830 CMR, § 62C.30A.1

Current through Register 1533, October 25, 2024

Section 62C.30A.1 - Changes in Tax Due to any Other United States or Canadian Jurisdiction

(1)Statement of Purpose; Application; Organization.

(a) The purpose of 830 CMR 62C.30A.1 is to describe the requirements and procedures for a Massachusetts resident taxpayer to report and adjust the tax due to the Commonwealth after a change in tax due to any other United States state, territory or possession or the Dominion of Canada or any Canadian province, when such tax was or may be the basis for a credit claimed by the Massachusetts resident taxpayer under M.G.L. c. 62, § 6(a). See M.G.L. c. 62C, § 30A.

(b)830 CMR 62C.30A.1 applies to taxes imposed under M.G.L. c. 62.

(c)830 CMR 62C.30A.1 is organized as follows:

1. Statement of Purpose; Application; Organization

2. Definitions

3. Reporting State Change

4. Date of Assessment with Respect to State Change; Determination of Amount of Assessment with Respect to State Change

5. Taxpayer Offset of Tax Due

6. Amended Returns with Respect to State Change

7. Penalties and Interest

(2)Definitions. For the purposes of 830 CMR 62C.30A.1 only, the following terms shall have the following meanings:

Abatement, a reduction of an amount of tax that equals the difference between the amount of tax assessed as a result of an assessment or deemed assessment and the lower amount of tax properly due.

Another Jurisdiction or Other Jurisdiction, any state other than Massachusetts, or any territory or possession of the United States, or the Dominion of Canada or any of its provinces.

Another Jurisdiction's Tax Determination, an action taken under the law of another jurisdiction, that establishes that a taxpayer's tax owed to that jurisdiction is different from the tax previously paid, when such tax was or may be the basis for a credit claimed under M.G.L. c. 62, § 6(a). With regard to partnerships or flow-through entities, "another jurisdiction's tax determination" includes actions that affect partnership or entity items.

Assessment Records, the official records of the Department that indicate the amount of tax due and assessed by the Commissioner.

Commissioner, the Commissioner of Revenue or the Commissioner's designee duly authorized to perform the duties of the Commissioner.

Department, the Department of Revenue.

Duly Filed, filed correctly and completely in the manner prescribed by the Commissioner.

Credit, the amount allowed pursuant to M.G.L. c. 62, § 6(a) against taxes imposed under M.G.L. c. 62.

Final Determination, or State Change, another jurisdiction's tax determination where there is no right of administrative or judicial appeal. If a taxpayer has a right of appeal from another jurisdiction's tax determination, the determination will be deemed final, for a taxpayer with a right of appeal, if no appeal is taken. Another jurisdiction's tax determination is final on the date of decision in the court of last resort. Another jurisdiction's tax determination made judicially is deemed final on the date that the right to any further appeal expires if the appeal is not carried to the court of last resort.

Offset.

(a) a reduction, proposed by the taxpayer at the time of the report of state change, in the amount of payment of Massachusetts tax owed by a taxpayer after a state change, subject to the Commissioner's approval; or

(b) a reduction by the Commissioner in the amount of an abatement requested as a result of a state change.

Tax or Taxes , any tax imposed under M.G.L. c. 62, and any interest or penalties imposed under M.G.L. c. 62C and treated as additional tax.

Taxpayer, any individual, trust, estate, or any other fiduciary subject to taxation under M.G.L. c. 62.

(3)Reporting State Change. A taxpayer subject to taxation under M.G.L. c. 62 must report a final determination resulting in a decrease in the tax liability to another jurisdiction, based upon which a Massachusetts credit was claimed, under M.G.L. c. 62, § 6(a), to the Commissioner within one year of the date of notice of that jurisdiction's final determination, accompanied by payment of any additional tax due plus interest. Interest is calculated under the provisions of M.G.L. c. 62C, § 32, from the due date of filing the original return. Offsets do not affect the determination whether Massachusetts tax liability has increased due to a state change.

