Technical Information Release  TIR 25-5: Tax Provisions in Certain Massachusetts Legislation Enacted in 2024

Date:	06/05/2025
Referenced Sources:	Massachusetts General Laws

This Technical Information Release (“TIR”) explains certain provisions included in “An Act Relative to Strengthening Massachusetts’ Economic Leadership” (the “Economic Development Act”);^[1] “An Act Promoting a Clean Energy Grid, Advancing Equity and Protecting Ratepayers” (the “Climate Act”);^[2] and “An Act Making Appropriations for the Fiscal Year 2024 to Provide for Supplementing Certain Existing Appropriations and for Certain other Activities and Projects” (the “Supplemental Budget”)^[3] that pertain to credits available to taxpayers subject to the income tax, G.L. c. 62, and the corporate excise, G.L. c. 63, as well as corporate excise apportionment rules provided by G.L. c. 63, § 38, and exemptions from the sales and use tax, G.L. c. 64H and G.L. c. 64I.

The following provisions are discussed in this TIR:

• New Climatetech Tax Incentive Program
• New Live Theater Credit
• New Qualified Internship Credit
• New Sales and Use Tax Exemption for Qualified Data Centers
• Changes to the Economic Development Incentive Program Credit
• Changes to the Massachusetts Life Sciences Tax Incentive Program
• Repeal of the Angel Investor Credit
• Changes to the Massachusetts Research Credit
• Single Sales Factor Rules for Companies whose Sales Factor is Inapplicable
• Changes to the Housing Development Incentive Program
• Changes to the Offshore Wind Investment Credit
• Changes to the Offshore Wind Refundable Jobs Credit
• Extension of the Cranberry Bog Renovation Credit

I. New Climatetech Tax Incentive Program

A.  Climatetech Tax Incentive Program

The Economic Development Act established the Climatetech Tax Incentive Program, administered by the Massachusetts clean energy technology center (“MassCETC”) in consultation with the Commissioner of Revenue (“Commissioner”), which consists of three tax credits and a sales and use tax exemption.^[4]  Each of those credits and the sales and use tax exemption are discussed in further detail below.

The purpose of the program is to develop and expand climatetech-related employment opportunities in Massachusetts and to promote climatetech-related economic development in Massachusetts by supporting and stimulating research, development, innovation, manufacturing, and deployment of climate technologies in the climatetech sector.  The incentives are collectively subject to an annual cap of $30,000,000^[5] and are effective for taxable years beginning on or after January 1, 2024.^[6]

B.  Climatetech Incentive Jobs Credit

The Economic Development Act establishes a refundable Climatetech Incentive Jobs Credit for climatetech companies subject to tax under G.L. c. 62 or G.L. c. 63 that have been certified by the MassCETC.^[7]  See G.L. c. 62, § 6(hh) and G.L. c. 63, § 38TT. The MassCETC has the discretion as to whether to confer the credit to a climatetech company pursuant to the Climatetech Tax Incentive Program and, in consultation with the Commissioner, determine the amount of such credit.^[8]  A certified climatetech company that seeks the credit must commit to the creation of a minimum of 5 net new permanent full-time employees in Massachusetts.^[9]  If the credit exceeds the certified climatetech company’s liability for the taxable year, 90 percent of such excess credit is to be refunded to the company.^[10]  Excess credit amounts cannot be carried forward to subsequent taxable years.^[11]

Where the certified climatetech company is a pass-through entity subject to tax under G.L. c. 62, the credit will be attributed on a pro rata basis to the owners, partners, or members of such entity.^[12]

If a climatetech company’s certification is revoked, recapture of the credit will be required.  The Commissioner intends to promulgate regulations that address the recapture of the credit.^[13]

C.  Climatetech Capital Investment Credit

The Economic Development Act establishes a refundable Climatetech Capital Investment Credit for climatetech companies subject to tax under G.L. c. 62 or G.L. c. 63.  To claim the credit, a climatetech company must first be certified by the MassCETC.  See G.L. c. 62, § 6(gg) and G.L. c. 63, § 38RR.^[14]  Once the climatetech company is certified, the MassCETC has the discretion to award the climatetech company a credit for capital investment in a climatetech facility^[15] in an amount up to 50 percent of such investment, provided that the company demonstrates that it has met certain eligibility requirements.^[16]  The credit is awarded in equal parts over five taxable years.^[17]

