Section 6 Credits
Section 6. The following credits shall be allowed against the tax imposed by this chapter:
(a) A credit shall be allowed against taxes imposed by this chapter to a resident for taxes due any other state, territory or possession of the United States, or the Dominion of Canada or any of its provinces on account of any item of Massachusetts gross income subject to the following restrictions and limitations: (i) the amount of such taxes due on such income shall exclude interest and penalties; (ii) the amount of such taxes due shall be reduced by any federal credit therefor allowable on the resident’s federal income tax return; and (iii) the amount of the credit allowable shall be the lesser of such taxes as reduced by (i) and (ii), or the amount of tax imposed by this chapter multiplied by a fraction the numerator of which is such item of Massachusetts Part A, Part B or Part C income and the denominator of which is the total Massachusetts Part A, Part B or Part C income, as the case may be. The credit hereunder shall be allowed to estates of residents and to trustees or other fiduciaries described in subsection (c) of section ten.
[Second paragraph of subsection (a) effective for tax years beginning on or after January 1, 2009. See 2008, 173, Sec. 101.]
In the case of dividends received out of tax-free earnings and profits of a corporate trust previously subject to tax under this chapter, shareholders of the corporate trust shall be entitled to a credit for income taxes paid to other jurisdictions on those earnings and profits, either by the corporate trust or by the shareholders, as otherwise calculated under this subsection.
[There is no subsection (b) or (c).]
(d) any owner or tenant of residential property located in the commonwealth who is not a dependent of another taxpayer and who occupies said property as his principal residence, shall be allowed a credit equal to fifteen per cent of the net expenditure for a renewable energy source property or one thousand dollars, whichever is lesser; provided, however, that in the case of a newly constructed residence the credit shall be available to the original owner/occupant. Any taxpayer entitled to this credit for any taxable year, the amount of which exceeds his total tax due for the then current taxable year, may carry over the excess amount, as reduced from year to year, and apply it to his tax liability for any one or more of the next succeeding three taxable years; provided, however, that in no taxable year may the amount of the credit allowed exceed the total tax due of the taxpayer for the relevant taxable year. Joint owners of a residential property shall share any credit available to the property under this subsection in the same proportion as their ownership interest.
As used in this section the following words shall have the following meanings:
(I) “Renewable energy source property”, property, including materials and component parts thereof, separately purchased and assembled by such residential property owner;
(A) which, when installed in connection with a dwelling, transmits or uses:
(1) solar energy or any other form of renewable energy which the commissioner specified by regulations, for the purpose of heating or cooling such dwelling or providing hot water for use within such dwelling, or produces electricity for such purposes, or
(2) wind energy for nonbusiness residential purposes;
(B) the original use of which begins with the taxpayer;
(C) which can reasonably be expected to remain in operation for at least five years; and
(D) which meets the performance and quality standards, if any, which:
(i) have been prescribed by the commissioner by regulation; and
(ii) are in effect at the time of the acquisition of the property.
(II) “Net expenditure”, the total of the purchase price for any renewable energy source property, plus installation cost less any credits received pursuant to the Internal Revenue Code and less grants or rebates received from the United States Department of Housing and Urban Development.
(e) Any owner of a residential premises who pays for the containment or abatement of any paint, plaster or other accessible structural materials containing dangerous levels of lead or who pays for the replacement of one or more window units in a dwelling unit constructed prior to nineteen hundred and seventy-eight for the purpose of bringing a dwelling unit into full compliance with the provisions of sections one hundred and eighty-nine A to one hundred and ninety-nine B, inclusive, of chapter one hundred and eleven concerning materials containing dangerous levels of lead shall be allowed a credit in the amount of the cost of said removal, containment or replacement or one thousand five hundred dollars per dwelling unit, whichever is less. Any owner of a residential premises who pays for the containment or abatement of any paint, plaster or other accessible structural materials containing dangerous levels of lead or who pays for the replacement of one or more window units in a dwelling unit constructed prior to nineteen hundred and seventy-eight in pursuit of an emergency lead management plan and letter of interim control, as provided for in subsection (b) of section one hundred and ninety-seven of chapter one hundred and eleven concerning materials containing dangerous levels of lead shall be allowed a credit in the amount of one-half the cost of said removal, containment, or replacement or five hundred dollars per dwelling unit, whichever is less, provided that any costs claimed as part of such credit must be certified by a licensed inspector to be costs necessary to achieving ultimate full compliance; and provided, further, that any credit received for interim control shall be considered as part of the maximum credit allowable per unit for any owner pursuing full compliance. Tax credits for full compliance or interim controls shall include window replacement done for the purposes of lead abatement. Such credits shall be allowed for the containment, abatement or replacement of any paint, plaster or other accessible structural materials containing dangerous levels of lead only if (i) the presence of lead is established by an inspector licensed by the childhood lead poisoning prevention program, and (ii) following such removal, the owner obtains a letter of compliance or interim control from a licensed inspector pursuant to subsections (b), (c) and (d) of section one hundred and ninety-seven of chapter one hundred and eleven and files with the department of revenue such letter of compliance or interim control and a certification, in recordable form, stating the number of dwelling units, as defined in the state sanitary code for which such credit is being claimed. Any taxpayer eligible for the foregoing tax credit for the then taxable year may carry forward any such unused credit or any unused portions thereof and apply it to his tax liability in any one or more of the succeeding seven taxable years. The commissioner shall, in consultation with the director of the childhood lead poisoning prevention program and the director of labor and workforce development, promulgate regulations to implement the provisions of this section.