Effective December 5, 2016, a taxpayer subject to taxation under M.G.L. c. 62 must report a state change to the Commissioner by filing an amended return in the manner prescribed in 830 CMR 62C.26.2 and must submit a copy of the other jurisdiction's agreement, document, or any other report that provides the necessary information illustrating the change in the tax owed to the other jurisdiction.

(4)Date of Assessment with Respect to State Change; Determination of Amount of Assessment with Respect to State Change.

(a) Date of assessment with respect to state change.

1.Taxpayer Self-assessment. The tax is deemed to be assessed with regard to a report of state change under 830 CMR 62C.30A.1(3) at the time when the report of state change is duly filed.

2.Commissioner Deficiency Assessment. For the purposes of 830 CMR 62C.30A.1, the tax is assessed upon the issuance of a Notice of Assessment to a taxpayer, or the entry in the Commissioner's assessment records of an amount due from the taxpayer, if such entry predates the Notice of Assessment.

(b) Determination of assessment amount with respect to state change.

1.Taxpayer Self-assessment. Taxes are deemed to be assessed with the taxpayer's calculation and declaration of the tax due, as provided under M.G.L. c. 62C, § 26(a), reported as prescribed by the Commissioner by the taxpayer or the taxpayer's representative and duly filed with the Commissioner. The deemed assessment is the amount due before any offsets are claimed by the taxpayer.

2.Deficiency Assessment by the Commissioner.

a. If the Commissioner determines from the taxpayer's report of state change or upon investigation that, as a result of the change in tax liability to another jurisdiction and consequent change in the Massachusetts tax credit claimed by the taxpayer, the full amount of tax has not been assessed or deemed to be assessed, the Commissioner will assess, notwithstanding the three year limitation in M.G.L. c. 62C, § 26, the full amount of tax with interest, as provided in M.G.L. c. 62C, § 32, from the due date of the original return. Any assessment under 830CMR 62C.30A.1(4)(b) 2. will be made in the manner provided in 830 CMR 62C.26.1.

b.Limitation Period for Assessment. The Commissioner will make any deficiency assessment within one year of receiving a taxpayer's report of state change, as provided in 830 CMR 62C.30A.1(3). If no report of state change is filed as provided in 830 CMR 62C.30A.1(3), the Commissioner will make any deficiency assessment within two years of receiving information from the other jurisdiction that it has made a final determination of a taxpayer's tax liability that is less than originally reported.

c.Limitation on Items Assessed. Any assessment made under 830 CMR 62C.30A.1(4)(b)2. is limited to changes in a taxpayer's tax liability directly attributable to changes, adjustments, or corrections to the taxpayer's tax owed to another jurisdiction resulting in a final determination.

(5)Taxpayer Offset of Tax Due.

(a)General. When a taxpayer reports a change in tax liability to another jurisdiction and consequent change in the Massachusetts tax credit claimed by the taxpayer that results in additional tax due to Massachusetts, the taxpayer may propose that the additional tax be offset based on issues for the same tax year that are unrelated to the state change by attaching an application justifying the offset, with worksheets as necessary, to the report of state change. The additional tax due as a result of the state change may not be offset below zero. Any statement or worksheet attached to the taxpayer's report is considered part of the report of state change.

(b)Procedure. The reporting and offsetting procedure is as follows:

1. A taxpayer must report state changes as provided in 830 CMR 62C.30A.1(3). The taxpayer must report changes in Massachusetts tax resulting from the change in another jurisdiction's tax liability and consequent change in the Massachusetts tax credit claimed by the taxpayer without offsets.

2. To offset any increased taxes for the taxable year in which the state change applies, the taxpayer must request an offset amount and attach a statement justifying the offset to its report of state change. The taxpayer may attach worksheets illustrating the tax effect and showing the revised amount after offsets have been taken into account.

3. The Commissioner will make an assessment of the tax, as provided in 830 CMR 62C.30A.1(4), based upon the report of state change. The Commissioner will determine the taxpayer's balance due, taking into consideration the taxpayer's offset request, including the taxpayer's statement and worksheets justifying the proposed offsets.

(6)Amended Returns with Respect to State Change.

