed in service by the transferor; (B) no credit has been claimed by anyone other than the acquiring taxpayer as verified by the department of revenue to the commission; (C) the taxpayer completes the rehabilitation and obtains certification as provided in this section; and (D) the taxpayer conforms with all other requirements of this section; and provided further, that in the case of a multi-phase project, tax credits may be transferred for any phase that meets the criteria in subclauses (A) to (D), inclusive. (ii) A taxpayer that incurs qualified rehabilitation expenditures may be allowed a credit, to be computed as hereinafter provided, against the excise imposed by this chapter. The credit shall be equal to a percentage, not to exceed 20 per cent, of the qualified rehabilitation expenditures made by the taxpayer with respect to a qualified historic structure which has received final certification and has been placed in service as provided for in this section. The Massachusetts historical commission shall administer and determine eligibility for the Massachusetts historic rehabilitation tax credit and allocate the credit in accordance with this section; but, the Massachusetts historical commission may impose a fee for the processing of applications for the certification of any rehabilitation under this section. (2) The credit allowable under this section shall be allowed for the taxable year in which the substantially rehabilitated property is placed in service, that is, when occupancy of the entire structure or some identifiable portion of the structure is permitted. A taxpayer allowed a credit under this section for a taxable year may carry over and apply to the excise imposed by this chapter in any of the succeeding 5 taxable years, the portion, as reduced from year to year, of those credits which exceed the excise for the taxable year. (i) Credits allowed under this section which are provided to multiple owners of property shall be passed through to the persons designated as partners, members or owners, respectively, pro rata or pursuant to an executed agreement among the persons designated as partners, members or owners documenting an alternative distribution method without regard to their sharing of other tax or economic attributes of the entity. (ii) Taxpayers eligible for the Massachusetts historic rehabilitation tax credit may, with prior notice to and in accordance with regulations adopted by the commissioner, transfer the credits, in whole or in part, to an individual or entity, and the transferee shall be entitled to apply the credits against the excise with the same effect as if the transferee had incurred the qualified rehabilitation expenditures itself. The transferee shall use the credit in the year it is transferred. If the credit allowable for any taxable year exceeds the transferee's excise liability for that tax year, the transferee may carry forward and apply in any subsequent taxable year, the portion, as reduced from year to year, of those credits which exceed such excise for the taxable year; but the carryover period shall not exceed 5 taxable years after the close of the taxable year during which the qualified historic structure received final certification and was placed in service as provided for in this section. (iii) The credit allowed under this section shall not be subject to the limitations of section 32C; but, the credit allowed by this section shall not reduce the excise due under this chapter below the minimum excise provided by subsection (b) of section 32 and subsection (b) of section 39. (c)(1) A certified rehabilitation shall require: (i) an initial certification by the Massachusetts historical commission that the structure meets the definition of qualified historic structure; (ii) a second certification by the Massachusetts historical commission, to be issued prior to construction, certifying that if completed as proposed, the rehabilitation work will meet the standards required for a certified rehabilitation; and (iii) a final certification by the Massachusetts historical commission, issued when construction is completed, certifying that the work was completed as proposed and that the costs are consistent with the work completed. Such final certification shall be acceptable as proof that the expenditures related to such construction qualify as qualified rehabilitation expenditures for purposes of the credit allowed under this section. (2) A rehabilitation shall not be treated as complete before the date of the certification referred to in clause (iii) of paragraph (1). (d) A taxpayer who leases its property shall be treated as the owner thereof if the remaining term of the lease as of the date determined under regulations prescribed by the commissioner of revenue is not less than such minimum period as the regulations require. [There is no subsection (e).] (f) For any qualified historic structure, qualified rehabilitation expenditures shall be treated for purposes of this section as made: (i) on the date substantial rehabilitation is completed, or (ii) to the extent provided by the commissioner of revenue by regulation, when such expenditures are properly chargeable to a capital account. Regulations under this paragraph shall include a rule similar to the rule under section 50(a)(2) of the Internal Revenue Code, as amended and in effect for the taxable year, relating to recapture if property ceases to qualify for progress expenditures. (g)(1) If, before the end of the 5 year period beginning on the date on which the qualified historic structure received final certification and was placed in service, the taxpayer disposes of the taxpayer's interest in the structure, the taxpayer's tax for the taxable year in which the disposition occurs shall be increased by the recapture amount. A carry forward credit shall be adjusted by reason of the disposition. (2) For purposes of paragraph (1), the recapture amount shall equal the amount of the credit taken by the taxpayer, including any credit transferred by the taxpayer, minus the credit allowed for ownership, but not less than zero. The credit allowed for ownership shall be the product of the amount of credit allowed multiplied by a ratio, the numerator of which is the number of months the rehabilitated structure is owned by the taxpayer, and the denominator of which is 60. (h) For purposes of this section, if a credit is allowed under this section for any expenditure with respect to any property, the increase in the basis of such property which would, but for this paragraph, result from such expenditure shall be reduced by the amount of the credit so allowed. (i) The commissioner, in consultation with the Massachusetts historical commission, shall prescribe regulations necessary to carry out this section. (j) Except for unused credits carried forward pursuant to paragraph (2) of subsection (b) of section 6J of chapter 62 and paragraph (2) of subsection (b) of this section, a taxpayer shall not be eligible for any historic rehabilitation tax credits for more than 5 taxable years.

M.G.L. c. 63, § 38RR Refundable credit under climatetech tax incentive program; eligibility; use and refunds

c. 63, § 38RR. Refundable credit under climatetech tax incentive program; eligibility; use and refunds [Text of section effective for tax years beginning on or after January 1, 2024. See 2024, 238, Sec. 325.] Section 38RR. (a) As used in this section, the following words shall have the following meanings unless the context clearly requires otherwise: ''Capital investment'', expenses incurred for the site preparation and construction, repair, renovation, improvement or equipping of a building, structure or facility or other improvements to real property including, but not limited to, site-related utility and transportation infrastructure improvements. ''Center'', the Massachusetts clean energy technology center established in section 2 of chapter 23J. ''Certified climatetech company'', as defined in section 1 of chapter 23J. ''Climatetech facility'', a building, complex of buildings or structural components of buildings, including access infrastructure, and all machinery and equipment used in the research, manufacturing, assembly, development, provision or administration of goods or services in the climatetech sector. ''Owner'', a taxpayer subject to tax under this chapter that: (i) is a corporation that holds title to a climatetech facility; or (ii) ground leases the land underlying a climatetech facility for not less than 50 years. ''Tenant'', a taxpayer subject to tax under this chapter that is a lessee in a climatetech facility. (b) An owner or tenant, to the extent authorized by the climatetech tax incentive program established in section 16 of chapter 23J, may take a refundable credit against the taxes imposed by this chapter in an amount, as determined by the center, of not more than 50 per cent of the owner's total capital investment in a climatetech facility. The total amount of tax credit awarded pursuant to this section shall be distributed in equal parts over the 5 taxable years that correspond to the period in which the owner or tenant is certified pursuant to said section 16 of said chapter 23J. (c) An owner shall be eligible for a tax credit under this section if the owner demonstrates to the center that the: (i) owner is a certified climatetech company; (ii) owner's total capital investment in the climatetech facility equals not less than $5,000,000; and (iii) climatetech facility will employ not less than 50 new full-time employees by the fifth year of the owner's certification period under section 16 of chapter 23J. Upon verification, the center shall provide this information to the department of revenue for the purpose of administering the credit. (d) A tenant shall be eligible for a tax credit under this section if the tenant demonstrates to the center that the: (i) tenant is a certified climatetech company; (ii) owner's total capital investment in the facility equals not less than $5,000,000; (iii) tenant occupies a leased area of the climatetech facility that represents not less than 25 per cent of the total leasable square footage of the facility; and (iv) tenant shall employ not less than 13 full-time employees by the fifth year of the tenant's certification period under section 16 of chapter 23J. Upon verification, the center shall provide this information to the department of revenue for the purpose of administering the credit. The amount of tax credits awarded under this section to a tenant for a taxable year shall not exceed the tenant's total lease payments for occupancy of the climatetech facility for the taxable year. (e) The department of revenue shall issue the refundable portion of the credit without further appropriation and in accordance with the cumulative amount, including the current year costs of incentives allowed in previous years, which shall not exceed $30,000,000 annually as set forth in subsection (d) of section 16 of chapter 23J. (f) The department of revenue shall promulgate such rules and regulations as necessary to administer the credit established in this section.