The eligibility requirements for the Climatetech Capital Investment Credit vary depending on whether the certified climatetech company owns or leases the climatetech facility.  A certified climatetech company that is the owner of a facility must demonstrate to the MassCETC that (i) it has a total capital investment in the facility that equals not less than $5,000,000; and (ii) that the climatetech facility will employ at least 50 new full-time employees by the fifth year of the climatetech company’s certification.^[18]  A certified climatetech company that is a tenant of a climatetech facility, must demonstrate to the MassCETC that (i) the owner has made a total capital investment in the facility that equals not less than $5,000,000; (ii) it leases an area of the facility that represents not less than 25 per cent of the total leasable square footage of the facility; and (iii) it will employ at least 13 full-time employees by the fifth year of the tenant’s certification period.^[19]  Further, in the tenant cases, the amount of credit to be awarded for a taxable year cannot exceed the certified climatetech company’s total lease payments for the facility in the taxable year.^[20]

Where the certified climatetech company is a pass-through entity subject to tax under G.L. c. 62, the credit will be attributed on a pro rata basis to the owners, partners, or members of such entity.^[21]

If a climatetech company’s certification is revoked, recapture of the credit will be required.  The Commissioner intends to promulgate regulations that address the recapture of the credit.^[22]

D.  Climatetech Qualified Research Expenses Credit

The Economic Development Act establishes a Climatetech Qualified Research Expenses Credit for certified climatetech companies subject to tax under G.L. c. 63 for research and development costs, within the meaning of the Internal Revenue Code (“Code”) § 41.^[23]  See G.L. c. 63, § 38SS.  The MassCETC has the discretion to award a climatetech company the credit pursuant to the Climatetech Tax Incentives Program.  The allowable credit is the sum of 10% of the excess, if any, of qualified research expenses for the taxable year, over the base amount, and 15% of the basic research payments determined pursuant to Code § 41(e)(1)(A).^[24]  Each of the terms “qualified research expenses,” “base amount,” “qualified organization base period amount,” “basic research” and any other terms affecting the calculation of the credit have the same meanings as defined in Code § 41, unless the context requires otherwise.^[25] 

In determining the amount of the credit allowable, the Commissioner may aggregate the activities of all corporations that are members of a controlled group as defined by Code § 41(f)(1)(A) and may aggregate the activities of all entities, whether or not incorporated, that are under common control as defined in Code § 41(f)(1)(B).^[26]  The qualified research expenses include those that are performed both inside and outside of the Commonwealth.^[27]

For purposes of G.L. c. 63, § 30, the deduction from gross income that may be taken with respect to any expenditures qualifying for a credit under Code § 41 is based on the cost incurred less the allowable credit allowable under G.L. c. 63, § 38SS; provided, however, that Code § 280C(c) does not apply.^[28]  The credit is limited in the same manner as the Massachusetts Research Credit pursuant to G.L. c. 63, § 38M(e); the credit is limited to 100 percent of a corporation’s first $25,000 of excise, as determined before the allowance of any credits, plus 75 percent of the corporation's excise, as so determined in excess of $25,000.^[29]  The credit cannot reduce a corporation’s corporate excise liability below the minimum excise.^[30]  A corporation entitled to the credit for a taxable year may carry over any excess credit for a taxable year to any of the next 15 succeeding taxable years.^[31]

Where a corporation files a return as part of a combined group under G.L. c. 63, § 32B, a Climatetech Qualified Research Expenses Credit generated by an individual member corporation is applied against the excise attributable to that member under G.L. c. 63, § 39.^[32] Credit amounts that cannot be used by such member, including any carryover amounts, may be shared with other members of the combined group to the extent that such other members can apply the credit to their separately determined corporate excise liabilities for the taxable year. Unused and unexpired credits generated by a member corporation may be carried over from year to year by the individual corporation that generated the credit, but will not be refundable.^[33]

E.  Sales Tax Exemption

The Economic Development Act amends G.L. c. 64H, § 6 by adding a sales tax exemption for sales of tangible personal property purchased for a certified climatetech company, to the extent that the MassCETC, in its discretion, has authorized the exemption pursuant to the Climatetech Tax Incentive Program.  The exemption applies to tangible personal property purchased for use in connection with the construction, alteration, remodeling, repair, or remediation of research, development, or manufacturing or other commercial facilities used for the provisions of goods or services in the climatetech sector and utility support systems.^[34]  See G.L. c. 64H, § 6(yy).