(f) There is hereby established a credit for businesses offering health insurance to their employees. For the purposes of this section, the term “businesses” shall include professions, sole proprietorships, trades, businesses, or partnerships.
Any business which (a) has one or more full-time equivalent employees unrelated to its owners or partners but no more than fifty of such employees calculated on an average annual basis, (b) in any period of three consecutive years beginning after December thirty-first, nineteen hundred and eighty-four and before April twenty-first, nineteen hundred and eighty-eight makes no expenditure for the full or partial payment of premiums for a health insurance plan covering any of its then employees, and (c) makes qualifying health insurance premium expenditures for a health insurance plan covering its employees in each year beginning after such three year period, including any year in which a credit is taken pursuant to this section, shall be allowed a credit against its income tax due under this chapter in two consecutive tax years.
The amount of such credit in the first tax year in which it is taken shall be twenty per cent of the entire amount of the qualifying health insurance premium expenditure made by such business in such tax year. The amount of such credit in the second tax year in which it is taken shall be ten per cent of the entire amount of such qualifying health insurance premium expenditure made by such business in such tax year. To qualify for such credits, the health insurance premium expenditure of such business must equal at least fifty per cent of the total cost of the premiums for such health insurance plan and such health insurance plan must be available at least to all of the full-time employees of such business. For the purposes of this section, “unrelated” shall mean not having the familial relationship of spouse, mother, father, or child.
Credits pursuant to this subsection shall be available only in tax years beginning on or after January first, nineteen hundred and ninety and ending on or before December thirty-first, nineteen hundred and ninety-two. This subsection shall expire on December thirty-first, nineteen hundred and ninety-two.
(g) (1) A credit shall be allowed against the tax liability imposed by this chapter, up to an amount equal to fifty percent of such liability in any taxable year, an amount equal to five percent of the cost of any property that (i) would qualify for the credit allowed by section thirty-one A of chapter sixty-three if the property were purchased by a manufacturing corporation or a business corporation engaged primarily in research and development and (ii) is used exclusively in a certified project within the economic opportunity area as defined in section three A of chapter twenty-three A. If such property is disposed of or ceases to be in qualified use within the meaning of said section thirty-one A or if such property ceases to be used exclusively in such a certified project within such an economic opportunity area before the end of its useful life, the recapture provisions of subsection (e) of said section thirty-one A shall apply and an amount determined thereunder shall be added to the tax imposed by this chapter.
(2) Any taxpayer entitled to a credit under this subsection for any taxable year may carry over and apply to the tax for any one or more of the next succeeding ten taxable years, the portion, as reduced from year to year, of those credits which exceed the tax for the taxable year; provided, however, that in no event shall the taxpayer apply the credit to the tax for any taxable year beginning more than five years after the certified project or economic opportunity area ceases to qualify as such under the provisions of chapter twenty-three A.
(3) For purposes of this subsection, the commissioner of revenue may aggregate the activities of all entities, whether or not incorporated, under common control as defined in subsection (f) of section forty-one of the Code.
(4) The commissioner of revenue shall promulgate such rules and regulations necessary to implement the provisions of this subsection. Such rules and regulations may provide for the adjustment of prices and elimination of transactions between related taxpayers to ensure that all amounts upon which the credit is based reasonably reflect fair market value. In addition, such rules and regulations shall include provisions to prevent the generation of multiple credits with respect to the same property.
[Subsection (h) effective for tax years beginning on or after January 1, 2009. See 2008, 173, Sec. 101.]
(h) A taxpayer shall be allowed a credit against the taxes imposed by this chapter if such person qualified for and claimed the earned income credit, so called, allowed under the provisions of section 32 of the Code, as amended and in effect for the taxable year. With respect to a person who is a nonresident for all or part of the taxable year, the credit shall be limited to 15 per cent of the federal credit multiplied by a fraction the numerator of which shall be the earned income of the nonresident from Massachusetts sources and the denominator of which shall be the earned income of the nonresident from all sources. The credit allowed by this subsection shall equal 15 per cent of the federal credit received by the taxpayer for the taxable year. If other credits allowed under this section are utilized by the taxpayer for the taxable year, the credit afforded by this subsection shall be applied last. If the amount of the credit allowed hereunder exceeds the taxpayer’s liability, the commissioner shall treat such excess as an overpayment and shall pay the taxpayer the amount of such excess, without interest.
