(1)
Statement of Purpose, Outline of Topics.
(a)
Statement of
Purpose.
830
CMR
62.6W.1 explains the calculation of the
tax credit allowed for qualified renovation expenditures incurred in connection
with the qualified renovation of a cranberry bog. Regulations issued by the
Executive Office of Energy and Environmental Affairs setting forth criteria for
authorizing and certifying the credit may be found at
301 CMR
16.00:
Cranberry Bog Renovation Tax
Credit.
(b)
Outline of Topics.
830
CMR
62.6W.1 is organized as follows:
1. Statement of Purpose, Outline of
Topics
2. Definitions
3. General Rule
4. Claiming the Credit
5. Amount of Credit
6. Credit in Excess of Liability
7. Cumulative Annual Cap
8. Ordering
9. Special Rules Application to Pass-through
Entities
10. Interactions with the
Investment Tax Credit
11. Qualified
Projects by Corporations that File a Combined Report
12. Annual Reporting Requirements
830 CMR 62.6W.1 applies to
qualified renovation expenditures made on or after January 1,
2020.
(2)
Definitions. For
purposes of
830
CMR
62.6W.1, the following terms have the
following meanings, unless the context requires otherwise:
Code. The Internal Revenue Code of the
United States, as in effect for the applicable year.
Commissioner. The Commissioner of
Revenue, or the Commissioner's duly authorized representative.
Credit. The Cranberry Bog Renovation
Credit authorized pursuant to M.G.L. c. 62 § 6(w) and M.G.L. c. 63, §
38II.
Cranberry Bog. An area actively
cultivated for the harvesting or production of cranberries.
Qualified Renovation. The renovation,
repair, replacement, regrading or restoration of a cranberry bog for the
cultivation, harvesting or production of cranberries or any other activity or
action associated with the renovation of an abandoned cranberry bog for
purposes of restoring cranberry production; provided, however, that
Qualified Renovation shall not include the
construction of facilities or structures for the processing of
cranberries.
Qualified Renovation Expenditure. For
the purposes of the administration of the Credit, the term
Qualified Renovation Expenditure shall have the same
meaning as that given to it in
301
CMR 16.02:
Definitions.
Secretary. The Secretary of Energy and
Environmental Affairs.
Taxpayer. Any individual or entity
subject to taxation under M.G.L. c. 62 or M.G.L. c. 63, § 39 and entitled
to take a credit under M.G.L. c. 62, § 6(w) or M.G.L. c. 63, § 38II,
as applicable.
Taxpayer Primarily Engaged in Cranberry
Production. A Taxpayer engaged in agriculture, as defined by
M.G.L. c. 128, § 1A, that generates sales from cranberry production equal
to 50% or more of its total revenue.
(3)
General Rule.
The Secretary may award a credit against the excise imposed pursuant to M.G.L.
c. 63 and the tax imposed pursuant to M.G.L. c. 62 to taxpayers primarily
engaged in cranberry production. To be considered for an award, a taxpayer must
engage in the qualified renovation of a cranberry bog, as that term is defined
in 301 CMR
16.02:
Definitions. The credit is generally equal to 25% of the total
qualified renovation expenses incurred during the taxpayer's taxable year, as
further described in
830
CMR
62.6W.1(4). The credit
is refundable, but it is not transferable. The Secretary shall notify the
Commissioner of the amount of credit awarded to each taxpayer.
(4)
Claiming the
Credit.
(a) To claim the credit a
taxpayer must apply to the Secretary and complete the process described in
301
CMR
16.05:
Authorization Process for
Calendar Tax Credit Years 2023 and Later and
301
CMR
16.06:
Authorization Process for
Calendar Tax Credit Years 2020 to 2022. The Secretary will provide
notice to the Commissioner of the amount of expenditures and the amount of
credit which a taxpayer is authorized to claim, and of the taxable year for
which the taxpayer may claim it.
(b) The Taxpayer must claim the credit on its
annual return filed with the Commissioner. The credit shall be allowed for the
taxable year for which the Secretary notifies the Commissioner of its
certification of the taxpayer's expenditures and the amount of the credit,
irrespective of the date on which notice was provided to the
Commissioner.