II. New Live Theater Credit

The Economic Development Act establishes a new transferable, non-refundable Live Theater Credit for certain live theater companies subject to tax under G.L. c. 62 or G.L. c. 63.^[35]   See G.L. c. 62, § 6(ff) and G.L. c. 63, § 38QQ.  The Live Theater Credit is administered by the Massachusetts Office of Business Development (“MOBD”), which runs a competitive grant program to award the credit.^[36]  The amount of a live theater company’s credit is equal to 35% of its total in-state payroll costs, 25% of its total in-state production and performance expenditures, and 25% of its total in-state transportation expenditures, and may not exceed the amount specified in the eligible theater production certificate issued by MOBD.^[37]  Further, the total annual amount of the credit that can be claimed with respect to a particular production cannot exceed $7,000,000.^[38]  MOBD  has the discretion to authorize up to $7,000,000 in annual credits.^[39]

To be eligible for the Live Theater Credit, a theater production must be a live stage musical, dance, theatrical production, or tour that is either: (i) a pre-Broadway production; (ii) a pre-off Broadway production; (iii) a national tour launch; or (iv) a regional professional theater production.^[40] The theater production must be presented in a qualified production facility.^[41]

An applicant seeking the Live Theater Credit must submit an application to MOBD for certification of a theater production.^[42]  The theater production’s budget must be not less than $100,000.^[43]  If MOBD determines that a theater production is eligible, it will issue an eligible theater production certificate, which will specify a conditional live theater credit amount.^[44]

Upon completion of an eligible theater production for which a certificate has been granted, the applicant must submit to MOBD and the Department of Revenue a cost accounting, which must contain a cost report and an accountant’s certification.^[45]  The amount of the Live Theater Credit will be based upon the applicant’s total in-state payroll costs, production and performance expenditures, and transportation expenditures, as discussed above.^[46]

The Live Theater Credit may be carried forward for up to five tax years from the date the credit was issued.^[47]  Taxpayers may also assign, transfer or convey the Live Theater Credit.^[48]  The assignor must notify the Commissioner in writing, and provide any required information, within thirty days of the effective date of the transfer.^[49]

The Live Theater Credit is available for tax years beginning on or after January 1, 2025.^[50]  The statute that confers the Credit will expire on January 1, 2030.^[51]

III. New Qualified Internship Credit

The Economic Development Act conditionally establishes a new non-transferable, refundable Qualified Internship Credit for employers engaged in business in Massachusetts who are subject to tax under either G.L. c. 62 or G.L. c. 63 and employ qualified interns during the taxable year.^[52]  See G.L. c. 62, § 6(ii) and G.L. c. 63, § 38UU.  The Executive Office of Economic Development (“EOED”), which administers the credit, has the discretion to authorize the credit for taxpayers starting in the taxable year that follows the next state fiscal year in which Massachusetts closes with a consolidated net surplus of at least $400 million.^[53] The credit is scheduled to be repealed on January 1 of the sixth tax year following the effective date of the credit.^[54]

The credit is equal to the lesser of $5,000 or 50% of the wages paid to each “net-new” qualified intern that the employer employs during the taxable year.^[55]  The total annual amount of credits that can be authorized by EOED cannot exceed $10,000,000 annually, and an employer may not claim more than $100,000 in the credits for any taxable year.^[56]

The credit is available to the employer of a qualified intern, provided that the intern is a student at or recent graduate of a public or private institution of higher education located in Massachusetts who works for the employer for at least 12 weeks in the taxable year.^[57]  The employer must demonstrate that the total number of its interns employed in the taxable year exceeds the average number of interns employed over the previous three taxable years.^[58]  A student or recent graduate cannot generate a credit for more than one employer in any taxable year.^[59] 

Credits claimed by an employer that is a non-corporate entity must be attributed on a pro rata basis to the owners, partners, or members of the employer.^[60]

The Economic Development Act requires that the EOED, in consultation with the Commissioner, adopt regulations establishing an application process for the credit.^[61]

IV. New Sales and Use Tax Exemption for Qualified Data Centers

The Economic Development Act creates a new exemption from the sales and use tax for purchases of certain tangible personal property used for the construction or refurbishment of qualified data centers and for use by such newly constructed or refurbished qualified data centers.^[62]  The exemption is allowed only to the extent that EOED, in its discretion, has authorized a taxpayer to claim it.  See G.L. c. 64H, § 6(zz).  In particular, the exemption applies to the purchase of eligible data center equipment,^[63] software,^[64] electricity used in a qualified data center, and construction costs^[65] incurred in the building, renovation, or refurbishment of a qualified data center.^[66]