(i) Any owner of residential property located in the commonwealth who is not a dependent of another taxpayer and who occupies said property as his principal residence, shall be allowed a credit equal to 40 per cent of the expenditures for design and construction expenses for the repair or replacement of a failed cesspool or septic system pursuant to the provisions of Title V as promulgated by the department of environmental protection in 1995. Said expenditures shall be the actual cost to the taxpayer or $15,000, whichever is less; provided, however, that said credit shall be available to eligible taxpayers beginning in the tax year in which the repair or replacement of said cesspool or septic system was completed; and provided, further, that said credit shall not exceed $1,500 in any tax year and any excess credit may be applied over the following five subsequent tax years up to an aggregate maximum of $6,000. The amount of any such credit shall be reduced by an amount equal to the total interest subsidy or grant received from the commonwealth, whether directly or indirectly, toward the cost of said expenditures. The department shall promulgate such rules and regulations as are necessary to administer the credit afforded by this subsection, including, but not limited to, a notification system by the commonwealth to recipients of said interest subsidy or grant of the amount of the total subsidy provided by the commonwealth.
(j)(1) A taxpayer or nonprofit organization which commences and diligently pursues an environmental response action on or before August 5, 2011, and who achieves and maintains a permanent solution or remedy operation status in compliance with chapter 21E and the regulations promulgated pursuant thereto which includes an activity and use limitation shall, at the time such permanent solution or remedy operation status is achieved, be allowed a base credit of 25 per cent of the net response and removal costs incurred between August 1, 1998, and January 1, 2012, for any property it owns or leases for business purposes and which is located within an economically-distressed area as defined in section 2 of chapter 21E. Such costs shall be not less than 15 per cent of the assessed value of the property prior to response action on or before remediation and the site shall be reported to the department of environmental protection. A credit of 50 per cent of such costs shall be allowed for any such taxpayer or nonprofit organization which achieves and maintains a permanent solution or remedy operation status in compliance with said chapter 21E and the Massachusetts Contingency Plan at 310 CMR 40.00, as amended, which does not include an activity and use limitation. Only a taxpayer or nonprofit organization that is an eligible person, as defined in section 2 of said chapter 21E, and not subject to any enforcement action brought pursuant to said chapter 21E shall be allowed a credit.
Any credit allowed under this subsection may be taken only after a response action outcome statement or remedy operation status submittal has been filed with the department of environmental protection as set forth in said Massachusetts Contingency Plan.
(2) If the taxpayer ceases to maintain the remedy operation status or the permanent solution in violation of the Massachusetts Contingency Plan prior to the sale of the property or the termination of the lease, the difference between the credit taken and the credit allowed for maintaining the remedy shall be added back as additional taxes due in the year the taxpayer fails to maintain the remedy operation status or permanent solution. The amount of the credit allowed for maintaining the remedy shall be determined by multiplying the original credit by the ratio of the number of months the remedy was adequately maintained over the number of months of useful life of the property. For the purposes of this paragraph, the useful life of the property shall be the same as that used by corporations for depreciation purposes when computing federal income tax liability; provided, however, that in the case of real property that is not depreciable, the useful life shall be deemed to be 12 months.
(3) Notwithstanding the provisions of this subsection, the maximum amount of credits otherwise allowable in any taxable year to a taxpayer shall not exceed 50 per cent of its excise imposed by this chapter. Any taxpayer entitled to a credit under this subsection for any taxable year may carry over and apply to its tax liability for any subsequent taxable year, not to exceed 5 taxable years, the portion of those credits, as reduced from year to year, which were not allowed under this subparagraph; provided, however, that in no event shall the taxpayer apply the credit in any taxable year in which it has ceased to maintain the remedy operation status or the permanent solution for which the credit was granted.
(4) For the purposes of this section, net response and removal costs shall be expenses paid by the taxpayer for the purpose of achieving a permanent solution or remedy operation status in compliance with chapter 21E. No credit shall be allowed under this section for the amount of state financial assistance received from the Redevelopment Access to Capital program established pursuant to section 60 of chapter 23A or from the Brownfields Redevelopment Fund, established in section 29A of chapter 23G. For the purposes of the Redevelopment Access to Capital program, the amount of state financial assistance shall be calculated as the amount of state funds paid on behalf of the borrower for participation in the program and not the amount of the loan guaranteed but, if the loan guarantee is invoked, any credit taken for the amount of the loan shall be added back as taxes due in the year the loan is paid.
