Manufacturing or research and development companies entitled to local property-tax benefits must file the Annual Certification of Entity Tax Status online with the Massachusetts Department of Revenue (DOR) by April 1, 2014 to claim those benefits.
Corporations seeking to maintain (or acquire) favored property-tax status must file by the deadline to ensure that they appear on DOR’s Division of Local Services List of Corporations for 2014. Cities and towns use “The List” to determine which corporations and entities treated as corporations are entitled to local property tax relief. The List also specifies for Massachusetts tax purposes, businesses that have been granted the “manufacturing corporation” classification.
Joseph X. Donovan, a tax lawyer at Sullivan and Worcester, says because of tax law changes in 2009, the Department of Revenue could no longer use filings with the Secretary of the Commonwealth to alert local officials about the tax status of a company.
“While the change to a new procedure was necessary, there is a real risk that companies —
unaware of the new annual filing requirement to protect favored local property tax status— will find themselves effectively declassified, with potentially very harsh consequences,” Donovan said.
“While they will be able to cure the declassification by challenging it in the Appellate Tax Board, that route can be quite costly. Moreover, the resolution of any dispute before the Board can take a long time. We should hope that taxpayers who find themselves before the Board in such circumstances will be permitted to quickly and informally resolve with opposing counsel the ‘foot fault’ of failure to file the form.”
The DOR publishes “The List” electronically on its Web site on or about April 1. Omission from the list or any particular classification may be appealed by the employer.
Here are some resources for employers:
- DOR Reminder – April 1 Filing Deadline
- DOR Webfile (Demo application form)
- DOR Webfile (Login & File now)
- FAQ on Annual Certification
- DOR Directive 12-5
- The 2013 Corporation’s List
If you have trouble with the registration process, or with accessing your account, please contact DOR Customer Service at 617-887-6367. If you have questions about completing the Annual Certification of Entity Tax Status online application after reviewing the FAQs, please contact the Division of Local Services.Should you have any additional questions, please contact Brad MacDougall, Vice President for Government Affairs or 617-262-1180.