M.G.L. c. 63, § 38S Automatic sprinkler system; depreciation deduction

c. 63, § 38S. Automatic sprinkler system; depreciation deduction Section 38S. (a) In determining the net income subject to tax under this chapter, a business corporation required to comply with section 26G1/2 of chapter 148 and that has so complied, may, for the purposes of the depreciation deduction allowed under section 168 of the Federal Internal Revenue Code, classify an automatic sprinkler system having a situs in the commonwealth, and used exclusively in the trade or business of such corporation, as 5–year property as defined under 168(e)(3) of the Federal Internal Revenue Code. The term ''automatic sprinkler system'' means the system installed pursuant to section 26G1/2 of said chapter 148 and in accordance with the state building code. (b) Such depreciation deduction for the automatic sprinkler system shall be allowed only upon the condition that the net income for the taxable year and all succeeding taxable years be computed without any depreciation deduction upon the property other than the deduction allowed by this section.

M.G.L. c. 63, § 38SS Amount of credit for research and development costs under climatetech tax incentive program

c. 63, § 38SS. Amount of credit for research and development costs under climatetech tax incentive program [Text of section effective for tax years beginning on or after January 1, 2024. See 2024, 238, Sec. 325.] Section 38SS. (a) A taxpayer may, to the extent authorized pursuant to the climatetech tax incentive program established in section 16 of chapter 23J, be allowed a credit against its excise due under this chapter equal to the sum of 10 per cent of the excess, if any, of the qualified research expenses for the taxable year, over the base amount, and 15 per cent of the basic research payments determined pursuant to section 41(e)(1)(A) of the Internal Revenue Code; provided, that the terms ''qualified research expenses'', ''base amount'', ''qualified organization base period amount'', ''basic research'' and any other terms affecting the calculation of the credit shall have the same meanings as defined in said section 41 of said Code unless the context requires otherwise. In determining the amount of the credit allowable under this section, the commissioner of revenue may aggregate the activities of all corporations that are members of a controlled group of corporations, as defined by 41(f)(1)(A) of the Internal Revenue Code, and may aggregate the activities of all entities, whether or not incorporated, that are under common control as defined in section 41(f)(1)(B) of said Code. (b) For a qualified climatetech company, research and development costs, within the meaning of section 41 of said Code, shall include those qualified research expenditures that are performed both inside and outside the commonwealth. (c) For purposes of section 30, the deduction from gross income that may be taken with respect to any expenditures qualifying for a credit under said section 41 of the Internal Revenue Code shall be based upon its cost less the credit allowable under this section; provided, however, that section 280C(c) of said Code shall not apply. (d) The credit allowed hereunder for any taxable year shall not reduce the excise to less than the amount due under subsection (b) of section 39, section 67 or any other general or special law. (e) The credit allowed under this section shall be limited to 100 per cent of a corporation's first $25,000 of excise, as determined before the allowance of any credits, plus 75 per cent of the corporation's excise, as so determined in excess of $25,000. The commissioner of revenue shall promulgate regulations similar to those authorized under section 38(c)(2)(B) of the Internal Revenue Code for the purposes of apportioning the $25,000 amount among members of a controlled group. Nothing in this section shall alter section 32C as it affects other credits under this chapter. (f) If a corporation files a combined return of income under section 32B, a credit generated by an individual member corporation under this section shall first be applied against the excise attributable to that company under section 39, subject to the limitations of subsections (d) and (e). A member corporation with an excess research and development credit may apply its excess credit against the excise of another group member if such other member corporation may use additional credits under the limitations of said subsections (d) and (e). Unused and unexpired credits generated by a member corporation shall be carried over from year to year by the individual corporation that generated the credit and shall not be refundable. Nothing in this section shall alter subsection (h) of section 31A. (g) A corporation entitled to a credit under this section for a taxable year may carry over and apply to its excise for any of the next succeeding 15 taxable years that portion, as reduced from year to year, of its credit which exceeds its excise for the taxable year. A corporation may carry over and apply to its excise for any subsequent taxable year that portion, as reduced from year to year, of those credits which were not allowed under subsection (f). (h) The commissioner of revenue shall promulgate regulations necessary to carry out this section.

M.G.L. c. 63, § 38TT Refundable jobs credit under climatetech tax incentive program

c. 63, § 38TT. Refundable jobs credit under climatetech tax incentive program [Text of section effective for tax years beginning on or after January 1, 2024. See 2024, 238, Sec. 325.] Section 38TT. (a) A taxpayer, to the extent authorized by the climatetech tax incentive program established in subsection (d) of section 16 of chapter 23J, may be allowed a refundable jobs credit against the tax liability imposed under this chapter in an amount determined by the Massachusetts clean energy technology center established in section 2 of said chapter 23J, in consultation with the department of revenue. (b) A taxpayer taking a credit under this section shall commit to the creation of not less than 5 net new permanent full-time employees in the commonwealth. (c) A credit allowed under this section shall reduce the liability of the taxpayer under this chapter for the taxable year. If a credit claimed under this section by a taxpayer exceeds the taxpayer's liability as otherwise determined under this chapter for the taxable year, 90 per cent of such excess credit, to the extent authorized by the climatetech tax incentive program, shall be refundable to the taxpayer. Excess credit amounts shall not be carried forward to other taxable years. (d) The department of revenue shall issue the refundable portion of the jobs credit without further appropriation and in accordance with the cumulative amount, including the current year costs of incentives allowed in previous years, which shall not exceed $30,000,000 annually as set forth in subsection (d) of section 16 of chapter 23J.