(5) All or any portion of tax credits issued in accordance with this subsection may be transferred, sold or assigned to a taxpayer with a liability under this chapter or chapter 63 or to a nonprofit organization. A taxpayer or nonprofit organization desiring to make a transfer, sale or assignment shall submit to the commissioner a statement which describes the amount of the Massachusetts environmental response action tax credit for which the transfer, sale or assignment of Massachusetts environmental response action tax credit is eligible. The taxpayer or nonprofit organization shall provide to the commissioner appropriate information so that the environmental response action tax credit can be properly allocated. The commissioner shall issue a certificate to the party receiving the environmental response action tax credit reflecting the amount of the tax credit received, a copy of which shall be attached by the party receiving the environmental response action tax credit to each tax return in which the tax credits are used.
(6) The commissioner shall annually, not later than September 1, file a report with the house and senate committees on ways and means, the chairs of the joint committee on community development and small businesses and the chairs of the joint committee on economic development and emerging technologies identifying the total amount of tax credits claimed pursuant to this subsection and the total amount of tax credits transferred, sold or assigned pursuant to paragraph (5) for the preceding fiscal year.
(k) (1) As used in this subsection, the following words shall have the following meanings:—
“Cost-of-housing adjustment”, for any calendar year, the percentage, if any, by which the average assessed value for a single-family home in the commonwealth for the preceding calendar year, as calculated by the department of revenue, exceeds the average assessed value for a single-family home in the commonwealth for calendar year 2004, as reported by the department.
“Cost-of-living adjustment”, for any calendar year, the percentage, if any, by which the CPI for the preceding calendar year exceeds the CPI for calendar year 1999.
“CPI”, the consumer price index for any calendar year as defined in section 1 of the Code.
“Head of household”, as defined in section 2(b) of the Code.
“Real estate tax payment”, the real estate tax levied pursuant to chapter 59 on the taxpayer’s residence and actually paid by the taxpayer during the taxable year, including water and sewer debt service charges assessed pursuant to subsection (n) of section 21C of chapter 59, exclusive of special assessments and delinquent interest, and less any abatement granted. For owners of residential property located in communities which have not exercised the option to assess water or sewer debt service charges pursuant to subsection (n) of section 21C of chapter 59, the real estate tax payment to be considered for purposes of calculating this credit shall also include 50 per cent of the owner’s water and sewer charges actually paid in the taxable year for which the credit is sought. In the case of a multi-unit dwelling, a land area in excess of one acre or a multi-purpose building or land area, the real estate tax payment, including the water and sewer charges as applicable, shall constitute that portion of the real estate tax levied and paid, and that portion of applicable water and sewer charges actually paid, on the entire building or area, which corresponds to the portion of the area or building used and occupied as the residence of the taxpayer, in accordance with procedures established by the commissioner.
“Rent constituting real estate tax payment”, 25 per cent of the rent actually paid by the taxpayer, under a good faith rental agreement, for the right of occupancy of the residence during the taxable year or a portion thereof.
“Residence”, the building or portion thereof, including a mobile home, owned or rented and actually occupied by the taxpayer as the taxpayer’s primary dwelling during the taxable year and located within the commonwealth, together with so much of the land surrounding it, not to exceed one acre, as is reasonably necessary to the use of the dwelling as a home. A residence may consist of a part of a multi-unit or multi-purpose building.
“Taxpayer’s total income”, the sum of the taxpayer’s Part A adjusted gross income, Part B adjusted gross income and Part C adjusted gross income, as defined in section 2, increased by, to the extent they are excluded or subtracted from adjusted gross income, the following: the total amount of income and receipts from social security, retirement, pension, or annuities, cash, but not in-kind, public assistance, tax-exempt interest and dividends, net capital losses deducted pursuant to paragraph (2) of subsection (c) of section 2, net losses in any class of Part C adjusted gross income as defined in subsection (e) of section 2, capital gains deducted pursuant to subparagraph (K) of paragraph (1) of subsection (d) of section 2, income from a partnership or trust not included therein and gross receipts from any other source other than assistance received by this subsection; and reduced by the total amount of the exemptions allowed by subparagraphs (B) and (C) of paragraph (1), subparagraphs (B) and (C) of paragraph (1A), subparagraphs (B) and (C) of paragraph (2), and paragraph (3), of subsection (b) of section 3.
(2) An owner or tenant of residential property located in the commonwealth, who is 65 years of age or older, who is not a dependent of another taxpayer and who occupies said property as his principal residence, shall be allowed a credit equal to the amount by which the real estate tax payment or the rent constituting real estate tax payment exceeds 10 per cent of the taxpayer’s total income, but the credit shall not exceed $750.
(3) The credit shall be available only if:
(i) the taxpayer’s total income does not exceed $40,000 for a single individual who is not the head of a household, $50,000 for a head of household, and $60,000 for a husband and wife filing a joint return; and
(ii) the assessed valuation of the residence does not exceed $600,000.
