Financial Institution Excise

Companies subject to financial institution excise

Massachusetts financial institution excise applies to:

• Banks
• Trust companies
• Federal or state savings and loan associations existing by authority of the United States, or any state or a foreign country.

It also applies to:

• Bank holding companies 
• Subsidiaries of bank holding companies
• Savings and loan holding companies
• Corporations subject to supervision by the Massachusetts Division of Banks
• Other corporations
• Certain other corporations that derive more than 50% of gross income from loan origination,lending activities and credit card activities.

Credit unions are not subject to the excise.

For more information see

• (TIR) 95-6
• Instructions for Form 63 FI , Financial Institution Excise Return.

Engaged in Business - Massachusetts Nexus

The financial institution excise applies to any financial institution engaged in business in Massachusetts.

The term "engaged in business," includes:

• Having a business location in Massachusetts
• Having employees, representatives or independent contractors conducting business activities on its behalf in Massachusetts
• Maintaining, renting or owning any tangible or real property in Massachusetts
• Regularly performing services in Massachusetts
• Regularly engaging in transactions with customers in Massachusetts that involve intangible property and result in income flowing to the taxpayer from residents of Massachusetts
• Regularly receiving interest income from loans secured by tangible personal property or real property located in Massachusetts or
• Regularly soliciting and receiving deposits from customers in Massachusetts.

The activities described in the last 4 bullets above are presumed to be conducted on a regular basis in Massachusetts if:

• They are conducted with 100 or more residents of Massachusetts during any taxable year 
• The taxpayer has $10,000,000 or more of assets from sources in Massachusetts or
• The taxpayer has more than $500,000 in receipts from sources in Massachusetts.

Estimated Payments

Estimated payment requirements and procedures are the same as other corporations.

See TIR 16-9 for more information on filing estimated payments.