From time to time, the Commissioner of Revenue announces expanded requirements for electronic filing and payment as authorized under G.L. c. 62C, § 5, reflecting advances in technology that have led increasing numbers of taxpayers to do business electronically.  Electronic filing offers many benefits to both taxpayers and the Department of Revenue (“DOR”).  It speeds up the processing of tax returns, resulting in quicker refunds to taxpayers. It also reduces the impact on our environment and lowers costs for DOR and the Commonwealth.

Most recently, in Technical Information Release (“TIR”) 15-9, the Commissioner expanded electronic filing and payment requirements for business taxpayers effective January 1, 2016.  This TIR revokes and replaces TIR 15-9 effective January 1, 2017 and expands the list of electronic filing and payment requirements to include the following additional returns:[i]

Form CT-11, Non-Stamper Cigarette Excise Return

Form ST-11, Individual Use Tax Return

Form M-990T-62, Exempt Trust and Unincorporated Association Income Tax Return

Effective January 1, 2017, a taxpayer filing any of the returns listed above will also be required to file and pay electronically.  Paper filings and payments will no longer be accepted.  Additionally, taxpayers filing these returns will be required to submit amended returns and abatement requests electronically.  If a taxpayer, without reasonable cause, fails to conform any filing or payment with the method prescribed by the Commissioner, a penalty of not greater than $100 for each improper return and for each improper payment shall be added to and become a part of the tax required to be paid.  G.L. c. 62C, § 33(g).  If, despite best efforts, a taxpayer has difficulty making the transition from paper to electronic filing and payment, the taxpayer should contact the Department’s Customer Service Bureau at (617) 887-MDOR or toll-free in Massachusetts at (800) 392-6089 to inquire about the process for a waiver of penalties.


                                   Electronic Filing Requirements as of January 1, 2017
Business Trustee TaxesMUST FILE ELECTRONICALLY

Business registrations for any of the tax types below

  • wage withholding,
  • room occupancy,
  • sales & use (including sales tax on meals and telecommunication services), or
  • alcoholic beverages excise,[1]
  • cigarettes & tobacco,[2]
  • gasoline and fuel,[3]
  • ferry embarkation,[4]
  • satellite service,[5] or
  • Convention Center financing surcharges.[6]
  • return
  • amendment and abatement requests
  • payment with return

Businesses with certain combined tax liabilities at or exceeding the $5,000 “combined tax threshold”[7]

Businesses or organizations:

1.  that have an annual combined tax liability of $5,000 or more tallied from among all of the following types of taxes:

 

  • return
  • amendment and abatement requests
  • payment with return
  • withheld amount
  • wage withholding,
  • room occupancy,
  • sales & use (including sales tax on meals and telecommunication services),
  • alcoholic beverages excise,
  • cigarettes & tobacco,

    OR

  • gasoline and fuel,
  • ferry embarkation,
  • satellite service, and
  • Convention Center financing surcharges;

 

2.  that met the $5,000 combined tax threshold or the then-applicable combined tax threshold for electronic filing in a previous year and/or prior twelve months. 
Corporate and Financial Institution Excises and Insurance Company Premium TaxMUST FILE ELECTRONICALLY

1. Businesses or organizations that meet the following thresholds, as applicable:

  • corporations reporting more than $100,000 in gross receipts or sales or other income on their federal return;
  • S Corporations reporting gross income totaling more than $100,000;[8]
  • financial institutions with gross income (as defined in G.L. c. 63, § 1) of $100,000 or more;[9]
  • taxpayers paying the urban redevelopment excise reporting gross income of $100,000 or more; or
  • corporations exempt from taxation under section 501 of the Internal Revenue Code reporting unrelated business taxable income of $100,000 or more on Form M-990T;[10]

OR

2. that met this excise or tax electronic filing threshold or the then- applicable excise or tax electronic filing threshold in a previous year.

  • return
  • payment with return
  • estimated payments
  • extension payments
  • amendment and abatement requests
Corporations seeking extensions.[11]
  • extension payments of $5,000 or more

Insurance companies subject to tax under G.L. c. 63.[12]

  • return
  • payment with return
  • estimated payments
  • extension payments
  • amendment and abatement requests
Taxpayer members of a combined group under G.L. c. 63, § 32B.[13]
  • return
  • payment with return
  • amendment and abatement requests
  • extension payments
Pass-through Entity and Fiduciary FilersMUST FILE ELECTRONICALLY

Partnerships:

1. with 25 or more partners, or

2. at or above the partnership e-file annual income or loss threshold of:

  1. $50,000 or more in gross income or ordinary loss; or
  2. $100,000 in gains or losses through sale of stock.[14]
  • return
  • extensions
Partnership composite returns on behalf of individual non-resident members.[15]
  • return
  • estimated payments
  • extension payments
Pass-through entities with members other than resident individuals or with members receiving distributive share for which withholding or estimated taxes have been paid.[16]
  • return
  • extension payments
  • amended returns
Fiduciaries with annual total Part A, Part B and Part C net taxable income of $50,000 or more.[17]
  • payment with return
  • estimated payment
Exempt Trusts and Unincorporated AssociationsMUST FILE ELECTRONICALLY
Trusts and unincorporated associations exempt from taxation under section 501 of the Internal Revenue Code reporting unrelated business taxable income of $100,000 or more.[18]  This income must be reported on Form M-990T-62.
  • return
  • payment with return
  • extension payments
  • amendment and abatement requests
Personal Income TaxMUST FILE ELECTRONICALLY

