On July 8, 2011, Massachusetts Gov. Deval Patrick signed the $32.5 billion budget for Fiscal Year 2013, which contains no new taxes or fees, amends combined group deduction provisions for corporate income tax purposes, amends certain domicile provisions for personal income tax purposes, requires the Department of Revenue to study the possible implementation of a sales tax exemption for certain medical equipment, provides funding for a sales tax holiday, amends notice requirements regarding the motor vehicle excise tax, and provides for the issuance of electronic bill or tax notifications.
Combined Group Deductions
Certain Massachusetts corporate excise taxpayers that experienced an increase in a combined group’s net deferred tax liability as a result of the enactment of combined reporting requirements for unitary businesses are entitled to a FAS 109 deduction in order to alleviate the potential financial statement impact resulting from the move from separate to combined reporting. The deduction is prorated over the seven-year period beginning with the combined group’s taxable year that begins in 2014 (previously 2013).
Domicile Determination
For personal income tax purposes, the making of a financial contribution, gift, bequest, donation or any other financial instrument or pledge in any amount or the donation or loan of any object, qualifying for deduction as a charitable contribution under IRC §170 to any corporation, foundation, organization or institution, which is exempt from taxation under IRC §501(c)(3), may not be used in any manner to determine domicile in Massachusetts or any other jurisdiction.
Sales Tax Exemption Study
The Department of Revenue, in conjunction with the Executive Office of Health and Human Services, is required to investigate and report on the feasibility and costs of implementing a sales tax exemption for any medical equipment deemed medically necessary and prescribed by a physician. The department must report its findings and recommendations, together with drafts of legislation necessary to carry those recommendations into effect, by December 31, 2012.
Sales Tax Holiday Funding
The governor filed a supplemental spending plan along with the FY13 budget that includes funding for a sales tax holiday this year. Legislation authorizing a 2012 sales tax holiday has not been passed yet.
Motor Vehicle Excise Tax Notices
The measure removes the requirement that all tax notices sent to owners of vehicles notifying them of the amount of the motor vehicle excise tax due and the due date indicate the owner’s license to operate number as appearing on the registration application, renewal application or amended registration.
Electronic Tax Bills and Notices
The tax collector may issue an electronic bill or notice for any other tax, excise, betterment or assessment committed by the assessors under an established voluntary electronic billing program. The electronic bill or notice must meet the standards required by law for such tax, excise, betterment or assessment bills or notices.
H.B. 4200 , Laws 2012, effective July 1, 2012; Press Release, Massachusetts Office of the Governor, July 8, 2012; Budget Summary, Office of the Governor, July 7, 2012
