Massachusetts Annual Certification of Entity Tax StatusMarch 11, 2014
Kevin D. Fontana, CPA, MSA, MST
If you haven’t already done so, the Massachusetts Annual Certification of Entity Tax Status application on the Webfile for Business portal must be filed by April 1, 2014 to ensure that qualifying entities appear on the Massachusetts Division of Local Services List of Corporations for 2014. See MA DOR Directive 12-5 for more information about this important requirement (which first became effective for 2013).
Massachusetts Annual Certification of Entity Tax Status
This annual certification enables the Commissioner of Revenue to provide local assessors with a comprehensive and up-to-date list of all entities classified, as of January 1 of each year, as corporations for tax purposes and subject, as corporations, to property tax under G.L. Chapter 59 and corporate excise tax under G.L. Chapter 63. The list assists Massachusetts cities and towns in the determination as to which corporations and entities treated as corporations are entitled to local property tax benefits. 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that have been granted “manufacturing corporation” classification or whose manufacturing corporation classification has been revoked.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.
Previously, this list was compiled by the DOR using various sources; however, effective January 1, 2013, any entity seeking the benefits of inclusion on the list must file the annual certification application by April 1 of the calendar year in which the inclusion on the list is sought. If a corporation does not file the annual certification and is, therefore, not included on the list, it may be assessed unnecessary property taxes and may also incur additional costs in order to repeal such assessments.
Please note - this certification is only required to be completed for entities subject to tax in Massachusetts as a corporation. In addition, there are special rules for QSubs (see footnote #3 in the Directive). An annual certification must be filed for the QSub parent, as well as each QSub.
Disclaimer: Under U.S. Treasury Department guidelines, we hereby inform you that (1) any tax advice contained in this communication is not intended or written to be used, and cannot be used by you, for the purpose of avoiding penalties that may be imposed on you by the Internal Revenue Service (or state and local or other tax authorities), and (2) no part of any tax advice contained in this communication is intended to be used, and cannot be used, by any party to promote, market or recommend any transaction or tax-related matter(s) addressed herein without the express and written consent of Blum, Shapiro & Company, P.C.