A data center operator or owner seeking to claim the exemption must submit an application to the Secretary of EOED to have the data center be certified as a qualified data center.^[67]  For a data center to be certified as a qualified data center, the data center must: (1) be constructed or substantially refurbished in Massachusetts; (2) be owned or leased by the operator of the data center facility or an entity under common ownership with the operator; (3) be comprised of one or more data center buildings with an aggregate size of at least 100,000 square feet located on a single parcel or contiguous parcels; (4) have incurred at least $50,000,000 in qualified data center costs for the construction, refurbishment, renovation, or improvement of the facility to be used as a qualified data center within a 10-year period from the effective date of the data center’s certification; (5) maintain a minimum of 100 jobs in Massachusetts; (5) be used to house computer information technology equipment, networking, data processing or data storage; (6) employ certain safety and security measures; and (7) satisfy any other qualifications determined by EOED, in consultation with the Commissioner.^[68]   

Once EOED certifies the data center, the data center is a qualified data center for a 20-year period, starting from the date on which the application was submitted to EOED or a prospective date stated in the application that does not exceed 5 years after the date on which the application was submitted.^[69] Where the data center is comprised of more than one data center building, each subsequently constructed building at the qualified data center facility during the qualification period has a separate 20-year qualification period.  That period begins when the building commences commercial operations, as evidenced by receipt of a certificate of occupancy, and expires at the close of the 20^th calendar year following the calendar year each respective data center building commenced commercial operations.^[70]

EOED, in consultation with the Commissioner, may revoke a data center’s certification if EOED determines the data center has failed to incur at least $50,000,000 in qualified data center costs or maintain at least 100 jobs in Massachusetts.^[71]  Where a data center’s certification has been revoked, it no longer qualifies for the exemption starting on the first day of the tax year of the revocation.^[72]  Further, the Commissioner will disallow any previous exempt purchases afforded to the data center for that tax year under its certification.^[73]

If the qualified data center is sold to a new owner prior to the expiration of the 20-year qualification period, the exemption will remain in effect and apply to the subsequent owner for the remaining duration of the qualification period, subject to the same requirements.^[74]

EOED and the Commissioner are required to promulgate regulations and issue instructions or forms necessary for the administration of the exemption.^[75]

The sales and use tax exemption for data centers is in effect with respect to purchases made on or after November 20, 2024 by owners and operators of data centers that have been certified by EOED.^[76]

V. Changes to the Economic Development Incentive Program Credit

The Economic Development Act amends G.L. c. 62, § 6(g) and G.L. c. 63, § 38N to make several changes^[77] to the credit provided pursuant to the economic development incentive program (“EDIP”) to taxpayers subject to tax under G.L. c. 62 or G.L. c. 63 who participate in a certified project as defined in G.L. c. 23A, §§ 3A and 3F.^[78]  The Economic Assistance Coordinating Council (“EACC”), which administers the EDIP, has the discretion to confer state and local tax incentives in exchange for job creation and investment commitments.^[79]  Taxpayers may claim the EDIP Credit only to the extent authorized by the EACC.^[80]  The EACC can authorize up to  $30,000,000 in EDIP Credits for a calendar year.^[81]

The Economic Development Act removes several restrictions that applied to the EDIP Credit. Pursuant to the Act, the EACC may now annually authorize more than $5,000,000 in refundable credits. Also, taxpayers who receive non-refundable Credits are entitled use those credits to offset more than 50% of their tax liability in a taxable year. Further, taxpayers claiming the EDIP credit may now also claim the investment tax credit provided by G.L. c. 63, § 31A.^[82]   

The changes to the EDIP Credit apply to credits authorized by the EACC on or after November 20, 2024, the date of enactment of the Economic Development Act.

VI. Changes to the Massachusetts Life Sciences Tax Incentive Program

The Massachusetts Life Sciences Tax incentives Program, administered by the Massachusetts Life Sciences Center, allows life sciences companies to claim various tax incentives, including several tax credits, a corporate excise deduction, and a sales and use tax exemption.^[83]  A life sciences company is an entity engaged in life sciences research, development, manufacturing or commercialization in Massachusetts.^[84]  Prior to the Economic Development Act, the cumulative annual amount of life sciences tax incentives that the Massachusetts Life Sciences Center could, in its discretion, authorize was limited to $30,000,000.

Effective for taxable years beginning on or after January 1, 2024, the Economic Development Act amends G.L. c. 23I, § 5(d) and G.L. c. 62, § 6(r) to increase the cumulative annual amount of life sciences tax incentives that the Massachusetts Life Sciences Center can authorize to $40,000,000.^[85]  In addition, the Economic Development Act expands eligibility for the life sciences tax incentives by expanding the definition of “life sciences” to include biosecurity, life sciences related artificial intelligence, medical technology, and preventative medicine.^[86]  The expansion of the definition of “life sciences” is effective for applications beginning with those submitted to the Massachusetts Life Sciences Center for the 2024 taxable year.

