AN ACT RELATIVE TO THE TAX LAWS OF THE COMMONWEALTH.
Whereas , The deferred operation of this act would tend to defeat its purpose, which is forthwith to implement certain changes to the tax laws of the commonwealth, therefore it is hereby declared to be an emergency law, necessary for the immediate preservation of the public convenience.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
SECTION 1. Section 30 of chapter 62C of the General Laws, as appearing in the 2002 Official Edition, is hereby amended by adding the following 2 paragraphs:-
For purposes of this section, a final determination of a change by the federal government includes a closing agreement or accepted offer in compromise under the Code, as amended and in effect for the taxable year, or any similar agreement that results in a change in federal taxable income, whether or not the audit or other review is complete with respect to issues not addressed in the agreement.
The commissioner of revenue may promulgate rules and regulations necessary to implement this section.
SECTION 2. Section 33 of said chapter 62C, as so appearing, is hereby amended by adding the following subsection:-
(g) If after the commissioner has required taxpayers either to prepare or file any required return, document, or information, or to make a required tax payment or estimated payment, by way of a specified automated or electronic means, format, method, or medium, a taxpayer fails to comply with the prescribed method for the filing, data transfer, or payment, the taxpayer shall be considered not to have made the required filing or the required payment. Upon a failure to comply, the commissioner, in addition to other remedies available to him, shall send the taxpayer a notice of improper filing or payment specifying the nonconformity therein, but shall not be required to send the notice for subsequent instances of noncompliance. Thereafter, if the taxpayer, without reasonable cause, fails to conform any filing, data transfer or payment with the method prescribed by the commissioner in tax years beginning on or after January 1, 2005, there shall be added to and become a part of the tax required to be paid a penalty in an amount not greater than $100 for each improper return, document or data transmission, and for each improper payment. The penalty shall be considered assessed by the issuance by the commissioner of a notice to the taxpayer setting out the amount of the penalty, the tax period and tax type affected and the reason for the penalty. No notice of intention to assess, notice of assessment, or any demand for payment shall be required as a prerequisite to the imposition or collection of a penalty imposed under this subsection. A penalty imposed by the commissioner for an improper filing or payment shall be subject to subsection (f) relative to the waiver of penalties.
SECTION 2A. Section 36 of said chapter 62C, as so appearing, is hereby amended by striking out the third paragraph and inserting in place thereof the following paragraph:-
An application for an abatement or a refund of an overpayment of any tax where a return which is required to be filed has not been timely filed, shall be made and filed, along with the overdue return, within 3 years from the date that the return was due to be filed, without regard to extensions, or within 2 years of the date that the tax was paid, whichever is later. An application for an abatement or refund filed beyond those alternate deadlines shall be denied by the commissioner. An application for refund of and overpayment of any tax where no return is required shall be made by the taxpayer within 2 years from the time such tax was paid. An application for an abatement or refund in any other circumstance, including either where no return is required to be filed, or where the return has been filed in a timely manner, shall be made within the periods provided under section 37.
SECTION 2B. Said chapter 62C is hereby further amended by striking out section 39, as so appearing, and inserting in place thereof the following section:-
Section 39. Any person aggrieved by the refusal of the commissioner to abate or to refund any tax, in whole or in part, whether such refusal results from the denial of an abatement application made under section 36 or section 37, may appeal therefrom, within 60 days after the date of notice of the decision of the commissioner or within 6 months after the time when the application for abatement is deemed to be denied as provided in section 6 of chapter 58A, as follows:
(a) appeals from the decision of the commissioner as to the value of an asset of the estate for purposes of chapter 65C shall be made by filing a petition with the clerk of the appellate tax board;
(b) appeals from the decision of the commissioner as to all other matters arising under chapter 65C shall be made by filing a petition with either the clerk of the appellate tax board or the probate court having jurisdiction of the estate of the decedent;
(c) appeals from the commissioner's refusal to abate any other tax or to refund any tax, in whole or in part, whether such refusal results from the denial of an abatement application made under section 36 or section 37, shall be made by filing a petition with the clerk of the appellate tax board. If, on hearing, the board or the court, whichever the case may be, finds that the person making the appeal was entitled to an abatement or a refund, it shall make such abatement or refund as it sees fit. If a tax so abated has been paid, the state treasurer, upon presentation to him of the notice of the decision of the board, or the court, shall repay to the petitioner the amount of the abatement and interest computed in accordance with section 40.
