Massachusetts 2023-2024 Regular Session

Massachusetts Senate Bill S1885 Compare Versions

Only one version of the bill is available at this time.

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1	1	1 of 1
2	2	SENATE DOCKET, NO. 1879 FILED ON: 1/20/2023
3	3	SENATE . . . . . . . . . . . . . . No. 1885
4	4	The Commonwealth of Massachusetts
5	5	_________________
6	6	PRESENTED BY:
7	7	Michael O. Moore
8	8	_________________
9	9	To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
10	10	Court assembled:
11	11	The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
12	12	An Act improving the tax administrative laws of the Commonwealth.
13	13	_______________
14	14	PETITION OF:
15	15	NAME:DISTRICT/ADDRESS :Michael O. MooreSecond Worcester 1 of 7
16	16	SENATE DOCKET, NO. 1879 FILED ON: 1/20/2023
17	17	SENATE . . . . . . . . . . . . . . No. 1885
18	18	By Mr. Moore, a petition (accompanied by bill, Senate, No. 1885) of Michael O. Moore for
19	19	legislation to make certain changes in the administrative tax laws of the Commonwealth.
20	20	Revenue.
21	21	[SIMILAR MATTER FILED IN PREVIOUS SESSION
22	22	SEE SENATE, NO. 1932 OF 2021-2022.]
23	23	The Commonwealth of Massachusetts
24	24	_______________
25	25	In the One Hundred and Ninety-Third General Court
26	26	(2023-2024)
27	27	_______________
28	28	An Act improving the tax administrative laws of the Commonwealth.
29	29	Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
30	30	of the same, as follows:
31	31	1 SECTION 1. Chapter 62C of the General Laws is hereby amended by striking out section
32	32	23A, as appearing in the 2020 Official Edition, and inserting in place thereof the following
33	33	3section:-
34	34	4 Section 3A. In applying the laws referred to in section 2, the commissioner may, in his
35	35	5discretion, disallow the asserted tax consequences of a transaction by asserting the application of
36	36	6the sham transaction doctrine or any other related tax doctrine, in which case the taxpayer shall
37	37	7have the burden of demonstrating that the transaction possessed both: (i) a valid, good-faith
38	38	8business purpose other than tax avoidance; and (ii) economic substance apart from the asserted
39	39	9tax benefit. 2 of 7
40	40	10 In the case of an individual, this section shall apply only to transactions entered into in
41	41	11connection with a trade or business or an activity engaged in for the production of income.
42	42	12 This section is not intended to alter the tax treatment of basic business transactions that
43	43	13have been respected at common law, merely because the choice between meaningful economic
44	44	14alternatives is based on comparative tax advantages. These basic transactions shall include but
45	45	15not be limited to (1) the choice between capitalizing a business enterprise with debt or equity; (2)
46	46	16the choice between using a corporation organized in Massachusetts or elsewhere; (3) the choice
47	47	17of entity; (4) the choice to enter a transaction or series of transactions that constitute a corporate
48	48	18organization or a reorganization governed for federal income tax purposes by Section 368(a)(1)
49	49	19of the Code; and (4) the choice to use a related-party entity in a transaction, if the arm’s length
50	50	20standards of Section 482 of the Code and of Section 39A of chapter 63 and other applicable
51	51	21concepts are satisfied.
52	52	22 Nothing in this section shall be construed to limit or negate the commissioner’s authority
53	53	23to make tax adjustments as otherwise permitted by law.
54	54	24 SECTION 2. The second paragraph of section 19 of chapter 62C of the General Laws, as
55	55	25so appearing, is hereby amended by striking out the first sentence and inserting in place thereof
56	56	26the following sentence:- An extension of six months for filing any return required by section
57	57	27eleven or twelve shall be allowed any corporation if, in such manner and at such time as the
58	58	28commissioner may prescribe, such corporation files a request, in such form as the commissioner
59	59	29may require, and pays, on or before the date prescribed for payment of the tax, the amount of tax
60	60	30reasonably estimated to be due under this chapter; but this extension may be terminated at any
61	61	31time by the commissioner by mailing to the corporation notice of such determination at least ten 3 of 7
62	62	32days prior to the date for termination fixed in such notice; provided, further that in the case of
63	63	33taxpayer subject to section 32B of chapter 63 that is required to file a return required by section
64	64	3411 or 12, an extension of seven months for filing such return shall be allowed.