VII. Repeal of the Angel Investor Credit

The Economic Development Act repeals the Angel Investor Credit, previously allowed under G.L. c. 62, § 6(t).^[87]  The credit was available to taxpayers subject to tax under G.L. c. 62 in an amount equal to 20% of the amount of qualifying investments made by a taxpayer investor in a qualifying business generally, and 30% of the amount of qualifying investments made by a taxpayer investor in a qualifying business located in a “Gateway municipality,” as defined in G.L. c. 23A, § 3A.  The Massachusetts Life Sciences Center administered the credit, in consultation with the EOED and the Commissioner, and awarded the credit in its discretion.  Angel Investor Credits awarded by the Massachusetts Life Sciences Center were included in the cumulative annual limit applicable to the Massachusetts Life Sciences Tax Incentive Program established in G.L. c. 23I, § 5(d).

The credit was allowed for tax years beginning on or after January 1, 2017. The effective date of the credit’s repeal is January 1, 2024.^[88]  Therefore, no credits may be awarded after this date.  A taxpayer that has unused credit in a tax year beginning on or after January 1, 2024 that has been carried forward from a prior tax year may claim the credit in such tax year subject to the limitations under 830 CMR 62.6.5(11).

VIII. Changes to the Massachusetts Research Credit

The Massachusetts Research Credit may be claimed by business corporations subject to tax under G.L. c. 63 that incur “qualified research expenses” and “basic research payments,” as such terms are defined in Code § 41.^[89]  The credit closely parallels the federal research credit.  Taxpayers may elect to compute the Massachusetts Research Credit separately for defense related activities and other research activities.^[90]  Defense related activities are generally activities carried out in Massachusetts that relate to the business of researching, developing, and producing for sale, pursuant to a contract or subcontract: (1) arms, ammunitions, or implement of war designated in the munitions list published pursuant to 22 U.S.C. 2778, but only to the extent that such property is specifically designed, modified, or equipped for military purposes; or (2) equipment for the National Aeronautics and Space Administration.^[91]

The Economic Development Act amends G.L. c. 63, § 38M(j)(2) to expand the definition of “defense related activities” to also include medical countermeasures, including, but not limited to: (1) medicines and medical supplies that can be used to diagnose, prevent or treat diseases related to chemical, biological, radiological or nuclear threats; (2) biologic products, vaccines, blood products and antibodies; and (3) antimicrobial or antiviral drugs, diagnostic tests to identify threat agents and personal protective equipment.^[92]

The expansion of “defense related activities” for purposes of the Massachusetts Research Credit is effective for expenses incurred on or after November 20, 2024.

IX. Single Sales Factor Rules for Companies whose Sales Factor is Inapplicable

Effective for tax years beginning on or after January 1, 2025, G.L. c. 63, §§ 2A and 38 require all business corporations, including financial institutions, that must apportion their income to Massachusetts to determine the portion of their net income subject to tax in Massachusetts by using only the receipts or sales factor.^[93]  The Supplemental Budget amends G.L. c. 63, § 38(g) to provide a special rule that will apply to business corporations, other than financial institutions, for tax years when those corporations’ sales factors are inapplicable.^[94]  Pursuant to this change, for such years, these corporations will be required to base their apportionment on the percentage of their property and payroll in Massachusetts.^[95]  The sales factor of such a corporation is inapplicable if: (i) both its numerator and denominator are zero; (ii) the denominator is less than 10 per cent of one third of the taxable net income; or (iii) it is otherwise determined by the Commissioner to be insignificant in producing income.^[96]   

The Supplemental Budget’s change does not affect the computation of the receipts factor for purposes of determining the apportionment percentage for financial institutions.