M.G.L. c. 63, § 38U Credit for cost of qualifying property; life sciences

c. 63, § 38U. Credit for cost of qualifying property; life sciences [Text of section effective until December 31, 2028. Repealed by 2008, 130, Sec. 31. See 2008, 130, Sec. 54 as amended by 2011, 9, Sec. 25; 2013, 46, Sec. 57; and 2018, 112, Sec. 10. See also 2011, 9, Sec. 56 and 2013, 46, Sec. 87 as amended by 2018, 273, Sec. 26.] Section 38U. (a) As used in this section, section 38V and section 38W, the following words shall, unless the context clearly requires otherwise, have the following meanings:— ''Life sciences'', advanced and applied sciences that expand the understanding of human physiology and have the potential to lead to medical advances or therapeutic applications, including, but not limited to, agricultural biotechnology, biogenerics, bioinformatics, biomedical engineering, biopharmaceuticals, biotechnology, biosecurity, life sciences related artificial intelligence, chemical synthesis, chemistry technology, diagnostics, genomics, image analysis, marine biology, marine technology, medical technology, medical devices, nanotechnology, natural product pharmaceuticals, proteomics, regenerative and preventative medicine, RNA interference, stem cell research and veterinary science. ''Person'', a natural person, corporation, association, partnership or other legal entity. ''Taxpayer'', a life sciences company or person subject to the taxes imposed by this chapter or chapter 62, 64H or 64I. (b) A taxpayer may, to the extent authorized pursuant to the life sciences tax incentive program established by section 5 of chapter 23I, take a credit against the taxes imposed by this chapter in an amount equal to 10 per cent of the cost of qualifying property acquired, constructed, reconstructed or erected during the taxable year and used exclusively in the commonwealth. Qualifying property shall be tangible personal property and other tangible property including buildings and structural components of buildings acquired by purchase, as defined under section 179(d) of the Code, as amended, and in effect for the taxable year, but not including property that is taxable under chapter 60A; provided, however, that such property shall be depreciable under section 167 of the Code and shall have a useful life of 4 years or more. With respect to property which is disposed of or ceases to be in qualified use prior to the end of the taxable year in which the credit is to be taken, the amount of the credit shall be that portion of the credit provided for in this paragraph which represents the ratio which the months of qualified use bear to the months of useful life. If property on which credit has been taken is disposed of or ceases to be in qualified use prior to the end of its useful life, the difference between the credit taken and the credit allowed for actual use must be added back as additional taxes due in the year of disposition; provided, however, if such property is disposed of or ceases to be in qualified use after it has been in qualified use for more than twelve consecutive years, it shall not be necessary to add back the credit, as provided in this paragraph. The amount of credit allowed for actual use shall be determined by multiplying the original credit by the ratio which the months of qualified use bear to the months of useful life. For the purposes of this paragraph, useful life of property shall be the same as that used by the corporation for depreciation purposes when computing federal income tax liability. The credit allowed under this section may be taken by an eligible corporation; provided, however, that neither credit allowed by section 31A nor section 31H is taken by such corporation; and provided, further, that the credit allowed by section 38N shall not be taken except to such extent, not to exceed 2 per cent of the cost of any qualifying property. Nothing in this section shall limit the authority of the commissioner to make adjustments to a taxpayer's liability upon audit or limit any other legal remedies available to the commissioner or the commonwealth against said taxpayer. (c) The credit allowed by this section shall not be subject to section 32C. (d) If a taxpayer that is subject to a minimum excise under this chapter, the amount of the credit allowed by this section shall not reduce the excise to an amount less than such minimum excise. (e) A taxpayer entitled to a credit under this section for any taxable year may, to the extent authorized pursuant to the life sciences tax incentive program established by section 5 of chapter 23I, carry over and apply to its excise for any 1 or more of the next succeeding 10 taxable years, the portion, as reduced from year to year, of those credits which were not allowed by subsection (c) or which exceed the excise for the taxable year. (f) For corporations filing a combined return of income under section 32B, a credit generated by an individual member corporation under this section shall first be applied against the separately determined excise attributable to that member, subject to the limitations of subsection (d). A member corporation with an excess credit may apply its excess credit against the excise of another group member, to the extent that such other member corporation may use additional credits under the limitation of paragraph (d). Unused, unexpired credits generated by member corporations shall be carried over from year to year by the individual corporation that generated the credit. (g) The commissioner shall promulgate regulations necessary to implement this section. Said regulations may provide for the adjustment of intercompany prices and elimination of intercompany transactions to ensure that all amounts upon which the credit is based reasonably reflect fair market value and shall include provisions to prevent the generation of multiple credits with respect to the same property. (h) If a credit allowed to a taxpayer under this section, or such credit as may be allowed under section 38N of this chapter as limited in this subsection, exceeds the excise otherwise due under this chapter, 90 per cent of the balance of such credit may, at the option of the taxpayer and to the extent authorized pursuant to the life sciences tax incentive program established by section 5 of chapter 23I, be refundable to the taxpayer for the taxable year in which qualified property giving rise to that credit is placed in service. If such credit balance is refunded to the taxpayer, the credit carryover provisions of subsection (e) and said section 38N shall not apply.

M.G.L. c. 63, § 38UU Credit for wages paid to net-new qualified interns

c. 63, § 38UU. Credit for wages paid to net-new qualified interns [Text of section effective as provided by 2024, 238, Sec. 320. Repealed by 2024, 238, Sec. 316 effective upon satisfaction of the terms set out in 2024, 238, Sec. 324.] Section 38UU. (a) A business corporation engaged in business in the commonwealth may be allowed a credit each taxable year against the liability imposed by this chapter in an amount equal to $5,000 or 50 per cent of the wages paid to each net-new qualified intern employed in the taxable year, whichever is less. If a credit allowed pursuant to this section exceeds the tax otherwise due under this chapter, 100 per cent of the balance of such credit may, at the option of the taxpayer, be refunded to the taxpayer. (b) For an employer to be eligible for a credit under this section: (i) the intern shall be enrolled in or a recent graduate of a public or private institution of higher education located in the commonwealth; (ii) the intern shall have been employed as a qualified intern by the employer for not less than 12 weeks in the taxable year for which the credit is claimed; and (iii) the employer shall demonstrate that the total number of interns employed in the taxable year exceeds the average number of interns employed by the taxpayer per year over the previous 3 years. An intern shall not be qualified if the intern is participating in another internship or apprenticeship program for which an employer has claimed a credit in the taxable year under this chapter or subsection (ii) of section 6 of chapter 62. (c) The total cumulative value of the credits authorized pursuant to this section and subsection (ii) of section 6 of chapter 62 shall not exceed $10,000,000 annually. An employer shall not claim more than $100,000 in credits under this section for any taxable year. A credit allowed under this section shall not be transferable. (d) The executive office of economic development, in consultation with the commissioner, shall authorize, administer and determine eligibility for the tax credit pursuant to this section and subsection (ii) of section 6 chapter 62 and shall allocate the credit in accordance with the standards and requirements set forth in regulations promulgated pursuant to this section. The secretary of economic development, in consultation with the commissioner, shall promulgate regulations establishing an application process for the credit. (e) The secretary of economic development shall annually file a report with the house and senate committees on ways and means, the joint committee on economic development and emerging technologies and the joint committee on labor and workforce development identifying the following: (i) total amount of tax credits claimed pursuant to this section and subsection (ii) of section 6 of chapter 62; (ii) the number of participating interns; and (iii) the number of participating employers. In the fourth submission of said annual report, the secretary of economic development shall provide an assessment of the effectiveness of the credit offered under this section and subsection (ii) of section 6 of chapter 62 in achieving the goal of retaining graduating talent in the commonwealth. Notwithstanding section 21 of chapter 62C, the department of revenue may provide to the secretary of economic development de-identified, statistical tax return information related to the tax filings of former participating interns for the 5 tax years beginning after the conclusion of the internship to evaluate whether former interns are employed and domiciled in the commonwealth after the internship; provided, that such information shall be shared in a manner that prevents the identification of particular tax returns.