(4) For a taxable year beginning on or after January 1, 2001 and before January 1, 2005, the income, valuation and credit limits in this subsection shall be increased by amounts equal to such income, valuation and credit limits multiplied by the cost-of-living adjustment for the calendar year in which such taxable year begins. For a taxable year beginning on or after January 1, 2005, the income and credit limits in this subsection shall be increased by amounts equal to such income and credit limits multiplied by the cost-of-living adjustment for the calendar year in which such taxable year begins, and the valuation limit in this subsection shall be increased by an amount equal to such valuation limit multiplied by the cost-of-housing adjustment for the calendar year in which such taxable year begins. If any such increase in an income or valuation limit is not a multiple of $1,000, such increase shall be rounded to the next lowest multiple of $1,000. If the increase in the credit limit is not a multiple of $10, such increase shall be rounded to the next lowest multiple of $10.
(5) No credit shall be allowed for a married individual unless a joint return is filed.
(6) No credit shall be allowed by this subsection with respect to the real estate tax payment or rent constituting a real estate tax payment on more than one residence of any taxpayer during any taxable year, but a taxpayer whose principal place of residence changes during the course of the year may claim a credit for the real estate tax payment or rent constituting a real estate tax payment with respect to each such principal residence actually occupied during the year.
(7) The credit allowed by this subsection shall be allowed against the taxes imposed by this chapter for the taxable year, reduced by the other credits permitted by this section. If the credit exceeds the tax as so reduced, the commissioner shall treat such excess as an overpayment and shall pay the taxpayer, without interest, the amount of such excess. Any person entitled to claim any credit pursuant to this subsection and not otherwise required to file a return under section 6 of chapter 62C may obtain a refund in the amount of such credit by filing a return and claiming a refund.
(8) Any credit provided by this subsection shall not be counted as income in determining eligibility or benefits under any other means-tested assistance program, including but not limited to all such cash, food, medical, housing, energy and educational assistance programs.
(9) No credit shall be provided by this subsection if the state or federal government subsidizes the claimant’s rent through any rental assistance program.
[Subsection (l) applicable as provided by 2005, 158, Sec. 9 as amended by 2007, 63, Sec. 15.]
(l)(1) As used in this subsection the following words shall, unless the context clearly requires otherwise, have the following meanings:—
[Definition of “Motion picture” of paragraph (1) of subsection (l) applicable to tax years beginning on or after January 1, 2007. See 2007, 63, Sec. 16.]
“Motion picture”, a feature-length film, video, digital media project, television series defined as a season not to exceed 27 episodes, or a commercial made in the commonwealth, in whole or in part, for theatrical or television viewing or as a television pilot. The term “motion picture” shall not include a production featuring news, current events, weather and financial market reports, talk show, game show, sporting events, awards show or other gala event, a production whose sole purpose is fundraising, a long-form production that primarily markets a product or service, a production containing obscene material or performances.
“Motion picture production company”, a company including any subsidiaries engaged in the business of producing motion pictures, videos, television series, or commercials intended for a theatrical release or for television viewing. The term “motion picture production company” shall not mean or include any company which is more than 25 per cent owned, affiliated, or controlled, by any company or person which is in default on a loan made by the commonwealth or a loan guaranteed by the commonwealth.
“Massachusetts production expense”, a production expense for the motion picture clearly and demonstrably incurred in the commonwealth.
“Principal photography”, the phase of production during which the motion picture is actually filmed. The term shall not include preproduction or postproduction.
“Production expense” or “production cost”, preproduction, production and postproduction expenditures directly incurred in the production of a motion picture. Said term includes wages and salaries paid to individuals employed in the production of the motion picture; the costs of set construction and operation, editing and related services, photography, sound synchronization, lighting, wardrobe, make-up and accessories; film processing, transfer, sound mixing, special and visual effects; music; location fees and the cost of purchase or rental of facilities and equipment or any other production expense as may be determined by the department of revenue to be an eligible production expense. The term shall not include costs incurred in marketing or advertising a motion picture, any costs related to the transfer of tax credits or any amounts paid to persons or businesses as a result of their participation in profits from the exploitation of the production.
“Secretary”, the secretary of economic development.
[ Paragraph (2) of subsection (l) applicable to tax years beginning on or after January 1, 2007. See 2007, 63, Sec. 16.]
(2) A taxpayer engaged in the making of a motion picture shall be allowed a credit against the taxes imposed by this chapter for the employment of persons within the commonwealth in connection with the filming or production of 1 or more motion pictures in the commonwealth within any consecutive 12 month period. The credit shall be equal to 25 per cent of the total aggregate payroll paid by a motion picture production company that constitutes Massachusetts source income, when total production costs incurred in the commonwealth equal or exceed $50,000 during the taxable year. For purposes of this subsection, the term “total aggregate payroll” shall not include the salary of any employee whose salary is equal to or greater than $1,000,000.