SECTION 3. Section 1 of chapter 63 of the General Laws, as most recently amended by section 12 of chapter 4 of the acts of 2003, is hereby further amended by striking out the definition of "Financial institution" and inserting in place thereof the following definition:-
"Financial institution", (a) any bank, banking association, trust company, federal or state savings and loan association, including all banks for cooperatives organized under the United States Farm Credit Act of 1933, whether of issue or not, existing by authority of the United States, or any state, or a foreign country, or any law of the commonwealth; (b) any other institution, association or entity, the deposits or accounts of which are insured under the Federal Deposit Insurance Act or by the Federal Deposit Insurance Corporation, any institution, association or entity, which is a member of a federal Home Loan Bank, excluding corporations described in section 1 of chapter 171, any other bank or thrift institution incorporated or organized under the laws of a state which is engaged in the business of receiving deposits, any corporation organized under the provisions of 12 USC 611-631 and 12 USC 3101; (c) any corporation subject to chapter 167A, or registered under the Federal Bank Holding Company Act of 1956, or registered as a savings and loan holding company under federal law, but excluding a diversified savings and loan holding company unless it satisfies the definition of a financial institution elsewhere herein, including any subsidiary which participates in the filing of a consolidated return of income to the federal government; (d) any corporation subject to supervision by the division of banks including but not limited to corporations described in section 24 of chapter 93, sections 96 to 104, inclusive, or section 114C of chapter 140; section 38 of chapter 167; section 5 of chapter 167B; chapter 169A; chapter 255B; chapter 255C; chapter 255D; and chapter 255E; or (e) any other corporation organized under the laws of the United States, the commonwealth or any other state or a foreign country which, in substantial competition with financial institutions as defined in any or all of clauses (a) to (d), inclusive, derives more than 50 per cent of its gross income, excluding nonrecurring, extraordinary items, from loan origination, from lending activities, including discounting obligations, or from credit card activities; but, corporations described in section 1 of chapter 171 shall be excluded from the definition of financial institution.
SECTION 4. The definition of "Net income" in said section 1 of said chapter 63, as amended by said section 12 of chapter 4, is hereby further amended by striking out the third sentence and inserting in place thereof the following sentence:- The term "dividends received", as it relates to distribution from a real estate investment trust, as provided in sections 856 to 859, inclusive, of the Code, shall be treated in the same manner as under the Code, as amended and in effect for the taxable year. For purposes of this section, any dividend received directly or indirectly from the real estate investment trust shall not be treated as a dividend. Any dividend received directly or indirectly from a regulated investment company, as provided in sections 851 to 855, inclusive, of the Code, shall not be included as part of the dividends received deduction otherwise available under this section.
SECTION 5. Paragraph 4 of section 30 of said chapter 63 is hereby further amended by striking out the third sentence, inserted by section 14 of said chapter 4, and inserting in place thereof the following 2 sentences:- For purposes of this section, any dividend received directly or indirectly from a real estate investment trust, as provided in sections 856 to 859, inclusive, of the Code, for the taxable year of the trust in which a dividend is paid, shall not be: (i) treated as a dividend; and (ii) included as part of the dividends received deduction otherwise available to the taxpayer under paragraph (1) of subsection (a) of section 38. Any dividend received directly or indirectly from a regulated investment company, as provided in sections 851 to 855, inclusive, of the Code, shall not be included as part of the dividends received deduction otherwise available under paragraph (1) of subsection (a) of section 38.
SECTION 6. Chapter 64D of the General Laws is hereby amended by inserting after section 6A the following section:-
Section 6B. The register of deeds may refuse to record or register any deed, instrument or writing which does not have the stamps required by this chapter, as determined by the register, affixed thereto or to vellum, parchment or paper upon which it is written or printed.
SECTION 7. Section 1 shall be applicable to any closing agreements executed by any person or taxpayer with the Internal Revenue Service on or after January 1, 2004.
SECTION 8. The commissioner of revenue may issue rules or regulations necessary to implement section 2.
SECTION 9. Sections 4 and 5 shall apply to taxable years beginning on or after January 1, 2004.