The BTC may be available to individual taxpayers, non-profit organizations, and business corporations that clean up contaminated property in Massachusetts.
The taxpayer must complete the cleanup in compliance with standards set out by the Department of Environmental Protection (DEP).
Depending on the extent of the completed cleanup, the taxpayer may apply to the Department of Revenue for the credit equal to either 25% or 50% of the cost.
Please note: This information is intended solely as a resource; only the Massachusetts Department of Revenue (DOR) has the authority to determine eligibility and interpret the law governing the Brownfields Tax Incentive Program.
Review the basic requirements to qualify for the Massachusetts Brownfields Incentive Program:
- The cleanup must begin on or before August 5, 2023 and the net response and removal costs must be incurred before January 1, 2024.
- You are an eligible person as defined under MGL Ch. 21E S.2.
- The property is owned or leased by the applicant for a business purpose.
- The property is located in an Economically Distressed Area (PDF).
- The property has been reported to the Massachusetts Department of Environmental Protection (MassDEP).
- The property has achieved a Permanent Solution or is in Remedy Operation Status (ROS).
- The site meets the 15% assessed value test.
If yes, then you may be eligible for the credit.
Regulation 830 CMR 63.38Q.1 and Administrative Procedure 636 provide further details.
- Report the release of oil and/or hazardous material to MassDEP and obtain a Release Tracking Number (RTN).
- Hire a Licensed Site Professional to direct and oversee the remediation process.
- Determine the extent of contamination and conduct a risk characterization to determine eligible costs (PDF).
- File required reports with MassDEP.
Begin remediating your site in accordance with the plans filed with MassDEP.
Be sure to keep all field records, receipts, invoices, change orders and proofs of payment as you may be required to submit them as proof/documentation (see how to apply below).
- File the required Permanent Solution or ROS report(s) with MassDEP.
- Organize all documents supporting the credit application.
Proof of Paid Unemployment Tax
You MUST also verify that the contractor and/or the payroll company has paid the requisite unemployment taxes. The 940 Certification is generated from your online Unemployment Insurance account.
For more legal guidance, go to TIR 15-4.
If you have questions, contact the Department of Unemployment Assistance at (617) 626-5770.
Apply for Your Tax Credit
Apply for the appropriate Tax Credits on Form BCA with DOR. Documentation required with the application may include:
- A detailed narrative written by a qualified environmental professional (i.e. Licensed Site Professional) in support of why the submitted costs were necessary to achieve a Permanent Solution. (Separate and exclusive from reports submitted to MassDEP)
- Documentation showing the Assessed Value of the property
- The applicant’s deed or lease agreement for the property
- A description of the business purpose for which the property is owned or leased;
- A copy of the construction plan for the property or site, including a cross-sectional diagram, if available
- Daily or weekly field reports and/or field logbooks prepared by contractors and/or onsite environmental/engineering oversight personnel that describe the activities related to the performance of Response Actions
- Soil transportation logs (if applicable)
- A detailed statement of the property’s owner/operator history and contaminant release history to the extent known or discoverable by the applicant (if not clearly documented in reports submitted to MassDEP)
- A complete list of all Eligible Costs including invoice dates, costs, the name of the vendor and a brief description of the services provided. The listing should be submitted electronically, in a standard database spreadsheet
- Special verification with respect to costs associated with approaching or achieving background and costs related to historic fill, if applicable (see 830 CMR 63.38Q.1)
- With respect to any general requirements or general conditions payment item claimed as an Eligible Cost on the application, an itemized breakdown of the costs that are included in such general requirements or general conditions payment item
- A representation by the applicant or an officer of the applicant, provided under the pains and penalties of perjury, that all requirements of 830 CMR 63.38Q.1 have been met
- A Phase I Site Investigation Report, a Phase II Comprehensive Site Assessment Report, or other similar report detailing the reported release of oil and/or hazardous material at the property prior to or during Response Actions (if not available on MassDEP Electronic File Viewer)
For a list of additional documents that may be needed, please read:
Electronic submission is preferred.
The maximum amount of the BTC may not:
- Reduce the corporate excise due below $456
- Exceed 50% of its corporate excise or personal income tax.
Any unused credits may be:
- Carried forward for the next 5 tax years, or
If a credit recipient doesn't maintain the property in compliance with standards set out by the BTC, the credit may be recaptured.
- 830 CMR 63.38Q.1: Massachusetts Brownfields Tax Credit
- Eligible Costs Under the Brownfields Tax Credit
- Massachusetts General Laws Chapter 62, Section 6(j) (Personal Income)
- Massachusetts General Laws Chapter 63, Section 38Q (Corporate Excise)
- Massachusetts General Laws Chapter 31E, Section 2
- 310 Code of Massachusetts Regulation 40
- Letter Ruling 12-3: Inapplicability of Brownfields Tax Limitation to Insurance Premium Excise
- Directive 13-4: Guidance with Respect to Brownfields Tax Credit Applications
If you have questions about the eligibility criteria for the Brownfields Tax Incentive Program, contact:
Rulings and Regulations Bureau – email@example.com
Kristin Rideout, Credit Supervisor
For all other ways to connect, go to Contact DOR.