Technical Information Release

Technical Information Release  TIR 01-13: Transition Rule for Utility Corporations Taxable Year

Date: 08/28/2001
Organization: Massachusetts Department of Revenue
Referenced Sources: Massachusetts General Laws

Corporate Excise

The statutory definition of taxable year with respect to utility corporations was rewritten by St. 2000, c. 128, § 3, and codified at G.L. c. 63, § 52A(1)(c). This statutory change was approved July 7, 2000 and became effective October 5, 2000. Under the new definition, the taxable year of utility corporations for state taxation purposes mirrors the taxable year for federal purposes. Under the former statutory definition, the taxable year for utility corporations generally corresponded to the federal taxable year, except when there was a short federal taxable year. In that case the former Massachusetts statute required the utility corporation to file its return on a twelve-month basis.

The new definition of taxable year became effective without statutory guidance on whether it applied either to a) taxable years beginning on or after October 5, 2000 or to b) taxable years that ended on or after October 5, 2000. In order to resolve this ambiguity in the absence of specific legislative direction, the Department will require utility corporations with tax years beginning before October 5, 2000 and ending during calendar year 2000, to elect to file their returns based on either the current definition of "taxable year", or the former definition of "taxable year." The return (or returns) for such a utility corporation must meet the following two conditions: (i) no income for any period shall be left unreported so that all income from the utility corporation that is reported to the federal government for a period must also be used in the calculation of Massachusetts taxable income, and (ii) no income for any period should be counted twice on the Massachusetts return(s). If a taxpayer files short year returns during the period covered by this transition rule, the taxpayer must use the same definition of taxable year for each of these returns. The taxpayer must indicate as an attachment to its Utility Corporation return(s), Form P.S.1, which definition of taxable year it has elected. For taxable years beginning on or after October 5, 2000, or ending after December 31, 2000, taxpayers are required to file returns based on the amended version of G.L. c. 63, § 52A(1)(c).

/s/Bernard F. Crowley, Jr.,
Bernard F. Crowley, Jr.,
Acting Commissioner

August 28, 2001

TIR 01-13

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