global Tax MA Businesses: Apply for Manufacturing Classification by January 31st to Maximize Tax Benefits January 13, 2025 Don’t miss out on valuable tax savings and exemptions—apply for Massachusetts’ Manufacturing Corporation Classification by January 31st to secure your benefits! Attention MA businesses…with the January 31st deadline fast approaching, it’s crucial to apply for Manufacturing Corporation Classification to take full advantage of tax exemptions and savings. Here’s what you should know ahead of the deadline. Why Apply for Manufacturing Corporation Classification? Being classified as a manufacturing corporation by the Department of Revenue (DOR) comes with significant tax benefits: Local Property Tax Exemptions: All machinery, whether directly used in manufacturing or not, is exempt from local property taxes. Investment Tax Credit: Eligible corporations receive a credit of 3% of their qualified capital expenditures under G.L. c. 63, § 31A. Sales and Use Tax Exemptions: Certain property used in manufacturing or research and development may qualify for exemptions. What businesses qualify? Traditional corporations and LLCs taxed as corporations for federal and Massachusetts purposes can apply. If you’re an LLC, you’ll need to submit documentation from the IRS confirming your corporate election. *Note that partnerships and LLCs taxed as partnerships are not eligible. How do you apply? Applying for manufacturing classification is straightforward but requires attention to detail: Complete Form 355Q Include your corporation’s name, address, date of organization, and federal identification number. Ensure the form is signed by an officer of the corporation. Submit by January 31st Applications received after this date will be considered for the following calendar year. Timely submission is key; if your application is postmarked by January 31st, it will be accepted even if it arrives later. Provide Additional Information if Requested The DOR might ask for more details, including tax returns or access to facilities, to verify manufacturing activities. Once approved, your corporation will be included as a classified manufacturing corporation (“M”) on the Annual List of Corporations Subject to Taxation in Massachusetts (“The Corporations Book”), published on or after April 1st. Maintaining Classification After your initial approval, it’s important to stay proactive. Reapply if your corporation undergoes changes such as: A name change Merger or consolidation Revival after dissolution Withdrawal and re-registration in Massachusetts Significant changes in business activities To remain on the Annual List, submit an Annual Certification of Entity Tax Status via MassTaxConnect by April 1st each year. Bear in mind: The DOR reserves the right to review your classification at any time. If they determine your business no longer qualifies, they’ll send a notice of revocation. In such cases, you can appeal to retain your benefits. By following these steps and staying informed, you can leverage the advantages of manufacturing corporation classification while keeping your operations compliant.