(a)General Rule. Effective December 5, 2016, if, as a result of the change in tax liability to another jurisdiction and consequent change in the Massachusetts tax credit that was or may be claimed by the taxpayer, a taxpayer believes that a lesser tax was due the Commonwealth than was assessed or paid, the taxpayer shall file an amended return reporting, in the manner prescribed by the Commissioner in 830 CMR 62C.26.2, the amount of tax overpaid as a result of the other jurisdiction's change and the amount of the claimed overpayment, accompanied by a copy of the other jurisdiction's revenue agent's report, agreement, document, or any other report illustrating the changes in the other jurisdiction's tax. The taxpayer's amended return is limited to changes in the taxpayer's Massachusetts tax liability directly attributable to changes, adjustments, or corrections to the taxpayer's tax owed to the other jurisdiction resulting in a final determination from that jurisdiction.

(b)Limitation Period for Amended Returns. Amended returns reporting state changes under 830 CMR 62C.30A.1 shall be filed within one year of the date of the notice to the taxpayer of final determination by the other jurisdiction.

(c)Limitation on State Change Amount. Any reduction in tax shown on an amended return as a result of a state change under M.G.L. c. 62C, § 30A is limited to the reduction in Massachusetts taxes that results from the other jurisdiction's change.

(d)Substantiation. The taxpayer shall, at the time of filing its amended return, include and attach to it all supporting information, documents, explanations, arguments and authorities that will reasonably enable the Commissioner to determine whether the taxpayer is entitled to the reduction in tax requested. In certain instances an amended return showing a reduction in tax may be treated by DOR as an application for abatement and will be subject to the substantiation requirements set forth in 830 CMR 62C.37.1(6).

(e)Commissioner Offsets. The Commissioner may offset the amount of any overpayment resulting from a state change with any additional tax due whether or not the additional tax is based on issues related tothe change. Offsets based on issues unrelated to the change may reduce or eliminate the abatement, but any such offset shall not give rise to a net amount of tax due based on an assessment that would otherwise be barred as untimely. Any refund resulting from a state change is also subject to intercept.

(f)Correlation with Limitation Period for Amended Returns under M.G.L. c. 62C, §§ 36 and 37. Notwithstanding the rules under M.G.L. c. 62C, § 30A, and 830 CMR 62C.30A.1(6)(a) through (d), supra, a taxpayer may file an amended return seeking a reduction in tax, including tax paid as a result of a change in tax paid to another jurisdiction, in accordance with the limitations provided in M.G.L. c. 62C, §§ 36 and 37.

(7)Penalties and Interest.

(a)Imposition. Any taxpayer that fails to timely submit a report of state change under 830 CMR 62C.30A.1(3) or pay any additional tax due plus interest will be assessed a penalty of 10% of the additional tax due in addition to any other applicable interest and penalties. The penalty becomes a part of the additional tax due. Penalties and interest may apply to amounts claimed as offsets that are disallowed by the Commissioner.

(b)Abatement of Penalties. The Commissioner may abate for reasonable cause any penalties imposed under 830 CMR 62C.30A.1(7). A taxpayer seeking an abatement of any penalties must present specific facts establishing that its failure to submit a timely report of state change, as required by 830 CMR 62C.30A.1(3), was due to reasonable cause. A mere assertion, by affidavit or otherwise, that taxpayer's failure to timely file a report of state change was reasonable or excusable due to oversight or inadvertence is insufficient to establish reasonable cause.

(c) Interest payable by taxpayers on additional amount due resulting from state change. Interest for a taxpayer duly filing a report of state change will be calculated based on the balance due after offsets have been taken into account. Interest on the balance due amount will accrue from the due date of the original return as provided under M.G.L. c. 62C, § 32(b).

(d)Interest Payable by Commissioner. The Commissioner will pay interest on overpayments resulting from a state change, reduced for any offsets made by the Commissioner, calculated from the date of receipt of a duly filed report of state change, at the rate provided for overpayments.

830 CMR, § 62C.30A.1

Amended by Mass Register Issue 1307, eff. 11/30/2015.

Amended by Mass Register Issue 1333, eff. 12/5/2016.