M.G.L. c. 63, § 38V Deductions for qualifying clinical testing expenses; certified life sciences company

c. 63, § 38V. Deductions for qualifying clinical testing expenses; certified life sciences company [Text of section effective until December 31, 2028. Repealed by 2008, 130, Sec. 31. See 2008, 130, Sec. 54 as amended by 2011, 9, Sec. 25; 2013, 46, Sec. 57; and 2018, 112, Sec. 10. See also 2011, 9, Sec. 56 and 2013, 46, Sec. 87 as amended by 2018, 273, Sec. 26.] Section 38V. A taxpayer which is a certified life sciences company pursuant to section 5 of chapter 23I may, to the extent authorized pursuant to the life sciences tax incentive program established by said section 5 of chapter 23I, be allowed a deduction under paragraph 4 of section 30 for that portion of qualified clinical testing expenses paid or incurred for the taxable year equal to the amount of the credit allowable for the taxable year under section 45C of the Internal Revenue Code and otherwise disallowed as a deduction under section 280C(b) of said Code.

M.G.L. c. 63, § 38W Credit for qualified research expenses; life sciences

c. 63, § 38W. Credit for qualified research expenses; life sciences [Text of section effective until December 31, 2028. Repealed by 2008, 130, Sec. 31. See 2008, 130, Sec. 54 as amended by 2011, 9, Sec. 25; 2013, 46, Sec. 57; and 2018, 112, Sec. 10. See also 2011, 9, Sec. 56 and 2013, 46, Sec. 87 as amended by 2018, 273, Sec. 26.] Section 38W. (a) A taxpayer may, to the extent authorized pursuant to the life sciences tax incentive program established by section 5 of chapter 23I, be allowed a credit against its excise due under this chapter equal to the sum of 10 per cent of the excess, if any, of the qualified research expenses for the taxable year, over the base amount, and 15 per cent of the basic research payments determined pursuant to section 41(e)(1)(A) of the Internal Revenue Code. The terms ''qualified research expenses'', ''base amount'', ''qualified organization base period amount'', ''basic research'' and any other terms affecting the calculation of the credit shall, unless the context otherwise requires or unless otherwise stated in this section, have the same meanings as under said section 41 of said Code. In determining the amount of the credit allowable under this section, the commissioner of revenue may aggregate the activities of all corporations that are members of a controlled group of corporations, as defined by 41(f)(1)(A) of said Code, and may aggregate the activities of all entities, whether or not incorporated, that are under common control, as defined in section 41(f)(1)(B) of said Code. (b) For a qualified life science company, research and development costs, within the meaning of section 41 of said Code, shall include, to the extent they relate to legally mandated clinical trial activities, those qualified research expenditures that are performed both inside and outside of the commonwealth. (c) For purposes of section 30, the deduction from gross income that may be taken with respect to any expenditures qualifying for a credit under said section 41 of said Code shall be based upon its cost less the credit allowable under this section; provided, however, that section 280C(c) of said Code shall not apply. (d) The credit allowed hereunder for any taxable year shall not reduce the excise to less than the amount due under subsection (b) of section 32, subsection (b) of section 39, section 67 or under any other general or special law. (e) The credit allowed under this section shall be limited to 100 per cent of a corporation's first $25,000 of excise, as determined before the allowance of any credits, plus 75 per cent of the corporation's excise, as so determined in excess of $25,000. The commissioner of revenue shall promulgate regulations similar to those authorized under section 38(c)(2)(B) of the Internal Revenue Code for purposes of apportioning the $25,000 amount among members of a controlled group. Nothing in this section shall alter section 32C, as it affects other credits under this chapter. (f) If a corporation files a combined return of income under section 32B, a credit generated by an individual member corporation under this section shall first be applied against the excise attributable to that company under sections 32 or 39, subject to the limitations of subsections (d) and (e). A member corporation with an excess research and development credit may apply its excess credit against the excise of another group member if such other member corporation may use additional credits under the limitations of said subsections (d) and (e). Unused, unexpired credits generated by a member corporation shall be carried over from year to year by the individual corporation that generated the credit and shall not be refundable. Nothing in this section shall alter subsection (h) of section 31A. (g) A corporation entitled to a credit under this section for any taxable year may carry over and apply to its excise for any of the next succeeding 15 taxable years that portion, as reduced from year to year, of its credit which exceeds its excise for the taxable year. A corporation may carry over and apply to its excise for any subsequent taxable year that portion, as reduced from year to year, of those credits which were not allowed by subsection (f). (h) The commissioner of revenue shall promulgate regulations necessary to carry out this section.

M.G.L. c. 63, § 38X Credit against taxes imposed on persons filming motion picture for employment of persons within commonwealth in connection with filming or production

