MASSACHUSETTS DEPARTMENT OF REVENUE REGULATION FACT SHEET

TITLE: 830 CMR 62B.2.3: Motion Picture Production Company Withholding

SUMMARY OF REGULATION: Under M.G.L. c. 62B, § 2, the Commissioner is authorized to require persons other than employers to deduct and withhold taxes from payments other than wages in order to protect the revenue of the commonwealth. This regulation establishes and explains the requirements of a motion picture production company ("production company") to withhold Massachusetts income tax on payments to personnel such as artists, crew, actors, directors and producers, regardless of whether such payments are made to a "loan-out" or an independent contractor. A loan-out is a personal service corporation or other entity contracted with and retained by the production company to provide individual personnel for the performance of services used directly in the production. This regulation:

  • requires the production company to register for withholding
  • requires the production company to remit the required withholding prior to filing a motion picture production company tax credit ("credit") application
  • requires a representative of the production company, a representative of the loan-out and the individual to sign an allocation form testifying to the accuracy of the claimed Massachusetts source income being paid to the loan-out for the services of the individual used directly in the production
  • requires the individual providing services for the production to sign the allocation form acknowledging that upon filing a Massachusetts income tax return any overpayment of the income tax liability will be applied to estimated taxes for the next year unless all of the Massachusetts source income related to the allocated withholding tax has been reported
  • disqualifies payments to independent contractors and loan-outs for the credit if the withholding and reporting requirements are not met

REASON FOR CHANGE:
To improve compliance with Massachusetts tax laws by recipients of Massachusetts source income from production companies.

EFFECTIVE DATE: The regulation is effective for payments to independent contractors and loan-outs made on or after February 18, 2010.

REGULATORY HISTORY:
New regulation promulgated April 2, 2010.

PREPARED BY:
Massachusetts Department of Revenue
Rulings and Regulations Bureau
100 Cambridge Street, 7 th Floor
Boston, Massachusetts 02114
(617) 626-3250
FAX: (617) 626-3290