(3) A taxpayer shall be allowed an additional credit against the taxes imposed by this chapter equal to 25 per cent of all Massachusetts production expenses, not including the payroll expenses used to claim a credit pursuant to paragraph (2), where the motion picture is also eligible for a credit pursuant to paragraph (2) and either Massachusetts production expenses exceed 50 per cent of the total production expenses for a motion picture or at least 50 per cent of the total principal photography days of the film take place in the commonwealth.
[Paragraph (4) of subsection (l) applicable to tax years beginning on or after January 1, 2007. See 2007, 63, Sec. 16.]
(4) The tax credit shall be taken against the taxes imposed under this chapter and shall, at the election of the taxpayer, be refundable to the extent provided for in section 6L. Any amount of the tax credit that exceeds the tax due for a taxable year may be carried forward by the taxpayer to any of the 5 subsequent taxable years.
[Subparagraph (i) of paragraph (5) of subsection (l) effective for tax years beginning on or after January 1, 2006 and before January 1, 2013. See 2005, 167, Sec. 5.]
(5)(i) All or any portion of tax credits issued in accordance with this subsection may be transferred, sold or assigned to other taxpayers with tax liabilities under this chapter or chapter 63. Any tax credit that is transferred, sold or assigned and taken against taxes imposed by this chapter or said chapter 63 shall not be refundable. Any amount of the tax credit that exceeds the tax due for a taxable year may be carried forward by the transferee, buyer or assignee to any of the 5 subsequent taxable years from which a certificate is initially issued by the department of revenue.
(ii) An owner or transferee desiring to make a transfer, sale or assignment shall submit to the commissioner a statement which describes the amount of tax credit for which the transfer, sale or assignment of tax credit is eligible. The owner or transferee shall provide to the commissioner information as the commissioner may require for the proper allocation of the credit. The commissioner shall provide to the taxpayer a certificate of eligibility to transfer, sell or assign the tax credits. The commissioner shall not issue a certificate to a taxpayer that has an outstanding tax obligation with the commonwealth in connection with any motion picture for any prior taxable year. A tax credit shall not be transferred, sold or assigned without a certificate.
[There is no paragraph (6) of subsection (l).]
(7) The commissioner, in consultation with the secretary, shall promulgate regulations necessary for the administration of this subsection.
[Subsections (m) and (n) effective until December 31, 2018. Deleted by 2008, 130, Sec. 18. See 2008, 130, Secs. 53 and 54.]
(m)(1) As used in this subsection and in subsection (n), the following words shall, unless the context clearly requires otherwise, have the following meanings:—
“Life sciences”, advanced and applied sciences that expand the understanding of human physiology and have the potential to lead to medical advances or therapeutic applications including, but not limited to, agricultural biotechnology, biogenerics, bioinformatics, biomedical engineering, biopharmaceuticals, biotechnology, chemical synthesis, chemistry technology, diagnostics, genomics, image analysis, marine biology, marine technology, medical devices, nanotechnology, natural product pharmaceuticals, proteomics, regenerative medicine, RNA interference, stem cell research and veterinary science.
“Person”, a natural person, corporation, association, partnership or other legal entity.
“Primarily”, more than 50 per cent.
“Research and development costs”, in-house research expenses within the meaning of section 41(b)(2) of the Internal Revenue Code.
“Taxpayer”, a certified life sciences company or person subject to the taxes imposed by chapters 62, 63, 64H or 64I.
“User fees”, the monetary amount actually paid by a taxpayer to the U.S. F.D.A. that constitutes the fee due upon the submission of a human drug application or supplement pursuant to 21 U.S.C. section 379h(a)(1) for a human drug, the research and development costs of which, were primarily incurred in the commonwealth.
“U.S.F.D.A.”, the United States Food and Drug Administration.
(2) A taxpayer may, to the extent authorized pursuant to the life sciences tax incentive program established by section 5 of chapter 23I, take a credit against the taxes imposed by this chapter in an amount equal to 10 per cent of the cost of qualifying property acquired, constructed, reconstructed or erected during the taxable year and used exclusively in the commonwealth.
Qualifying property shall be tangible personal property and other tangible property including buildings and structural components of buildings acquired by purchase, as defined by section 179(d) of the Internal Revenue Code, as amended and in effect for the taxable year, but not including property that is taxable under chapter 60A; provided, however, that such property shall be depreciable under section 167 of the Internal Revenue Code and have a useful life of 4 years or more. With respect to property which is disposed of or ceases to be in qualified use prior to the end of the taxable year in which the credit is to be taken, the amount of the credit shall be that portion of the credit provided for in this paragraph which represents the ratio which the months of qualified use bear to the months of useful life. If property on which credit has been taken is disposed of or ceases to be in qualified use prior to the end of its useful life, the difference between the credit taken and the credit allowed for actual use must be added back as additional taxes due in the year of disposition; provided, however, if such property is disposed of or ceases to be in qualified use after it has been in qualified use for more than twelve consecutive years, it shall not be necessary to add back the credit, as provided in this paragraph. The amount of credit allowed for actual use shall be determined by multiplying the original credit by the ratio which the months of qualified use bear to the months of useful life. For the purposes of this paragraph, useful life of property shall be the same as that used by the corporation for depreciation purposes when computing federal income tax liability.