X. Changes to the Housing Development Incentive Program

The Supplemental Budget amends G.L. c. 62, § 6(q)(5) and G.L. c. 63, § 38BB(5) to make changes to the $30,000,000 annual cap for the Housing Development Incentive Program Credit.^[97] The Executive Office of Housing and Livable Communities (EOHLC), which administers the credit, has the discretion to authorize the credit for taxpayers subject to tax under G.L. c. 62 or G.L. c. 63 that invest in certified housing development projects in Massachusetts.^[98]  The credit is based on a taxpayer’s qualified project expenditures incurred for newly constructed or rehabilitated multi-unit residential housing that contains a minimum of 80% market rate units.^[99]  The total amount of credits that EOHLC may award in a calendar year is limited to $30,000,000.^[100]

Prior to the Supplemental Budget, any portion of the $30,000,000 annual limit not awarded by EOHLC during a calendar year was extinguished and therefore could not be awarded.  The Supplemental Budget requires that any unused portion of the annual cap be added to the total amount of credit that EOHLC may authorize in subsequent years.^[101]

XI. Changes to the Offshore Wind Investment Tax Credit

Both the Economic Development Act and the Climate Act amend G.L. c. 62, § 6(cc) and G.L. c. 63, § 38MM to make changes to the Offshore Wind Investment Tax Credit. The MassCETC, which administers the credit, has the discretion to authorize the credit for owners or members of offshore wind companies subject to tax under G.L. c. 62 and offshore wind companies subject to tax under G.L. c. 63 that invest in certain offshore wind facilities.^[102]

The Economic Development Act clarifies the eligibility requirements for tenants of an offshore wind facility seeking to claim the credit.^[103]  Prior to the Economic Development Act, a tenant needed to demonstrate that it occupied a leased area of the offshore wind facility that represented not less than 25% of the owner’s capital investment in the facility.  Pursuant to the Economic Development Act, a tenant must instead demonstrate that it occupies a leased area of the offshore wind facility that represents at least 25% of the total leasable square footage of the facility.^[104]

The Climate Act also makes changes to the Offshore Wind Investment Tax Credit. Prior to the Climate Act, where the certified offshore wind company was a tenant of an offshore wind facility, the aggregate number of full-time employees from all tenants at the facility had to be at least 200 by the fifth year of the company’s certification period.  The Climate Act changes this employment requirement to instead require that each tenant employ at least 50 full-time employees by the fifth year of the tenant’s certification period.^[105]

XII. Changes to the Offshore Wind Jobs Tax Credit

The Economic Development Act amends G.L. c. 62, § 6(bb) and G.L. c. 63, § 38LL to make changes to the Offshore Wind Jobs Tax Credit.  The MassCETC, which administers the credit, has the discretion to authorize the credit for owners or members of offshore wind companies subject to tax under G.L. c. 62 and offshore wind companies subject to tax under G.L. c. 63.^[106]  Prior to the Economic Development Act, certified offshore wind companies were required to commit to the creation of not less than 50 net new permanent employees in Massachusetts to be eligible for the credit.  The Economic Development Act lowers this employment requirement by requiring such companies to commit to the creation of not less than 10 net new permanent full-time employees in Massachusetts.^[107] 

XIII. Extension of the Cranberry Bog Renovation Credit

The Cranberry Bog Renovation Credit, which allows taxpayers subject to tax under G.L. c. 62 or G.L. c. 63 to claim, in the discretion of the Secretary of Energy and Environmental Affairs, a credit for expenses incurred in renovating cranberry bogs, was due to expire on December 31, 2025.^[108]  The Economic Development Act amends St. 2021, c. 24, § 148 to extend the credit to tax years ending on or before December 31, 2030.^[109]

                                                                                    /s/Geoffrey E. Snyder
                                                                                    Geoffrey E. Snyder
                                                                                    Commissioner of Revenue
GES:RHF:db

June 5, 2025

TIR 25-5
 

[1] St. 2024, c. 238, signed into law on November 20, 2024.

[2] St. 2024, c. 239, signed into law on November 20, 2024.

[3] St. 2024, c. 248, signed into law on December 4, 2024.

[4] The Economic Development Act, § 78; G.L. c. 23J, § 16(d).

[5] G.L. c. 23J, § 16(d)(1).

[6] The Economic Development Act, § 325.

[7] The Economic Development Act, §§ 194; 212.

[8] G.L. c. 62, § 6(hh)(1); G.L. c. 63, § 38TT(a).

[9] G.L. c. 62, § 6(hh)(2); G.L. c. 63, § 38TT(b).

[10] G.L. c. 62, § 6(hh)(3); G.L. c. 63, § 38TT(c).

[11] Id.

[12] G.L. c. 62, § 6(hh)(5).

[13] G.L. c. 23J, § 16(c)(2).

[14] The Economic Development Act, §§ 194; 212.

[15] A climatetech facility is any building, complex of buildings or structural components of buildings, including access infrastructure and machinery and equipment used in the research, manufacturing, assembly, development, provision or administration of goods or services in the climatetech sector.  G.L. c. 62, § 6(gg)(1); G.L. c. 63, § 38RR(a).