c. 63, § 38X. Credit against taxes imposed on persons filming motion picture for employment of persons within commonwealth in connection with filming or production Section 38X. (a) As used in this section the following words shall, unless the context clearly requires otherwise, have the following meanings:— ''Commissioner'', the commissioner of revenue. ''Motion picture'', a feature-length film, a video, a digital media project, a television series defined as a season not to exceed 27 episodes, or a commercial made in the commonwealth, in whole or in part, for theatrical or television viewing or as a television pilot. The term '' motion picture'' shall not include a production featuring news, current events, weather and financial market reports, talk show, game show, sporting events, awards show or other gala event, a production whose sole purpose is fundraising, a long-form production that primarily markets a product or service, a production containing obscene material or performances. ''Motion picture production company'', a company including its subsidiaries engaged in the business of producing motion pictures, videos, television series, or commercials intended for a theatrical release or for television viewing. The term ''motion picture production company'' shall not mean or include any company which is more than 25 per cent owned, affiliated, or controlled, by any company or person which is in default on a loan made by the commonwealth or a loan guaranteed by the commonwealth. ''Massachusetts production expense'', a production expense for the motion picture clearly and demonstrably incurred in the commonwealth. ''Principal photography'', the phase of production during which the motion picture is actually filmed. The term shall not include preproduction or postproduction. ''Production expense'' or ''production cost'', preproduction, production and postproduction expenditures directly incurred in the production of a motion picture. The term shall include wages and salaries paid to individuals employed in the production of the motion picture; the costs of set construction and operation, editing and related services, photography, sound synchronization, lighting, wardrobe, make-up and accessories; film processing, transfer, sound mixing, special and visual effects; music; location fees and the cost of purchase or rental of facilities and equipment or any other production expense as may be determined by the department of revenue to be an eligible production expense. The term shall not include costs incurred in marketing or advertising a motion picture, any costs related to the transfer of tax credits or any amounts paid to persons or businesses as a result of their participation in profits from the exploitation of the production. ''Secretary'', the secretary of economic development. (b) A taxpayer engaged in the making of a motion picture shall be allowed a credit against the taxes imposed by this chapter for the employment of persons within the commonwealth in connection with the filming or production of 1 or more motion pictures in the commonwealth within any consecutive 12 month period. The credit shall be equal to 25 per cent of the total aggregate payroll paid by a motion picture production company that constitutes Massachusetts source income, when total production costs incurred in the commonwealth equal or exceed $50,000 during the taxable year. For purposes of this subsection, the term ''total aggregate payroll'' shall not include the salary of any employee whose salary is equal to or greater than $1,000,000. [Subsection (c) effective for tax years beginning on or after January 1, 2022. See 2021, 24, Sec. 147.] (c) A taxpayer shall be allowed an additional credit against the taxes imposed by this chapter equal to 25 per cent of all Massachusetts production expenses, not including the payroll expenses used to claim a credit pursuant to subsection (b), where the motion picture is also eligible for a credit pursuant to subsection (b) and either Massachusetts production expenses exceed 75 per cent of the total production expenses for a motion picture or at least 75 per cent of the total principal photography days of the film take place in the commonwealth. (d) The tax credit shall be taken against the taxes imposed under this chapter and shall, at the election of the taxpayer, be refundable to the extent provided for in section 32E. Any amount of the tax credit that exceeds the tax due for a taxable year may be carried forward by the taxpayer to any of the 5 subsequent taxable years. (e)(1) All or any portion of tax credits issued in accordance with the provisions of this section may be transferred, sold or assigned to other taxpayers with tax liabilities under this chapter or chapter 62. Any tax credit that is transferred, sold or assigned and taken against taxes imposed by this chapter or said chapter 62 shall not be refundable. Any amount of the tax credit that exceeds the tax due for a taxable year may be carried forward by the transferee, buyer or assignee to any of the 5 subsequent taxable years from which a certificate is initially issued by the department of revenue. (2) An owner, transferee or assignee desiring to make a transfer, sale or assignment shall submit to the commissioner a statement which describes the amount of tax credit for which the transfer, sale or assignment of tax credit is eligible. The owner, transferee or assignee shall provide to the commissioner such information as the commissioner may require for the proper allocation of the credit. The commissioner shall provide to the taxpayer a certificate of eligibility to transfer, sell or assign the tax credits. The commissioner shall not issue a certificate to a taxpayer that has an outstanding tax obligation with the commonwealth in connection with any motion picture for any prior taxable year. A tax credit shall not be transferred, sold or assigned without a certificate. (f) The commissioner, in consultation with the secretary, shall promulgate regulations necessary for the administration of this subsection. (g) Notwithstanding any other provision of this section, aggregate salary and compensation amounts including all per diems, housing and other allowances, paid to, or for the services of, an individual shall not qualify for the credit under this section or for the credit under subsection (l) of section 6 of chapter 62 to the extent that such amounts exceed $2,000,000.

M.G.L. c. 63, § 38Y Unrelated business taxable income for certain exempt corporations

c. 63, § 38Y. Unrelated business taxable income for certain exempt corporations Section 38Y. (a) Every business corporation which is exempt from taxation under section 501 of the Code shall be subject to tax under section 39 on its unrelated business taxable income, as defined in section 512 of the Code. The property or net worth of those corporations shall not be subject to tax under this chapter, and the minimum excise under section 39 shall not apply. If a corporation has unrelated business taxable income that is taxable both within and without the commonwealth, it may apportion its net income to the commonwealth under section 38, but its apportionment factors shall be determined by reference only to the unrelated business activity of the corporation. The credits allowed under this chapter shall be determined only with respect to the unrelated business activity of the corporation. (b) An entity that is exempt from taxation under section 501 of the Code shall not be considered to be a business corporation for purposes of chapter 59.

M.G.L. c. 63, § 38Z Dairy farm tax credit program

c. 63, § 38Z. Dairy farm tax credit program Section 38Z. (a) There shall be established a dairy farm tax credit program under which a business corporation that holds a certificate of registration as a dairy farm pursuant to section 16A of chapter 94 may be allowed a refundable income tax credit based on the amount of milk produced and sold. The credit may be claimed against the taxes due pursuant to this chapter. The credit shall be established to offset the cyclical downturns in milk prices paid to dairy farmers and shall be based on the United States Federal Milk Marketing Order for the applicable market such that if the United States Federal Milk Marketing Order price drops below a trigger price anytime during the taxable year such business corporation may receive the tax credit. (b) The commissioner of agricultural resources, in consultation with the commissioner of revenue, shall adopt regulations for the implementation, administration and enforcement of this section, including the establishment of the trigger price, which shall take into account the operating costs of milk production including hired labor and some portion of the value of unpaid labor, and the amount of the tax credit which shall be based upon volume of milk production. The regulations shall provide that when the board of food and agriculture, established pursuant to section 1 of chapter 20, determines that an error has been made in calculating the trigger price or in reporting or collecting data used in the calculation of the trigger price or the tax credit, the commissioner shall recalculate, with or without amendments, the trigger price or tax credit. [Subsection (c) effective for taxable years beginning on or after January 1, 2023. See 2023, 50 Sec. 49.] (c) The total cumulative value of the tax credits authorized pursuant to this section and subsection (o) of section 6 of chapter 62 shall not exceed $8,000,000 annually. (d) If the amount of the credit allowed under this section exceeds the taxpayer's liability, the commissioner of revenue shall treat such excess as an overpayment and shall pay the taxpayer 100 per cent of the amount of such excess, without interest. The commissioner of agricultural resources shall certify to the department of revenue whether a dairy farm claiming credits under this section has met the eligibility requirements provided in this section and the amount of credit to which any such eligible applicant is entitled.