A taxpayer taking a credit allowed under this subsection may not take the credit allowed by subsection (g) except to such extent, not to exceed 2 per cent of the cost of any qualifying property, as may be provided in a certification pursuant to said section 5 of chapter 23I.
Nothing in this section shall limit the authority of the commissioner to make adjustments to a taxpayer’s liability upon audit or limit any other legal remedies available to the commissioner or the commonwealth against said taxpayer.
(3) Any taxpayer entitled to a credit under this section for any taxable year may, to the extent authorized pursuant to the life sciences tax incentive program established by said section 5 of said chapter 23I, carry over and apply to its tax for any 1 or more of the next succeeding 10 taxable years, the portion, as reduced from year to year, of those credits which exceed the tax for the taxable year.
(4) The commissioner in consultation with the Massachusetts Life Sciences Center established by section 3 of chapter 23I, shall promulgate regulations necessary for the administration of this subsection; provided, further, that said regulations may provide the adjustment of intercompany prices and elimination of intercompany transactions to ensure that all amounts upon which the credit is based reasonably reflect fair market value; and provided, further, that said regulations shall include provisions to prevent the generation of multiple credits with respect to the same property.
(5) If a credit allowed under this subsection, or such credit as may be allowed under subsection (g) as limited in this subsection, exceeds the tax otherwise due under chapter 62, 90 per cent of the balance of such credit may, at the option of the taxpayer and to the extent authorized pursuant to the life sciences tax incentive program established by section 5 of chapter 23I, be refundable to the taxpayer for the taxable year in which qualified property giving rise to that credit is placed in service. If such credit balance is refunded to the taxpayer, then the credit carryover provisions of paragraph (3), and paragraph (2) of subsection (g), shall not apply.
(n)(1) Except as otherwise limited by subsection (4), a taxpayer may, to the extent authorized pursuant to the life sciences tax incentive program established by said section 5 of said chapter 23I, be allowed a refundable credit against the tax liability imposed under this chapter in an amount equal to 100 per cent of the cost of user fees paid by such taxpayer.
[Paragraph (2) of subsection (n) applicable to user fees paid on or after January 1, 2009. See 2008, 130, Sec. 51.]
(2) A taxpayer shall claim the credit in the taxable year in which its application for the licensure of an establishment to manufacture the human drug in the commonwealth is approved by the U.S.F.D.A.
(3) If a credit allowed to a taxpayer exceeds the tax otherwise due under chapter 62, 90 per cent of the balance of that credit may, to the extent authorized pursuant to the life sciences tax incentive program established by section 5 of said chapter 23I, be refundable to the taxpayer for the taxable year in which the credit is claimed.
(4) The deduction from gross income that may be taken with respect to any expenditures qualifying for the credit under this section shall be disallowed to the extent of the credit.
(5) Only user fees paid by a taxpayer to the U.S.F.D.A. on or after the effective date of this section shall be eligible for the credit.
(o)(1) There shall be established a dairy farmer tax credit program under which a taxpayer who holds a certificate of registration as a dairy farmer pursuant to section 16A of chapter 94 may be allowed a refundable income tax credit based on the amount of milk produced and sold. The credit shall be claimed against the taxes due pursuant to chapter 62. The credit shall be established to offset the cyclical downturns in milk prices paid to dairy farmers and shall be based on the United States Federal Milk Marketing Order for the applicable market such that if the United States Federal Milk Marketing Order price drops below a trigger price anytime during the taxable year such taxpayer may receive the tax credit.
(2) The commissioner of agricultural resources, in consultation with the commissioner of revenue, shall adopt regulations for the implementation, administration and enforcement of this subsection, including the establishment of the trigger price, which shall take into account the operating costs of milk production, including hired labor and some portion of the value of unpaid labor, and the amount of the tax credit which shall be based upon volume of milk production.
(3) The total cumulative value of the credits authorized pursuant to this section and section 38Z of chapter 63 shall not exceed $4,000,000 annually.
(4) If the amount of the credit allowed hereunder exceeds the taxpayer’s liability, the commissioner of revenue shall treat such excess as an overpayment and shall pay the taxpayer 90 per cent of the amount of such excess, without interest. The commissioner of agricultural resources shall certify to the department of revenue whether a dairy farmer claiming credits under this section has met the eligibility requirements provided in this subsection and the amount of credit to which any such eligible applicant is entitled.
