- New Worth Calculation
- Documentation to Submit with Abatement/Amended Tax Return
- Massachusetts References
For purposes of classification as either a tangible or intangible property corporation, assets subject to Massachusetts local taxation are excluded.
Schedule B of Form 355 - Massachusetts Business or Manufacturing Corporation Excise Return, is used to determine whether a corporation is either a tangible or intangible property corporation.
Tangible Property Corporation:
A corporation is classified as a tangible property corporation if 10% or more of its total assets, not subject to local taxation, is Massachusetts situated tangible property that is also not subject to local taxation. Conversely, if less than 10% of the corporation's total assets, not subject to local taxation, is this type of asset, the corporation is classified as an intangible property corporation.
New Worth Calculation
In two instances the corporate excise statute requires foreign and domestic corporations to employ different formulas in determining tax liability. Specifically, these are:
- the determination of a corporation's status as a tangible or intangible property corporation, and
- the calculation of net worth for intangible property corporations.
For tax years beginning on or after January 1, 1999:
- corporations may elect on their returns to use (i) the statutory formula for domestic corporations or (ii) the statutory formula for foreign corporations to determine its classification as a tangible or intangible property corporation.
- domestic and foreign intangible property corporations are permitted to choose either of the two net worth formulas, domestic or foreign.
Documentation to Submit with Abatement/Amended Tax Return:
- Corrected Form 355 - Massachusetts Business or Manufacturing Corporation Excise Return
- M.G.L. Chapter 63, Sections 30.8 - 11
- TIR 99-3: Effective Date Clarification for Department Directive 99-1 (The Perini Directive)
- DD 99-1: Determining Whether a Corporation Is a Tangible Property Corporation or an Intangible Property Corporation under G.L. c. 63 Sections 30.10, 30.11; Calculating Net Worth of Intangible Property Corporations under G.L. c. 63 Sections 30.8 and 30.9