Tax Alert
Starting January 1, 2013, the MA Department of Revenue has initiated a new filing requirement. Beginning in 2013, certain entities need to fill out an on-line Certification for Entity Tax Status with the Commonwealth. So who must file?
- Existing and recently formed (1) corporations, and (2) other business entities, including limited liability companies (LLCs), partnerships, business trusts, certain entities organized in foreign countries and other unincorporated entities, that are classified as corporations for Federal and Massachusetts tax purposes, must file if they have personal property in a Massachusetts city or town and want to ensure they are listed in the DLS List of Corporations as an entity eligible for specific local property tax benefits as a corporation.
The List also specifies all entities treated as business corporations for Massachusetts tax purposes that have been granted “manufacturing corporation” classification or whose manufacturing corporation classification has been revoked. This classification further assists local boards of assessors in the assessment of property taxes.
- Business entities that (1) have changed their entity tax status since the prior year’s certification or (2) are no longer treated as corporations for Federal and Massachusetts tax purposes but were listed in the prior year’s DLS List of Corporations , must also file.
Non-profit corporations or entities that may be eligible for local property tax exemption as charitable, religious, veteran or other organizations are not required to file the Annual Certification of Entity Tax Status. Local boards of assessors make those exemption decisions based on information provided in exemption applications and annual returns the organizations filed with them.
To complete this relatively simple filing, you will be required to log onto your MA web filing account. This is the same site where you would pay estimated taxes, Sales & Use taxes and payroll taxes. Once logged in, there should be an Annual Certification of Entity Tax Status tab under your home page setting. Click on it and fill out the requested information. You will need to know the following to complete the application:
- Indicate type of entity, country of formation and state of formation from drop down list.
- Are you treated as a corporation for tax purposes? Note: this includes S Corporations.
- Has the status as a corporation changed from the prior year – yes or no?
The subsequent questions only appear based upon answers above:
- How is entity classified as a corporation? Due to incorporation or election by an LLC.
- Are you a subsidiary of an S Corporation?
- If item 5 is yes, how is the S Corporation parent taxed for MA purposes?
Once you have answered these items, click submit to file. The initial application is due by April 1 of 2013. Note this application will need to be filed every year going forward due by the same date. Please send a copy to us for our files.
If you have any question in regards to this release, or questions on how to fill out your application, feel free to call us and we will assist you. (413) 536-8510
This material is generic in nature. Before relying on the material in any important matter, users should note date of publication and carefully evaluate its accuracy, currency, completeness, and relevance for their purposes, and should obtain any appropriate professional advice relevant to their particular circumstances.
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