[Subsection (p) effective for tax years beginning on and after January 1, 2011. See 2008, 509, Sec. 4.]
(p)(1) As used in this subsection, the following words shall have the following meanings:-
“Bargain sale”, the sale of an interest in real property by a taxpayer at a cost below appraised market value, when a portion of the value of the interest in real property is a qualified donation, as such term is defined herein and which meets the requirements of section 1011(b) of the Internal Revenue Code of 1986, as amended.
“Certified land”, an interest in real property, the donation or bargain sale of which has first been determined by the secretary of environmental affairs to be in the public interest for natural resource protection including, but not limited to, drinking water supplies, wildlife habitat and biological diversity, agricultural and forestry production, recreational opportunities, or scenic and cultural values; provided, however, that the secretary of environmental affairs shall assure that all certified lands are protected in perpetuity.
“Interest in real property”, any right in real property in the commonwealth, with or without improvements thereon, or water including, but not limited to, fee simple, life estate, restriction, easement, covenant, condition, partial interest, remainder, future interest, lease, license, mineral right, riparian right or other interest or right in real property that may be conveyed concerning the power to transfer property.
“Public or private conservation agency”, the commonwealth, or any subdivision thereof, or any municipality, or private nonprofit corporation organized for the purposes of land conservation, which is authorized to do business in the commonwealth, and which has tax-exempt status as a nonprofit charitable organization as described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended.
“Qualified donation”, a donation, or the donated portion of a bargain sale, made in perpetuity of a fee interest in real property or a less-than-fee interest in real property, including a conservation restriction, agricultural preservation restriction or watershed preservation restriction, pursuant to chapter 184, provided that such less-than-fee interest meets the requirements of qualified conservation contributions under section 170(h) of the Internal Revenue Code of 1986.
“Taxpayer”, a taxpayer subject to the income tax under this chapter.
(2) A taxpayer making a qualified donation of certified land to a public or private conservation agency shall be allowed a credit against the taxes imposed by this chapter. The credit shall be equal to 50 per cent of the fair market value of the qualified donation. The amount of the credit that may be claimed by a taxpayer for each qualified donation shall not exceed $50,000.
(3) The fair market value of certified land shall be substantiated by a qualified appraisal, as defined in United States Treasury Regulation section 1.170A-13(c)(3), and shall be prepared by a qualified appraiser, as defined in United States Treasury Regulation section 1.170A-13(c)(5). For any taxpayer to qualify for the credit provided for in subdivision (2), the taxpayer shall at the same time that the taxpayer files a return for the taxable year in which the credit is claimed, file with the department a summary of a qualified appraisal or, if requested by said department, the taxpayer shall submit the appraisal itself.
(4) In any one tax year, the credit used may not exceed the amount of tax liability otherwise owed by the taxpayer. The tax credit shall be taken against the taxes imposed under this chapter and shall not be refundable. Any amount of the credit that exceeds the tax due for a taxable year may be carried forward by the taxpayer to any of the 10 subsequent tax years.
(5) All or any tax credits issued in accordance with this section may be in addition to any charitable deductions claimed on the taxpayer’s federal income tax return for the same qualified donations of certified lands.
(6) Any taxpayer claiming a state income tax or excise tax credit under this section may not claim an additional state income tax credit or deduction during any one tax year for costs related to the same interest in certified lands.
(7) Any tax credits which arise under this section from the qualified donation of certified land by a pass-through tax entity such as a trust, estate, partnership, corporation, limited partnership, limited liability partnership, limited liability corporation, subchapter S organization, or other fiduciary, shall be used either by such entity in the event it is the taxpayer on behalf of such entity or by the member, partner, shareholder, or beneficiary, as the case may be, in proportion to its interest in such entity in the event that income, deductions, and tax liability passes through such entity to such member, partner, shareholder, or beneficiary. Such tax credits may not be claimed by both the entity and the member, partner, shareholder, or beneficiary, for the same conveyance.
(8) Any tax credits which arise under this chapter from the qualified donations of certified land by a married couple shall be used only if the spouses file a joint return, if both spouses are required to file Massachusetts income tax returns. If only one spouse is required to file a Massachusetts income tax return, that spouse may claim the credit allowed by this chapter on a separate return.
(9) The secretaries of energy and environmental affairs and of administration and finance, acting jointly and in writing, shall authorize tax credits under this subsection together with section 38Z of chapter 63 in a cumulative amount, including the current year cost of credits allowed in previous years, that shall not exceed $2,000,000 annually. No credits shall be allowed under this subsection except to the extent authorized as provided in this paragraph. The commissioner of revenue, after consulting those secretaries concerning, among other things, the land conservation objectives of this section, shall adopt regulations governing applications for and other administration of these tax credits.