M.G.L. c. 63, § 39 Tax rate

c. 63, § 39. Tax rate Section 39. Except as otherwise provided in this section, every business corporation, organized under the laws of the commonwealth, or exercising its charter or other means of legal authority, or qualified to do business or actually doing business in the commonwealth, or owning or using any part or all of its capital, plant or any other property in the commonwealth, shall pay, on account of each taxable year, the excise provided in subsection (a) or (b), whichever is greater, except that an insurance mutual holding company established under chapter 175 or under the equivalent law of another state shall pay, on account of each taxable year, only the excise provided in clause (2) of subsection (a) or subsection (b), whichever is greater. Without limitation, the excise levied in this section is due and payable on any 1 or all of the following alternative incidents:— (1) The authority or qualification to carry on or do business in this state or the actual doing of business within the commonwealth. The term ''doing business'' as used herein shall mean and include each and every act, power, right, privilege, or immunity exercised or enjoyed in the commonwealth, as an incident to or by virtue of the powers and privileges acquired by the nature of those organizations, as well as, the buying, selling or procuring of services or property. (2) The exercising or continuance of a business corporation's charter or other means of legal authority within the commonwealth. (3) The owning or using any part or all of its capital, plant or other property in the commonwealth. It is the purpose of this section to require the payment of this excise to the commonwealth by a business corporation for the enjoyment under the protection of the laws of the commonwealth, of the powers, rights, privileges and immunities derived by reason of its existence and operation. In the case of a business corporation whose taxable year is a period of less than 12 calendar months, the portion of the amount determined under clause (1) of subsection (a) shall be multiplied by a fraction whose numerator is the number of months included in the taxable year and whose denominator is 12. (a) An amount equal to the sum of:— (1) $2.60 per 1,000 upon the value of: (i) its tangible property as determined to be taxable under paragraph 7 of section 30 if a tangible property corporation; or (ii) its net worth as determined to be taxable under paragraph 8 of section 30 if an intangible property corporation; and (2)(i) For tax years beginning before January 1, 2010, 9.5 per cent of its net income determined to be taxable in accordance with this chapter; (ii) for tax years beginning on or after January 1, 2010, but before January 1, 2011, 8.75 per cent of its net income determined to be taxable in accordance with this chapter; (iii) for tax years beginning on or after January 1, 2011, but before January 1, 2012, 8.25 per cent of its net income determined to be taxable in accordance with this chapter; or (iv) for tax years beginning on or after January 1, 2012, 8.0 per cent of its net income determined to be taxable in accordance with this chapter. (b) $456. A business corporation shall not be subject to the income measure of tax under clause (2) of subsection (a) if it is engaged in the business of selling tangible personal property and taxation of that business corporation under this chapter is precluded by the constitution or laws of the United States, or would be so precluded except for the fact that the business corporation stored tangible personal property in a licensed public storage warehouse, but no portion of any warehouse which is owned or leased by a consignor or consignee of the tangible personal property shall be considered a licensed public warehouse. A business corporation exempt from the income measure of the excise under this paragraph pursuant to federal Public Law 86–272 shall be subject to the excise under clause (1) of subsection (a) or subsection (b), whichever is greater.

M.G.L. c. 63, § 39A Tax on business subsidiary corporation

c. 63, § 39A. Tax on business subsidiary corporation Section 39A. The net income of a business corporation which is a subsidiary or parent corporation of another corporation or closely affiliated therewith by stock ownership shall be determined by eliminating all payments to the parent corporation or subsidiary or affiliated corporations in excess of fair value, and by including fair compensation to such business corporation for all commodities sold to or services performed for the parent corporation or subsidiary or affiliated corporations. For the purposes of determining such net income, the commissioner may, in the absence of satisfactory evidence to the contrary, presume that an apportionment by reasonable rules of the consolidated net income of corporations participating in the filing of a consolidated return of net income to the federal government fairly reflects the net income taxable under this chapter, or may otherwise equitably determine such net income by reasonable rules of apportionment of the combined income of the subsidiary, its parent and affiliates or any thereof. If, in the opinion of the commissioner, the capital of a business corporation, which is a subsidiary or parent corporation of another corporation or closely affiliated therewith by stock ownership, is inadequate for its business needs apart from credit extended or indebtedness guaranteed by the parent or subsidiary or an affiliated corporation, the commissioner shall, in determining net worth under paragraph 8 or 9 of section thirty, determine the value of its net worth properly taxable thereunder and consider such value the taxable net worth, disregarding its indebtedness owed or guaranteed by the parent or subsidiary or an affiliated corporation. Such a corporation shall incorporate in its tax return required under section eleven of chapter sixty-two C such information as the commissioner may reasonably require for determination of the excise pursuant to the provisions of this section, and failure to so incorporate such information shall subject the corporation and its officers to the penalties provided by section seventy-four of chapter sixty-two C. This section shall be broadly construed to include the situation in which the corporations referenced transact with one another through persons or entities that are not corporations within the meaning of this chapter.

M.G.L. c. 63, § 42 Alternative method of determining net income

c. 63, § 42. Alternative method of determining net income Section 42. If the allocation and apportionment provisions of this chapter are not reasonably adapted to approximate the net income derived from business carried on within this commonwealth, a corporation may apply to the commissioner to have its income derived from business carried on within this commonwealth determined by a method other than that set forth in section thirty-eight. Such application shall be made by attaching to its duly-filed return a statement of the reasons why the corporation believes that the allocation and apportionment provisions of this chapter are not reasonably adapted to approximate its net income derived from business carried on within this commonwealth and a description of the method of allocation sought by it. A corporation which so applies shall, upon receipt of a request therefor from the commissioner, file with the commissioner, under oath of its treasurer, a statement of such additional information as the commissioner may require. If, in the judgment of the commissioner the allocation and apportionment provisions of this chapter are not reasonably adapted to approximate the corporation's net income derived from business carried on within this commonwealth, the commissioner shall by reasonable methods determine the amount of net income derived from business activity carried on within this commonwealth. The amount thus determined shall be the net income taxable under this chapter and the foregoing determination shall be in lieu of the determination required by section thirty-eight. If an alternative method is used by the commissioner hereunder, the commissioner, in his discretion, with respect to the two next succeeding taxable years, may require similar information from such corporation if it shall appear that the allocation and apportionment provisions of this chapter are not reasonably adapted to approximate for the applicable year the corporation's net income derived from business carried on within this commonwealth and may by reasonable methods determine such income in the same manner as if the corporation had applied to have its income so determined.

M.G.L. c. 63, § 42A Taxable net income

c. 63, § 42A. Taxable net income Section 42A. The taxable net income of a business corporation allocated or apportioned to this commonwealth under section 38 shall be its net income subject to the tax under this chapter.