[16] G.L. c. 62, § 6(gg)(2); G.L. c. 63, § 38RR(b).

[17] Id.

[18] G.L. c. 62, § 6(gg)(3); G.L. c. 63 § 38RR(c).

[19] G.L. c. 62, § 6(gg)(4); G.L. c. 63, § 38RR(d).

[20] Id.

[21] G.L. c. 62, § 6(gg)(6).

[22] G.L. c. 23J, § 16(c)(2).

[23] The Economic Development Act, § 212.

[24] G.L. c. 63, § 38SS(a).

[25] Id.

[26] Id.

[27] G.L. c. 63, § 38SS(b).

[28] G.L. c. 63, § 38SS(c).

[29] G.L. c. 63, § 38SS(e).

[30] G.L. c. 63, § 38SS(d), (f).

[31] G.L. c. 63, § 38SS(g).

[32] G.L. c. 63, § 38SS(f).

[33] Id.

[34] The Economic Development Act, § 214.

[35] The Economic Development Act, §§ 194; 212.

[36] G.L. c. 23A, § 3M(b)(1).

[37] G.L. c. 62, § 6(ff)(2); G.L c. 63, § 38QQ(b).

[38] G.L. c. 23A, § 3M(b)(2); G.L. c. 62, § 6(ff)(2); G.L. c. 63, § 38QQ(b).

[39] G.L. c. 23A, § 3M(b)(1).

[40] G.L. 62, § 6(ff)(1); G.L. c. 63, § 38QQ(a).

[41] Id.

[42] G.L. c. 23A, § 3M(b)(2).

[43] Id.

[44] G.L. c. 23A, § 3M(b)(3).

[45] G.L. c. 23A, § 3M(c).  

[46] G.L. c. 62, § 6(ff)(2); G.L. c. 63, § 38QQ(b).

[47] G.L. c. 62, § 6(ff)(3); G.L. c. 63, § 38QQ(c).

[48] G.L. c. 62, § 6(ff)(4); G.L. c. 63, § 38QQ(d).

[49] Id.

[50] The Economic Development Act, § 319.

[51] The Economic Development Act, §§ 315; 322.

[52] The Economic Development Act, §§ 194; 212.

[53] The Economic Development Act § 320; G.L. c. 62 § 6(ii)(2); G.L. c. 63 § 38UU(b).

[54] The Economic Development Act §§ 316; 324.

[55] The Economic Development Act §§ 194, 212; G.L. c. 62 § 6(ii)(1); G.L. c. 63 § 38UU(a).

[56] The Economic Development Act §§ 194, 212; G.L. c. 62 § 6(ii)(3); G.L. c. 63 § 38UU(c).

[57] The Economic Development Act §§ 194, 212; G.L. c. 62 § 6(ii)(2); G.L. c. 63 § 38UU(b).

[58] Id.

[59] Id.

[60] The Economic Development Act §§ 194, 212; G.L. c. 62 § 6(ii)(4).

[61] The Economic Development Act §§ 194, 212; G.L. c. 62 § 6(ii)(5); G.L. c. 63 § 38UU(d).

[62] The Economic Development Act, §§ 47, 214.

[63] As provided in G.L. c. 64H, §  6(zz)(4), eligible data center equipment includes computers and equipment supporting computing, networking, data processing or data storage, including, but not limited to: (1) servers and routers, computer servers and routers, connections, chassis, networking equipment, switches, racks, fiber optic and copper cables, trays, conduits and other enabling machinery, equipment and hardware; (2) component parts, replacement parts and upgrades; (3) cooling systems, cooling towers, chillers, mechanical equipment, HVAC equipment, refrigerant piping, fuel piping and storage, adiabatic and free cooling systems, water softeners, air handling units, indoor direct exchange units, fans, ducting, filters and other temperature control infrastructure; (4) power infrastructure for transformation, generation, distribution or management of electricity used for the operations and maintenance of a qualified data center, including, but not limited to, substations, switchyards, transformers, generators, uninterruptible power supplies, backup power generation systems, battery systems, energy efficiency measures, supplies, fuel piping and storage, duct banks, switches, switchboards, testing equipment and related utility infrastructure; (5) monitoring and security equipment; (6) water conservation systems, including, but not limited to, equipment designed to collect, conserve and reuse water; (7) modular data center equipment and preassembled components of any item described in this paragraph, including, but not limited to, components used in the manufacturing of modular data centers; and (8) any other personal property or equipment that is used or consumed in the operation and maintenance of the qualified data center.