(5)
Amount of Credit. The amount of the credit is
determined by the Secretary. The credit is generally equal to 25% of the total
qualified renovation expenses incurred in connection with the qualified
renovation of a cranberry bog during the taxpayer's taxable year. The Secretary
will not approve a credit in excess of $100,000 for any taxpayer for any
taxable year.
(6)
Credit in Excess of Tax Liability.
(a)
Credit is
Refundable. The Commissioner will apply the credit against the
taxpayer's liability as reported on the taxpayer's tax return, as first reduced
by any other available credits, and then refund the balance of the credit to
the taxpayer. The provisions of M.G.L. c. 62C and M.G.L. c. 62D including,
without limitation, provisions allowing offsets of refunds for unpaid tax
assessments, child support obligations, or other applicable obligations also
apply to refunds under
830
CMR
62.6W.1(6). The credit
is not transferable.
(b)
Carry Over of Unused Credit. Alternatively, at the
option of the taxpayer, a taxpayer entitled to claim a credit under M.G.L. c.
62, § 6(w) or M.G.L. c. 63, § 38II for a taxable year may carry over
unused credits and apply such credits against the tax imposed under M.G.L. c.
62 or the excise imposed under M.G.L. c. 63 for any of the succeeding five
taxable years.
(7)
Cumulative Annual Cap. The total cumulative value of
all the credits authorized pursuant to M.G.L. c. 62, § 6(w) and M.G.L. c.
63, § 38II shall not exceed $ 2,000,000 annually.
(8)
Ordering. The
credit may be applied in combination with other credits allowed under M.G.L. c.
62 in any order. Similarly, the credit may be applied in combination with other
credits allowed under M.G.L. c. 63 in any order.
(9)
Special Rules Applicable to
Pass-through Entities.
(a)
Pass-through Entities Not Taxed at Entity Level. A
credit granted to a partnership, a limited liability company, or other
unincorporated business entity taxed as a partnership shall be attributed to
the partners, members or owners, on a pro rata basis or
pursuant to an alternative method agreed upon by the members, provided that the
method would be a permissible method to allocate federal items under Code
Section 704. The total aggregate amount of the credit passed through by such
entity and claimed by its partners or owners shall not exceed $ 100,000 for any
taxable year.
(b)
Pass-through Entities Taxed at Entity Level. Any
subchapter S corporation or unincorporated business entity subject to the
excise imposed pursuant to M.G.L. c. 63 or the tax imposed pursuant to M.G.L.
62 at the entity level in any year may claim the credit allowed under M.G.L. c.
62, § 6(w) or M.G.L. c. 63, § 38II against its entity-level tax.
Alternatively, the credit may be passed through to beneficiaries or to
shareholders in proportion to their interests in the entity, and shall be taken
into account in determining the credit for the taxable year during which the
taxable year of the unincorporated business entity ends. These alternatives are
mutually exclusive. The total aggregate amount of the credit claimed by the
entity or passed through to beneficiaries or shareholders for each qualified
renovation expenditure shall not exceed $100,000 for any taxable
year.
(10)
Interaction with the Investment Tax Credit. The credit
may not be claimed for any property if the investment tax credit made available
under M.G.L. c. 63 § 31A has been claimed with respect to the same
property.
(11)
Qualified Projects by Corporations That File a Combined
Report. A taxpayer that participates in the filing of a
Massachusetts combined report under M.G.L. c. 63, § 32B may apply the
credit against its liability as determined through such filing, and the
taxpayer may share the credit with the other taxable members of the combined
group in accordance with the provisions of
830
CMR
63.32B.2(9).
(12)
Annual Reporting
Requirements. Annually:
(a) the
Secretary shall provide any documentation that the Commissioner may deem
necessary to confirm compliance with the cumulative annual cap in
830
CMR
62.6W.1(7);
and
(b) the Commissioner shall
provide a report confirming compliance with the cap to the Secretary of
Administration and Finance.