|Organization:||Massachusetts Department of Revenue|
|Referenced Sources:||Massachusetts General Laws|
Personal Income Tax/Corporate
Introduction: This TIR announces a statutory change, enacted June 26, 2014 and effective March 24, 2015, which creates new certification requirements for (1) employers entering into contracts with the Commonwealth of Massachusetts or its agencies or instrumentalities for goods, services, and leases valued at more than $5,000 and (2) employers seeking certain tax credits in excess of $5,000.
Statutory Change: St. 2014, c. 144, § 60 added the following sentence to G.L. c. 151A, § 19A, subsection (b): “An agency or instrumentality of the commonwealth shall not enter into, renew or extend a contract or agreement with any employer to provide goods, services or physical space that has a maximum obligation or value greater than $5,000 to the agency or instrumentality or authorize any tax credit pursuant to chapter 62 or 63 in excess of $5,000 unless the employer has submitted a certificate of compliance issued by the department [of unemployment assistance] showing that it is current in all its DUA obligations relating to contributions, payments in lieu of contributions and the employer medical assistance contribution established in section 189 of chapter 149.” 
Discussion: Employers that are either (1) vendors/bidders seeking to enter into, renew or extend a contract with a state agency pursuant to a procurement for goods, services, or a lease valued at more than $5,000 or (2) taxpayers seeking approval of certain tax credits of more than $5,000 must provide a certificate of compliance from the Department of Unemployment Assistance (DUA) to the contracting agency (in the case of procurements valued above $5,000) or the agency that awards, issues or authorizes the tax credit (in the case of tax credits exceeding $5,000).
The Department of Revenue (DOR) interprets the statutory language referring to authorization of tax credits as referring only to those refundable and/or transferable tax credits sought by employers that have a specific authorization or approval process before the credit can be claimed or transferred. As discussed in greater detail in the annual tax credit transparency report, the various refundable and transferable tax credits that require an advance authorization or approval process by a state agency differ in the particulars of these processes, which are created by statute and detailed in applicable regulations.
Beginning March 25, 2015, with respect to the three tax credits for which DOR is the administering agency – the film credit, the Brownfields credit, and the medical device credit – DOR will require an employer certification from DUA to be on file (either submitted with a timely filed credit application or provided separately) from applicants. To be valid, the certification must be dated no more than ninety (90) days prior to submission to DOR. With respect to credits that are awarded and/or issued by other agencies, as reflected in the following chart, those agencies will require the employer certification from DUA as part of their approval processes and taxpayers that are employers and that seek those credits should contact the authorizing agency for information on the specific requirements, including the time and manner for filing such certification.
Employers seeking a certificate of compliance from DUA in order to seek authorization of a tax credit referenced in the following chart should go to the DUA website at http://www.mass.gov/lwd/unemployment-insur/ for further instructions on how to request a certificate.
|Tax Credit||Statutory Authority||Administering Agency for the Credit:|
|Film Tax Credit (refundable and transferable)||See G.L. c. 62, § 6(l) and c. 63, § 38X.||Department of Revenue|
|Brownfields Tax Credit (transferable)||See G.L. c. 62, § 6(j) and c. 63, § 38Q.||Department of Revenue|
|Medical Device Company Tax Credit (transferable)||See G.L. c. 62, § 6½ and c. 63, § 31L.||Department of Revenue|
|Historic Rehabilitation Tax Credit (transferable)||See G.L. c. 62, § 6J and c. 63, § 38R.||Massachusetts Historical Commission|
|Dairy Farmer Tax Credit (refundable)||See G.L. c. 62, § 6(o) and c. 63, § 38Z.||Department of Agricultural Resources|
|Life Sciences Tax Incentive Program – Investment Tax Credit (refundable)||See G.L. c. 62, § 6(m) and c. 63, § 38U.||Life Sciences Center|
|Life Sciences Tax Incentive Program – User Fees Credit (refundable)||See G.L. c. 62, § 6(m) and c. 63, § 38U.||Life Sciences Center|
|Life Sciences Tax Incentive Program – Research Credit (refundable)||See G.L. c. 63, § 38M(j).||Life Sciences Center|
|Life Sciences Tax Incentive Program - Jobs Credit (refundable)||See G.L. c. 62, § 6(r) and c. 63, § 38CC.||Life Sciences Center|
|Economic Development Incentive Program Credit (refundable)||See G.L. c. 62, § 6(g) and c. 63, § 38N.||Economic Assistance Coordination Council (EACC)|
|Conservation Land Tax Credit (refundable)||See G.L. c. 62, § 6(p) and c. 63, § 38AA.||Executive Office of Energy and Environmental Affairs (EOEEA)|
|Low-Income Housing Tax Credit (transferable)||See G.L. c. 62, § 6I and c. 63, § 31H.||Department of Housing and Community Development (DHCD)|
|Certified Housing Development Tax Credit (transferable)||See G.L. c. 62, § 6(q) and c.63, § 38BB.||Department of Housing and Community Development (DHCD)|
|Community Investment Tax Credit (refundable)||See G.L. c. 62, § 6M and G.L. c. 63, § 38EE||Department of Housing and Community Development (DHCD)|
Commissioner of Revenue
March 19, 2015