Financial Institution Excise

Learn if your business is subject to financial institution excise tax.

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

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 payment requirements and procedures are the same as other corporations.

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