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Massachusetts Mandatory E-filing and corporation changes

Massachusetts is big on taxpayers electronically filing sales tax, payroll tax and income tax returns. In addition, a spanking new corporations law includes a requirement that can best be met online. Here is a GENERAL review of some of the more important new rules. You can find links to more detail below.

Mandatory e-filing expands
GOTTA FILE MASS TAXES VIA THE INTERNET - CORPORATIONS
If your Massachusetts corporation has revenue - not profit, but income from customers or clients - of $100,000 or more, you MUST e-file your 2004 corporation tax return. We at JS+A will be ready to zap your corporate returns to the state next filing season.

GOTTA FILE MASS TAXES VIA THE INTERNET - PARTNERSHIPS
If your Massachusetts partnership has 25 or more partners, it MUST file electronically after January 1, 2005. Likewise, if it has income or a loss of $50,000 or more, it must e-file.

GOTTA FILE ZERO DOLLAR RETURNS VIA THE INTERNET
If you need to file a sales tax or payroll withholding tax return for zero dollars, you MUST do so via the internet. You do this from massdor.gov. Click on Web file for business. You must register with the site before you can use it. If you need help setting this up, let us know.

GOTTA FILE CORPORATE EXTENSIONS ELECTRONICALLY
Most corporations will need to e-file extension requests, too. Again, we can do this for you.

PROBABLY GOTTA FILE SALES AND PAYROLL TAXES ELECTRONICALLY
Once your combined sales tax, payroll tax and room occupancy tax (if you are a hotel) reaches $10,000 for any year, you MUST, for ever after, file your sales and payroll taxes electronically via the DOR website, or via a third-party entity like a payroll service. You MAY file electronically if you collect less than $10,000. Again, you must first register at the state website to use its e-filing service.

New businesses will have to e-file no matter how little they are.

Massachusetts is blazing into the future with these mandates. Unfortunately, we have often found their website to be slow, offline, or inaccurate. There is a fine of up to $100 per return that should have been e-filed but wasn't. It will be considered a legitimate excuse if you try to e-file, but the website won't work. Have fun!

Read more about this from the DOR here.

Corporations MUST have Registered Agents
Starting NOW, all Massachusetts corporations MUST designate a so-called registered office with a registered agent at that office. If you file your annual report for 2004 without this information, it will be sent back and you may be fined for late filing.

There are two ways to designate a registered agent. You can go to the Massachusetts Secretary of State's website at www.sec.state.ma.us/cor and click on "File on-line." To log into the system you need an ID and PIN. The Secretary's office is mailing Massachusetts corporations postcards with these items. But if you do not get a postcard, you can email the state from the website to get this information.

Once there, it is not too painful to find the proper entry screen and log in a registered office and agent.

An officer of the corporation CAN be the agent. For example, I am the agent for my corporation.

The other way to sign up a registered agent is by mail or fax. You can download the form from the website already given. But you will have to pay $25 for the privilege.

There is a good description of this and other changes in the corporation law here. (This is a pdf file and so you must be able to open such files to get much good out of the linked material.)

Let me know if you have more questions about these Massachusetts changes or other tax planning matters as the end of the year approaches!

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Last revised: 11/10/04