M.G.L. c. 63, § 42B Manufacturing and research and development corporations

c. 63, § 42B. Manufacturing and research and development corporations Section 42B. (a) Every business corporation subject to taxation under section 39 that has a usual place of business in the commonwealth, and is engaged in manufacturing in the commonwealth, or engaged in the commonwealth in research and development shall, for the purposes of this chapter, be considered to be a manufacturing corporation or a research and development corporation. Every manufacturing corporation shall be taxed in the same manner and shall have the same duties under this chapter and chapter 62C as other business corporations subject to taxation under section 39, except insofar as the determination of the excise under this chapter may be affected by reason of the exemption from local taxation of the machinery of a manufacturing corporation. (b) A research and development corporation for the purposes of this section is a business corporation subject to tax under section 39 whose principal activity herein is research and development and which, during the taxable year, derives more than 2/3 of its receipts attributable to the commonwealth from the activity or incurs more than 2/3 of its expenditures attributable to the commonwealth allocable to the activity, but a corporation that qualifies as a research and development corporation only by reason of its expenditures shall not be entitled to the credit provided in section 31A of chapter 63 by virtue of its qualification as a research and development corporation. A corporation that is engaged in research and development and that conducts manufacturing activities shall exclude expenditures related to manufacturing from total expenditures for the purpose of assessing whether 2/3 of expenditures are allocable to research and development, whether or not the manufacturing activities of the corporation are substantial. Receipts from research and development shall include receipts from the provision of research and development services and from royalties or fees derived from the licensing of patents, know-how or other technology developed from research and development. For purposes of this section, research and development is experimental or laboratory activity having as its ultimate goal the development of new products, the improvement of existing products, the development of new uses for existing products, or the development or improvement of methods for producing products; and does not include testing or inspection for quality control purposes, efficiency surveys, management studies, consumer surveys or other market research, advertising or promotional activities, or research in connection with literacy, historical or similar projects. Nothing in this section shall be construed to provide for an exemption from local taxation of the machinery of a corporation considered to be a research and development corporation which is not considered to be a manufacturing corporation. (c) For purposes of this section and section 38, the development and sale of standardized computer software shall be considered a manufacturing activity, without regard to the manner of delivery of the software to the customer. [Second paragraph of subsection (c) effective until December 31, 2028. Repealed by 2008, 130, Sec. 33. See 2008, 130, Sec. 54 as amended by 2011, 9, Sec. 25; 2013, 46, Sec. 57; and 2018, 112, Sec. 10. See also 2011, 9, Sec. 56 and 2013, 46, Sec. 87 as amended by 2018, 273, Sec. 26.] To the extent authorized pursuant to the life sciences tax incentive program established by section 5 of chapter 23I or the climatetech tax incentive program established in section 16 of chapter 23J, a certified company may be deemed a research and development corporation for purposes of exemptions under chapters 64H and 64I. (d) For the purposes of this section, a limited partnership that is not a business corporation but that would otherwise qualify as a research and development corporation under this section may be considered a research and development corporation when all partners are corporations solely for purposes of claiming the exemptions available to research and development corporations under chapters 64H and 64I. [Subsection (e) effective for tax years beginning on or after January 1, 2023. See 2023, 50 Secs. 47 and 49.] (e) For the purposes of this section, a ''manufacturing corporation'' shall be a corporation that is engaged in manufacturing; provided, however, that in order to be engaged in manufacturing, the corporation shall be engaged, in substantial part, in transforming raw or finished physical materials by hand or machinery, and through human skill and knowledge, into a new product possessing a new name, nature and adapted to a new use. Any operation manufacturing, in substantial part, value-added agricultural products shall be considered a manufacturing corporation. A manufacturing corporation's activities will be considered to be substantial if any 1 of the following 5 tests are met: (1) 25 per cent or more of its gross receipts are derived from the sale of manufactured goods that it manufactures; (2) 25 per cent or more of its payroll is paid to employees working in its manufacturing operations and 15 per cent or more of its gross receipts are derived from the sale of manufactured goods that it manufactures; (3) 25 per cent or more of its tangible property is used in its manufacturing operations and 15 per cent or more of its gross receipts are derived from the sale of manufactured goods that it manufactures; (4) 35 per cent or more of its tangible property is used in its manufacturing operations; or (5) the corporation's manufacturing activities are deemed substantial under relevant regulations promulgated by the commissioner. In determining whether a process constitutes manufacturing, the commissioner will examine the facts and circumstances of each case. For the purposes of this section, ''value–added agricultural products'' shall mean any products of farming or agriculture, as defined in section 1A of chapter 128, which have increased in market value due to some process other than packaging. Value-added agricultural products shall include, but shall not be limited to: cheese, butter, buttermilk, yogurt, cream, ice cream, fruit preserves, fruit juices, fruit sauces, fruit syrups, dried fruit, seeded fruits, peeled or chopped fruit and vegetables, processed fruit and vegetables, salads, maple syrup, maple candy, honey and all apicultural products, horticulture nursery and greenhouse products, topiary plants, bacon, sausage, lard, dried or smoked meat, wool and fish, seafood and other aquatic products.

M.G.L. c. 63, § 52 Unconstitutionality of excise tax law; effect; revival of former act

c. 63, § 52. Unconstitutionality of excise tax law; effect; revival of former act Section 52. If any of the provisions of this chapter imposing an excise on business corporations as defined in subsection (1) of section 30 are declared unconstitutional or inoperative by a final judgment, order or decree of the supreme court of the United States or of the supreme judicial court of the commonwealth, the portion of those provisions that was found to be unconstitutional or inoperative shall be null and void and shall become inapplicable to those corporations. In this event, the provisions of law, whether under this chapter or chapter 62, that (a) were applicable to those business corporations immediately before the enactment of the provision found to be unconstitutional or inoperative and (b) became inoperative or inapplicable in connection with the enactment of the provision found to be unconstitutional or inoperative, shall thereupon be revived and become operative and applicable in respect to those business corporations and shall be continued in full force and effect from the first day of January preceding by 6 years the first day of January of the calendar year in which the final judgment, order or decree is entered, to the same extent as if the provision found to be unconstitutional or inoperative had not been enacted. The commissioner and the local assessors shall as soon as may be assess all taxes for which liability has been incurred under the laws revived, made operative or applicable or continued in force by the foregoing provisions or any of them. The time for assessing such taxes shall be extended for a period of one year from the date of entry of such final judgment, order or decree and, for performing any duty subsequent to assessment, the time shall be extended for a further period after such assessment commensurate with the period which would have obtained under the laws hereby revived and again made operative, applicable and continued in force. Privileges and rights granted shall be correspondingly extended. Excises declared invalid by reason of the foregoing premises, which were assessed on or after the date when predecessor laws are revived, made operative or applicable or continued in force as provided in this section, shall, to the extent that those excises have been paid and are unrefunded, be credited against the taxes assessed for the same period under the laws revived and again made operative, applicable and continued in force, but if this credit exceeds the taxes due, the excess shall be refunded upon warrant of the commissioner to the state treasurer. There shall be no further or other recovery of the amounts thus credited or refunded. If any provision of this chapter other than the provisions imposing an excise shall be declared unconstitutional or inoperative, the remaining provisions shall not be affected.