[64] For purposes of the exemption, software refers to software purchased, leased, utilized or loaded at a qualified data center, including, but not limited to, maintenance, licensing and software customization.  G.L. c. 64H, § 6(zz)(4).

[65] Construction costs include the costs of materials, labor, services and equipment purchased or leased to construct a qualified data center facility, including, but not limited to, the cost of data center building, accessory building, building improvement, land development, site improvement, site utility infrastructure, building materials, steel, concrete, gravel, engineering services, heavy equipment, cranes, transportation equipment, excavation, storm water system and management, access roads, bridges, fencing, lighting, landscaping, and other costs to construct the facility.  G.L. c. 64H, § 6(zz)(4).

[66] G.L. c. 64H, § 6(zz)(1)(A)-(D).

[67] G.L. c. 23A, §   70(c).

[68] G.L. c. 64H, § 6(zz)(4); G.L. c. 23A, §70(b).

[69] G.L. c. 64H, § 6(zz)(4); G.L. c. 23A, §70(e).

[70] Id.

[71] G.L. c. 23A, § 70(g)(1).

[72] G.L. c. 23A, § 70(g)(3); G.L. c. 64H, § 6(zz)(2).

[73] Id.

[74] G.L. c. 64H, § 6(zz)(3).

[75] G.L. c. 23A, § 70(i); G.L. c. 64H, § 6(zz)(3).

[76] The Economic Development Act, § 326.

[77] The Economic Development Act, §§ 184-188; 200-207. In addition, the Economic Development Act changes the EDIP to allow the EACC greater flexibility in administering the program and also streamlines some of its requirements.  See the Economic Development Act, §§ 20-39; 164-170.

[78] G.L. c. 62, § 6(g)(2); G.L. c. 63, § 38N(b).

[79] See generally G.L. c. 23A, § 3A.

[80] Id.

[81] G.L. c. 62, § 6(g)(3); G.L. c. 63, § 38N(c).

[82] The Economic Development Act, §§ 35; 185; 201; 206.

[83] In particular, the Massachusetts life sciences tax incentive program consists of (1) the Life Sciences FDA User Fees Tax Credit provided by G.L. c. 62, § 6(n) and G.L. c. 63, § 31M; (2) the Life Sciences Refundable Investment Tax Credit provided by G.L. c. 62, § 6(m) and G.L. c. 63, § 38U; (3) the Life Sciences Research Tax Credit provided by G.L. c. 63, § 38V; (4) a modified refundable version of the standard Research Tax Credit provided by G.L. c. 63, § 38M(k)(2); (5) the Life Sciences Refundable Jobs Tax Credit provided by G.L. c. 62, § 6(r) and G.L. c. 63, § 38CC; (6) a corporate excise deduction for qualified clinical expenses for certain drugs that would not be fully deductible otherwise provided by G.L. c. 63, § 38W; and (7) a sales and use tax exemption for materials used to construct a life sciences facility provided by G.L. c. 64H, § 6(xx).  See G.L. c. 23I, § 5(d).

[84] G.L. c. 23I, § 2.

[85] The Economic Development Act, §§ 70; 189.

[86] The Economic Development Act, §§ 61; 195; 197; 208.

[87] The Economic Development Act, § 190.

[88] The Economic Development Act, § 325.

[89] G.L. c. 63, § 38M(a).

[90] G.L. c. 63, § 38M(j)(1)-(2).

[91] Id.

[92] The Economic Development Act, § 196.

[93] G.L. c. 63, § 38(c).  See also TIR 24-4, Section IV.A.

[94] The Supplemental Budget, § 15.

[95] G.L. c. 63, § 38(g).

[96] Id.

[97] The Supplemental Budget, §§ 13, 16.

[98] G.L. c. 40V §§ 1, 4(a); G.L. c. 62, § 6(q); G.L. c. 63, § 38BB.

[99] Id.

[100] G.L. c. 62 § 6(q)(5); G.L. c. 63 § 38BB(5).

[101] The Supplemental Budget, §§ 13, 16.

[102] The Climate Act, §§ 40; 41; the Economic Development Act, §§ 191; 209; G.L. c. 62, § 6(cc); G.L. c. 63, § 38MM.

[103] The Economic Development Act, §§ 191; 209.

[104] Id.

[105] The Climate Act, §§ 40; 41.

[106] The Economic Development Act, §§ 191; 209; G.L. c. 62, § 6(bb); G.L. c. 63, § 38LL.

[107] The Economic Development Act, §§ 191; 209. 

[108] St. 2021, c. 24, § 148.

[109] The Economic Development Act, § 277.