Massachusetts Business Trusts - Final Guidance

In order to expedite processing of tax forms, the Commonwealth has made it mandatory for certain taxpayers to file and pay taxes electronically. Effective January 1, 2004, filing returns and documents by electronic means is required of filing entities that remit one or more to the following three categories of taxes:

1. Wage Withholding;
2. Room Occupancy Excise; and /or
3. Sales and Use Tax.

The requirement only applies if the combined tax liability in these three categories exceed $10,000 or more in the preceding year. The Department of Revenue is mailing notices to the effected taxpayers, but you should not rely on receiving the notice. You should review your prior years’ combined tax to determine if you are subject to this new requirement. Filing entities that do not meet the threshold can use the system voluntarily.

If you are using an outside payroll service, they will file your withholding taxes electronically. However, you will need to still register to pay room occupancy tax and/or sales and use tax.

E-File Registration

A filing entity must register for the E-file program, for either mandatory or voluntary participation. The registration procedure can be found at the Webfile for Business quick link at www.mass.gov/dor. To begin the registration process, the filing entity’s contact person will enter the entity’s Federal Identification Number and click on the "Log In" button. The contact person will need to enter the following information:

1. Entity’s address.
2. Entity’s telephone number.
3. Entity’s fax number.
4. Tax Type or types.
5. Banking information including ABA routing number and bank account number.
6. Contact person’s social security number and name.

The department will confirm the information provided and will mail, within ten days, a PIN. At this point you are all set to file and pay your taxes electronically by returning to www.mass.gov/dor, Webfile for Business and entering the entity’s federal Identification Number and PIN.

Zero Returns

In addition, last year (July 1, 2003) the state also instituted all filing entities that remit the above listed taxes, must submit the forms electronically if it owes no tax. This requirement will apply to all filing entities, regardless of the annual tax liability.

Please contact Feeley & Driscoll's Accountants and Consultants by Email or call 1 (888) 875-9770 to learn more.

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