65	65	35 SECTION 3. Section 37C of chapter 62C of the General Laws, as so appearing, is hereby
66	66	36amended by adding the following subsection:-
67	67	37 (g) If the commissioner, considering the provisions of paragraph (a), fails to accept an
68	68	38offer of the taxpayer of 35 percent or more of the assessed liability in full in final settlement and
69	69	39the appellate tax board finds for the taxpayer, the commissioner shall pay the taxpayer
70	70	40reasonable attorney fees not to exceed 20 percent of the assessed amount, and any interest
71	71	41otherwise due.
72	72	42 SECTION 4. Section 3 of chapter 63B of the General Laws, as appearing in the 2018
73	73	43Official Edition, is hereby amended by striking out subsection (c) and inserting in place thereof
74	74	44the following subsection:-
75	75	45 (c) For purposes of this chapter, there shall be four required installments for each taxable
76	76	46year, except as otherwise provided by this chapter. The first installment shall be paid on or
77	77	47before the fifteenth day of the third month of the taxable year and shall be equal to 25 percent of
78	78	48the required annual payment; the second installment shall be paid on or before the fifteenth day
79	79	49of the sixth month of the taxable year and shall be equal to 25 percent of the required annual
80	80	50payment; the third installment shall be paid on or before the fifteenth day of the ninth month of
81	81	51the taxable year and shall be equal to 25 percent of the required annual payment; and the fourth
82	82	52installment shall be paid on or before the fifteenth day of the twelfth month of the taxable year
83	83	53and shall be equal to the remaining 25 percent of the required annual payment. Except as 4 of 7
84	84	54otherwise provided in this subsection, the term “required annual payment” shall mean the lesser
85	85	55of:
86	86	56 (i) 90 percent of the tax shown on the return for the taxable year or, if no return is filed,
87	87	5790 percent of the tax for such year, or
88	88	58 (ii) 100 percent of the tax shown on the return of the corporation for the preceding
89	89	59taxable year, or
90	90	60 (iii) 90 per cent of the tax for the taxable year, or
91	91	61 (iv) 90 per cent of the tax that would be required to be shown on the return for the taxable
92	92	62year if the tax were determined by using the income apportionment percentage determined for
93	93	63the preceding taxable year under chapter 63.
94	94	64 Clause (ii) shall not apply if the preceding taxable year was not a taxable year of twelve
95	95	65months or the corporation did not file a return for such preceding taxable year showing a liability
96	96	66for tax. Clause (ii) shall not apply in the case of a large corporation, as defined in section sixty-
97	97	67six hundred and fifty-five (g) of the Internal Revenue Code of the United States, as amended on
98	98	68January first, nineteen hundred and eighty-nine and in effect for the taxable year except for
99	99	69purposes of determining the amount of the first required installment for any taxable year;
100	100	70provided, however, that any reduction in such first installment by reason of this provision shall
101	101	71be recaptured by increasing the amount of the next required installment by the amount of such
102	102	72reduction.
103	103	73 SECTION 5. Section 1 shall take effect at the same time as section 10 of chapter 4 of the
104	104	74acts of 2003 took effect. 5 of 7
105	105	75 SECTION 6. (a) Notwithstanding any general or special law to the contrary, the
106	106	76commissioner of revenue shall establish a tax amnesty program for all taxes collected during
107	107	77which period all penalties that could be assessed by the commissioner shall be waived without
108	108	78the need for any showing by the taxpayer of reasonable cause or the absence of willful neglect
109	109	79for the failure of the taxpayer to: (i) timely file any proper return for any tax type and for any tax
110	110	80period; (ii) file proper returns which report the full amount of the taxpayer's liability for any tax
111	111	81type and for any tax period; (iii) timely pay any tax liability; or (iv) pay the proper amount of any
112	112	82required estimated payment toward a tax liability. The waiver of a taxpayer’s liability under this
113	113	83section shall apply if the taxpayer files returns, makes payments as required by the commissioner
114	114	84or otherwise comes into compliance with the tax laws of the commonwealth as required by the
115	115	85commissioner pursuant to the tax amnesty program.
116	116	86 (b) The amnesty program shall be established for 2 consecutive months within fiscal year
117	117	872018 to be determined by the commissioner, such period to expire not later than June 30, 2018,
118	118	88and all required payments shall be made on or before June 30, 2018, in order for the amnesty to
119	119	89apply. If a taxpayer fails to pay the full liability before June 30, 2018, the commissioner shall
120	120	90retain any payments made and shall apply those payments against the outstanding liability, and
121	121	91the provisions of the tax amnesty program shall not apply.