Personal income tax preparers must file all Massachusetts personal income tax returns (i.e., Forms 1 and 1-NR-PY) electronically unless the preparer reasonably expects to file 10 or fewer original Massachusetts Forms 1 and 1-NR-PY during the calendar year or the taxpayer directs that filing be done on paper.[19]

 

  • return

 

Individuals filing extension requests. [20]
  • extension payments of $5,000 or more, or extension requests with no payment
Individual Use TaxMUST FILE ELECTRONICALLY
Taxpayers reporting use tax on the purchase of taxable items on which Massachusetts sales tax was not paid.[21]
  • return (Form ST-11)
  • payment with return
  • amendment and abatement requests
Employers, Pension Payers, Third Party Bulk Filers, Other PayersMUST FILE ELECTRONICALLY
Employers filing 50 or more quarterly wage reports.[22]
  • W-2 information
Pension payers filing Form M-945 and withholding income tax for payee.[23]
  • return
  • payment with return
  • withheld amount
Third party bulk filers (withhold and file for employers’ wage withholding obligation).[24]
  • return
  • payment with return
  • withheld amount
Persons who file 50 or more of any particular form in the 1099 series annually.[25]
  • Form 1099.
Cigarette StampersMUST FILE ELECTRONICALLY
Bonded cigarette stampers.[26]
  • payment (unless stamps paid for at time of pick-up)
Non-Stamper Cigarette ExciseMUST FILE ELECTRONICALLY
Massachusetts residents reporting the cigarette excise on purchases of cigarettes that are either unstamped or stamped by another state or jurisdiction.[27]
  • return (Form CT-11)
  • payment
  • amendment and abatement requests
License Applications and Renewals
Cigarette RetailersMUST FILE ELECTRONICALLY
Applicants including renewal applications for tobacco retailer licenses
  • Form CT-RL
Gasoline and Fuel SuppliersMUST FILE ELECTRONICALLY
Applicants including renewal applications for distributors, importers and exporters of gasoline and user-sellers or suppliers of special fuels
  • Form GT-1
  • Form SFT-1
   



 

/s/Michael J. Heffernan
Michael J. Heffernan
Commissioner of Revenue
 

MJH:RHF:ds

November 1, 2016

TIR 16-9

 



[i] A complete listing of electronic filing requirements is available on DOR’s website at the following link:  http://www.mass.gov/dor/e-services/e-file-requirements.html.


[1] Imposed under G.L. c. 138, § 21.
[2] Cigarette and tobacco excises include those on cigar and smoking tobacco imposed under G.L. c. 64C, § 7B; cigarette stamp purchases and cigarette license taxes imposed under G. L. c. 64C, and club alcohol excise for alcoholic beverages sold by a “chapter 180 organization.”  (Generally, a chapter 180 organization is any corporation, association, or organization, including fraternal organization, that is licensed by any city or town in Massachusetts to sell alcoholic beverages and that was organized under Chapter 180 of Massachusetts General Laws.)
[3] Gasoline and fuel taxes include the following: IFTA taxes, including the purchase of annual decals as required under G.L. c. 64F, § 6; excise on special fuels under G.L. c. 64E, excise on jet fuel under G.L. c. 64J, excise on gasoline fuel under G.L. c. 64A; and excise on aviation gasoline under G.L. c. 64J.
[4] Authorized under section 129 of chapter 46 of the Acts of 2003, as amended by section 11 of chapter 55 of the Acts of 2003 and sections 44-47 of chapter 65 of the Acts of 2004.
[5] Imposed under G.L. c. 64M.
[6] The Convention Center financing surcharge is imposed on sightseeing tours, vehicle rentals, and parking facilities under G.L. c. 62C, § 86.
[7] “Combined tax threshold” refers to a taxpayer’s annual combined tax liability for all of the listed tax types for the purpose of determining whether the taxpayer must file electronically.  The annual combined tax threshold is currently set at $5,000; taxpayers at or above that level of tax liability for one or more of the nine listed tax types must file returns and pay taxes electronically.  The combined tax threshold concept was first applied to wage withholding, room occupancy, and sales and use taxes in TIR 02-22, and the threshold was reduced from $10,000 to $5,000 in TIR 10-18.
[8] See TIR 05-22, section II.A, for the definition of C corporation revenue amounts that are included in the threshold calculation, and TIR 10-18, section II for the definition of S corporation revenue amounts that are included in the threshold calculation.  Note that the annual threshold is now set at $100,000 or more (previously, the annual threshold was set at revenue amounts exceeding $100,000).
[9] Financial institutions were previously required to pay electronically if they had gross income of $100,000 or more.  They were not, however, required to file electronically. See TIR 04-30.
[10] See Regulation 830 CMR 63.38T.1
[11] See TIR 04-30 II.B.
[12] Insurance companies were previously required to pay electronically if they had taxable revenue of $100,000 or more.  They were not, however, required to file electronically. See TIR 04-30.
[13] See TIR 09-18 II.
[14] See TIR 03-11 X.
[15] See TIR 09-18 III.
[16] See TIR 09-18 IV.
[17] See TIR 04-30 II.E.
[18] See Regulation 830 CMR 63.38T.1
[19] See TIR 11-13.
[20] See TIR 04-30 II.D.
[21] Note that an individual’s use tax may alternatively be reported on a personal income tax return.  Such returns, other than as filed by a personal income tax preparer who files more than 10 Massachusetts Forms 1 and 1-NR-PY during a calendar year, are not required to be filed electronically - although all personal income tax filers are   encouraged to do so.  See TIR 11-13.
[22] See TIR 04-30 II.F.
[23] See TIR 04-30 II.G.
[24] See TIR 04-30 III.A.
[25] See DD 09-09.
[26] See TIR 04-30 III.F.

[27] See DD 02-14.