Brownfields Tax Credit

The credit commonly known as “The Brownfields Credit” was enacted in 1998. Eligible non-profit organizations and taxpayers are allowed a credit against their Massachusetts personal income tax or corporate excise liability for incurring eligible costs to remove oil or hazardous materials on property the taxpayer owns or leases for business purposes and which is located within an economically distressed area. See G.L. c. 62, § 6(j) and G.L. c. 63, § 38Q. The credit is generally either 25% or 50% of the costs incurred for an environmental response action that results in either a permanent solution or remedy operation status in compliance with the rules set forth under Massachusetts Department of Environmental Protection regulations and G.L. c. 21E. Non-profit organizations and taxpayers who have applied for the credit and received a proposed denial may seek review of the proposed denial by the Office of Appeals. For more information, please see Administrative Procedure 636: Appeal Process for Denial or Partial Denial of Applications for Massachusetts Brownfields Tax Credit.

Life Sciences

On June 16, 2008, the Commonwealth adopted “An Act Providing for the Investment in and Expansion of the Life Sciences Industry in the Commonwealth.” St. 2008, c.130. The Act established the Life Sciences Investment Program as well as the Life Sciences Tax Incentive Program. Technical Information Release 08-23: Life Sciences Tax Incentive Program under St. 2008, c. 130 summarizes the tax incentives available to certified life sciences companies through the Life Sciences Tax Incentive Program, which is administered by the Massachusetts Life Sciences Center.

Manufacturing Classification

A taxpayer that has received a proposed denial of its manufacturing classification application may request a hearing with the Office of Appeals. The request must be made within thirty (30) days of the date set forth in the notice of intent to deny the manufacturing classification application. A hearing on the proposed denial generally will follow the same procedures for the scheduling, conduct, and disposition of other conferences and hearings held at the Office of Appeals. If warranted, however, a site inspection may be conducted in lieu of, or in conjunction with, a hearing. See . The request for a hearing with the Office of Appeals on a proposed denial of a manufacturing classification application does not extend the time limit for filing an appeal with the Appellate Tax Board, as set out in G.L. c. 58, § 2.

Relief from Joint Tax Liability

In some instances, a taxpayer who filed a joint return with his/her spouse may be eligible for relief from the joint liability. This is commonly called “innocent spouse” relief. Relief can be granted where a taxpayer and a spouse file a joint income tax return reporting a substantial understatement of tax attributable to grossly erroneous items of one spouse if (1) the spouse requesting relief establishes that he or she did not know, and had no reason to know, that there was such a substantial understatement; and (2) taking into account all facts and circumstances of a case, it would be inequitable to hold the applicant liable for the deficiency. To be considered substantial, the understated tax, excluding any interest and penalties, must exceed $200 where due to an item or items omitted from gross income; or exceed $500 where due to a claim or claims of deduction, exemption, credit, or basis in an amount for which there is no basis in fact or law. Whether it is inequitable to hold a person liable for a tax deficiency will be determined by all the facts and circumstances of a case. Although no single factor is controlling, consideration will be given to whether the applicant significantly benefited from the substantial understatement of tax. See 830 CMR 62C.84.1.

Responsible Person

In a corporation, partnership, or limited liability company, the person who has or had a duty to pay over taxes on behalf of the corporation or partnership may be deemed a “Responsible Person.” According to 830 CMR 62C.31A.1, the duty to pay over taxes is an obligation to remit taxes that arises from a person's position, function, or responsibility undertaken on behalf of a corporation, partnership or limited liability company. Such obligation need not be a legally enforceable agreement between the corporation, partnership or limited liability company and the person. If a corporation or a partnership fails to pay any required tax, the person deemed the Responsible Person shall be personally and individually liable for the amount of the required tax.

If the person proposed to be deemed responsible disagrees with the proposal, the person may confer with the Commissioner of Revenue within thirty (30) days after the date of the issuance of the notification of the proposed determination. The proposed Responsible Person may also request referral to the Office of Appeals. The Chief of the Collections Bureau or other authorized Department of Revenue personnel specified in the notification of proposed determination of personal liability and the Director of the Office of Appeals, as a matter of joint discretion, may agree to refer the conduct of the conference to the Office of Appeals but such requests will generally only be granted if they present novel issues of law or fact. Unless the proposed Responsible Person is notified of a referral to the Office of Appeals, the conference will be held in the Collections Bureau or other bureau specified in the notification of proposed determination of personal liability. Once deemed a Responsible Person and assessed, if the Responsible Person disagrees with and wishes to contest the finding, he or she must file an Application for Abatement/Amended Return together with substantiating documentation. Time limits apply.