122	122	92 (c) The commissioner's authority to waive penalties during the amnesty period shall not
123	123	93apply to any taxpayer who, before the start date of the amnesty program selected was the subject
124	124	94of a tax-related criminal investigation or prosecution.
125	125	95 (d) The commissioner may offer tax amnesty to those taxpayers who have either an
126	126	96unpaid self-assessed liability or who have been assessed a tax liability, whether before or after 6 of 7
127	127	97the filing of a return, which assessed liability, remains unpaid. The amnesty program shall
128	128	98authorize the waiver of interest, or any amount treated as interest, as further provided in this
129	129	99section. No interest shall be due for taxpayers paying in full any self-assessed tax liability. For
130	130	100those taxpayers with an outstanding audit or assessment and in accordance with the
131	131	101considerations outlined in sections 37A and 37C of Chapter 62C of the General Laws: 25 percent
132	132	102of the interest rate as defined in section 32 of Chapter 62C, herein the applicable interest rate, so
133	133	103long as the taxpayer pays in full and final settlement less than 50 percent of the tax liability
134	134	104assessed by the commissioner; 50 percent of the applicable interest so long as the taxpayer pays
135	135	105in full and final settlement more than 50 percent but less than 79 percent of the tax assessed by
136	136	106the commissioner; and if the taxpayer pays in full and final settlement more than 80 percent of
137	137	107the tax assessed, no reduction in the applicable interest rate shall be granted to the taxpayer.
138	138	108 (e) To the extent that a taxpayer within the scope of the amnesty program and wishing to
139	139	109participate in the amnesty program has postponed the payment of an assessment of tax, interest
140	140	110and penalty under the authority of subsection (e) of section 32 of chapter 62C of the General
141	141	111Laws, the taxpayer shall waive in writing all rights under said subsection (e) of said section 32 of
142	142	112said chapter 62C further delay the payment of the tax and interest portions of the assessment.
143	143	113The tax and interest portions of the assessment shall be payable in full from the date of the
144	144	114commissioner's notice of assessment. Upon payment by the taxpayer of the tax and interest of the
145	145	115outstanding assessment, the commissioner shall waive all penalties associated with that
146	146	116assessment. The taxpayer and the commissioner shall then proceed with all administrative appeal
147	147	117rights that the taxpayer wishes to pursue with respect to the assessment.
148	148	118 (f) Amnesty shall not apply to those penalties which the commissioner would not have
149	149	119the sole authority to waive including, but not limited to, fuel taxes administered under the 7 of 7
150	150	120International Fuel Tax Agreement or under the local option portions of taxes or excises collected
151	151	121for the benefit of cities, towns or state governmental authorities.
152	152	122 (g) The commissioner shall maintain records of the amnesty provided under this section
153	153	123including, but not limited to: (i) the number of taxpayers provided with amnesty; (ii) the types of
154	154	124tax liability for which amnesty was provided and, for each type of liability, the amount of tax
155	155	125liability collected and the amount of penalties foregone by virtue of the amnesty program; and
156	156	126(iii) the total outstanding tax liability for amnesty-eligible taxpayers at the conclusion of the tax
157	157	127amnesty program after the collection of all funds under this section. The commissioner shall file
158	158	128a report detailing such information with the clerks of the house of representatives and the senate,
159	159	129the joint committee on revenue, the house and senate committees on ways and means, the
160	160	130minority leader of the house and the minority leader of the senate not later than September 1,
161	161	1312023; provided, however, that such report shall not contain information sufficient to identify an
162	162	132individual taxpayer or the amnesty that an individual taxpayer was provided under this section.
163	163	133 (g) A taxpayer who is eligible for the amnesty program based upon the criteria
164	164	134established by the commissioner and who fails to come forward under the tax amnesty program
165	165	135and make payments before June 30, 2023 shall, in addition to all other penalties provided by
166	166	136chapter 62C of the General Laws, be subject to an additional penalty not to exceed $500 per
167	167	137taxpayer, which shall be calculated and assessed according to rules determined by the
168	168	138commissioner and which may be subject to de minimis or other exceptions that the commissioner
169	169	139may consider appropriate. This penalty shall be subject to said chapter 62C and shall be added to
170	170	140and become part of the tax due. The commissioner may waive the penalty provided by this
171	171	141subsection for reasonable cause as provided in subsection (f) of section 33 of said chapter 62C.