Code of Massachusetts Regulations
830 CMR - DEPARTMENT OF REVENUE
Title 830 CMR 62.00 - Income tax
Section 62.6W.1 - Cranberry Bog Renovation Credit

Universal Citation: 830 CMR 62.00 MA Code of Regs 62.6W.1

Current through Register 1531, September 27, 2024

(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.

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