Vanpool Credit

Learn about the credit available to corporations that have ride sharing expenses.

Overview

The vanpool credit may be available to business corporations subject to the corporate excise for certain eligible expenses.

The credit is equal to 30% of the cost incurred during the taxable year for the purchase or lease of company shuttle vans used by the corporation in an employer-sponsored ride sharing program in Massachusetts.

Eligibility

Eligible costs include:

  • Purchases of vehicles used as company shuttle vans
  • Lease payments for vehicles used as company shuttle vans.

Costs that are not eligible include:

  • Insurance
  • Maintenance
  • Fuel
  • Drivers' salaries
  • Finance charges or
  • Other operating expenses.

In addition, the company shuttle vans must be:

  • Used by the corporation in Massachusetts, and
  • Situated in Massachusetts on the last day of the corporation's taxable year.

To qualify, company shuttle vans must also be used for certain uses, like bringing:

  • Employees from their homes to their jobs or
  • Students from a public transportation facility to a school campus in Massachusetts.

Minimum excise, maximum amount of credits, carryover, proration, and recapture

The credit may not reduce the corporate excise due below $456. The maximum amount of credits, otherwise allowable in any one taxable year to a corporation, may not exceed 50% of its excise.

A corporation may carry over the credit and apply it to its excise for any subsequent tax year the portion of those credits, as reduced from year to year, not allowed.

The amount of the credit will be prorated for property disposed of or no longer having a qualified use prior to the end of the tax year.

Additionally, the credit will be recaptured if:

  • The property on which credit has been takenĀ is disposed of or
  • The property ceases to be in qualified use prior to the end of its useful life.

No recapture is necessary if the property has been in qualified use for more than 4 consecutive years.

Additional information

For other information and definitions, please see:

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