M.G.L. c. 63, § 55 Valuation

c. 63, § 55. Valuation Section 55. The commissioner shall ascertain from the returns or otherwise the true market value of the shares of each corporation required to make a return under section twelve of chapter sixty-two C, and shall estimate therefrom the fair cash value of all the shares constituting its capital stock on January first preceding, which, unless by the charter of a corporation a different method of ascertaining such value is provided, shall, for the purposes of this chapter, be taken as the true value of its corporate franchise. From such value there shall be deducted the value as found by the commissioner of its works, structures, real estate, motor vehicles, trailers, machinery, poles, underground conduits, wires and pipes, subject to local taxation wherever situated. For the purposes of this section the commissioner may take the value at which any works, structures, real estate, machinery, poles, underground conduits, wires and pipes are assessed at the place where they are located as the true value, but such local assessment shall not be conclusive of the true value thereof. For purposes of the deduction of the value of motor vehicles and trailers, the value of such motor vehicles and trailers as determined in accordance with the provisions of chapter sixty A shall be used. The term ''real estate'', as used in this section and in section sixty-eight A, shall include the corporation's interest as lessee in such buildings on land held under a lease as by the terms of the lease are the property of and may be removed by the lessee, and such buildings, for the purposes of said sections shall not be deemed real estate of the lessor.

M.G.L. c. 63, § 58 Tax rate

c. 63, § 58. Tax rate Section 58. Every corporation required to file a return under subsection (h) of section twelve of chapter sixty-two C shall annually pay a tax upon its corporate franchise, after making the deductions provided for in section fifty-five, at a rate equal to the average of the annual rates for three years preceding that in which such assessment is laid, said annual rates to be determined by an apportionment of the whole amount of money to be raised by taxation upon property in the commonwealth during each of the said three years, as returned by the assessors of the several towns under section forty-seven of chapter fifty-nine, upon the aggregate valuation of all towns for each of the said three years, as returned under said section forty-seven.

M.G.L. c. 63, § 59 Assessment of additional taxes

c. 63, § 59. Assessment of additional taxes Section 59. When the commissioner has received notice of an abatement of the taxes of any corporation under section seventy-four of chapter fifty-nine, he shall assess upon such corporation an additional tax upon its corporate franchise value, in such amount as shall make the total franchise tax equal that which would have been assessed had the valuation as established by said abatement been adopted by the commissioner when making his original assessment upon the corporate franchise value of such corporation, which additional tax shall be paid and collected as an addition to the franchise tax next to be assessed upon said corporation after such abatement.

M.G.L. c. 63, § 67 Assessment; rate; return; deductions

c. 63, § 67. Assessment; rate; return; deductions Section 67. The commissioner shall annually assess as of the last day of the taxable year, as defined in paragraph 6 of section thirty, an excise tax upon the interest of every corporation organized under the laws of this commonwealth and having a place of business therein, in any ship or vessel which has, during the period of its business in the year preceding such day, been engaged in interstate or foreign carrying trade or engaged exclusively in fishing and documented and carrying ''papers'' under the laws of the United States, which tax shall be one-third of one percent upon the value of such interest as determined by him. If the commissioner is satisfied of the truth of the return filed pursuant to section twelve of chapter sixty-two C he shall deduct said value from the value of its corporate franchise, if it is taxable under section fifty-eight.

M.G.L. c. 63, § 68 Effect on other taxes

c. 63, § 68. Effect on other taxes Section 68. The taxes imposed by this chapter upon any corporation shall not affect or prevent the imposition and collection of any other tax now authorized, or that may hereafter be authorized, upon any especial privilege, franchise or business enjoyed or exercised by such corporation.

M.G.L. c. 63, § 68A Conflict between local and state valuations; remedy

c. 63, § 68A. Conflict between local and state valuations; remedy Section 68A. If the value of the works, structures, real estate, machinery, poles, underground conduits, wires and pipes owned by a corporation taxable under any provision of this chapter and which are subject to local taxation within the commonwealth, as determined by the commissioner, is less than the value thereof as determined by the assessors of the town where it is situated, the commissioner shall give notice of his determination to such corporation; and, unless within one month after the date of such notice the corporation applies to said assessors for an abatement, and, upon the refusal of the assessors to grant an abatement, prosecutes an appeal under section sixty-four of chapter fifty-nine, giving notice thereof to the commissioner, the valuation of the commission shall be conclusive upon said corporation.

M.G.L. c. 63, § 68C Exemption from excise under Sec. 39 for certain business corporations

c. 63, § 68C. Exemption from excise under Sec. 39 for certain business corporations Section 68C. In general, a business corporation as defined in section 30 is subject to an excise under section 39, as provided in that section, and as modified by section 32D in the case of S corporations and by section 38Y in the case of entities qualifying under section 501 of the Code. Notwithstanding this general rule or any other provision of this chapter, the excise under section 39 shall not apply in the case of a business corporation that is:— (1) a financial institution, as defined in section 1, that is subject to excise under section 2 or 2B; (2) a security corporation as defined in section 38B and subject to excise under that section; [There is no clause (3).] (4) an insurance company subject to excise under sections 20 to 29E, inclusive; (5) an urban redevelopment corporation subject to excise under section 10 of chapter 121A; (6) a corporation described in section 10 or section 18 of chapter 157; (7) a corporation described in section 1 of chapter 171; (8) a corporation or other entity that qualifies as a regulated investment company under section 851 of the Code; or (9) an unincorporated entity within the definition of, and electing to be treated as, a homeowners' association under section 528(c) of the Code and subject to tax for the taxable year as provided in section 5C of chapter 62; or (10) a business corporation otherwise expressly exempted from the excise under this chapter by any other general law.

M.G.L. c. 63, § 69 Inspection of records; examination of officers

c. 63, § 69. Inspection of records; examination of officers Section 69. Every corporation taxable under this chapter, except a foreign corporation taxable under section twenty-one or twenty-three, shall, when required for the purposes of any tax submit its books to the inspection of the commissioner, and its treasurer and directors to examination on oath relative to all matters affecting the determinations to be made by said commissioner.

M.G.L. c. 63, § 79 Penalty for failure to make return for corporate franchise tax

c. 63, § 79. Penalty for failure to make return for corporate franchise tax Section 79. Any corporation, company or association, liable to taxation under section fifty-eight, neglecting to make the returns required by subsection (h) of section twelve of chapter sixty-two C, or refusing or neglecting, when required, to submit to the examinations provided for in section sixty-nine of this chapter, shall forfeit such sum not greater than two per cent upon the par value of its capital stock as the court may deem just and equitable.

M.G.L. c. 63, § 80 Collection of penalties

c. 63, § 80. Collection of penalties Section 80. Penalties and forfeitures imposed by this chapter or by section seventy-four of chapter sixty-two C may be collected by an action of contract under section forty-seven of chapter sixty-two C or by an information under section forty-nine of chapter sixty-two C.

M.G.L. c. 63, § 81 Local taxation, defined

c. 63, § 81. Local taxation, defined Section 81. For the purposes of sections thirty, fifty-five and sixty-eight A, the words ''local taxation'', or their equivalent, as used in said sections with respect to motor vehicles and trailers shall include the excise tax on motor vehicles and trailers assessed and levied under chapter sixty A.

Source: Massachusetts General Court (malegislature.gov)URL: https://malegislature.gov/Laws/GeneralLaws/PartI/TitleIX/Chapter63Fetched: 10/20/2026