August 19, 1981

You inquire as to the Massachusetts income taxation and filing of tax return responsibilities of the ********** ("Association").

The Association is an unincorporated organization of condominium owners not engaged in business for profit. The condominium consists of ten garages. The Association was formed for the purpose of managing the condominium. The Association collects assessments from each condominium owner which it deposits into an interest-bearing checking account. Expenses connected with the garages are paid out of this account. The Association has no other income.

For federal tax purposes the Association qualifies as a homeowners association under Section 528 of the Internal Revenue Code ("Code"). This Section provides that qualifying associations of home or condominium owners are not taxable on their "exempt function income" which is defined as membership dues, fees, or assessments and which is excluded from federal gross income. Other income, less a $100 deduction, is subject to federal taxation.

Massachusetts General Laws Chapter 62C, Section 6(a) requires every partnership, association or trust whose federal gross income is in excess of $100 to make a return of such income.

If the income of the Association (excluding dues, fees or assessments from the owners of the condominium units) is $100 or less, the Association is not required to file a Massachusetts tax return and pay a tax.

If the income of the Association (excluding dues, fees or assessments from the owners of the condominium units) is greater than $100, it is subject to Massachusetts income taxation and must be reported on a Form 3M, Income Tax Return.

Very truly yours,

/s/L. Joyce Hampers

L. Joyce Hampers
Commissioner of Revenue

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LR 81-77