With just a week to go unto the legislative session resets, accountants are pushing the House Ways and Means Committee to advance a state tax code change that they say will reduce uncertainty for taxpayers and tax collectors, and avoid millions in extra costs to businesses.

Changing the tax filing deadline for certain corporations to mirror a recent change in the federal tax code would help give state budget managers a better idea of what the state will collect in revenue, and not passing the bill would mean a higher cost of compliance for Massachusetts companies, the Massachusetts Society of Certified Public Accountants said.

Under the new federal structure, filings for partnerships and S corporations are due March 15 and individual and C corporation returns are due on April 15. But Massachusetts is one of four states that does not conform to the new federal due dates, instead requiring C corporations to file with S corporations on March 15.

“Now your partnership returns are due in March and those feed into the actual or individual returns, which are due a month later,” Amy Pitter, president and CEO of the MSCPA, said. “So the feds made it better and 46 states so far have conformed so their taxpayers will get the benefit of that more sensible flow of returns.”

The bill that would bring the Massachusetts deadlines into lockstep with the federal deadlines has been pending before the House Ways and Means Committee for almost eight weeks. Pitter sent a letter to the committee earlier this month in an attempt to compel action on it.

Because individuals and C corporations would have all the information from the March 15 filings, their own filings will be more accurate and more likely completed on time, Pitter said. Fewer returns being filed using estimated figures, she said, ultimately will give the state a clearer picture of revenue collection.

“Predictability is really good and this adds a level of unpredictability,” Pitter, a former state commissioner of revenue, said. “It’s hard to budget when you don’t know what the numbers are.”

Pitter said MSCPA members are getting concerned that the bill might not be passed by next week, when all unadopted bills are wiped away and thousands of new bills will be filed and refiled. Last week alone, she said, MSCPA members sent more than 300 emails on the topic.

Zach Donah, MSCPA’s director of government affairs, said he has been in touch with the Ways and Means Committee staff to try to work through any concerns about the bill before time runs out on the legislative session.

Though adopting the federal deadlines would not change the net amount of revenue collected by the state, the shift could change when that revenue is collected. For example, a company whose tax year ends in March would have until mid-July to file and pay its taxes instead of mid-June, meaning that revenue would be counted in the next fiscal year.

Donah said changing the state’s tax filing deadlines now could result in a lower-than-budgeted revenue collection total for Fiscal Year 2017, as some money gets bumped into fiscal 2018.

“Budget writers at House Ways and Means trying to craft what next fiscal year’s budget might look like knowing there is a potential hit to this fiscal year’s revenue is not a great prospect,” Donah said. “But we’re trying to communicate that the revenue impact of not doing this could be greater than the revenue impact of doing it.”

If Massachusetts does not change its tax filing deadlines to match the federal deadlines, Pitter said, local businesses could have to pay about $1,000 more to have their tax returns completed and filed because CPAs would have to do extra filings and calculations to reconcile their estimated and actual returns.

Revenue Committee co-chairs Rep. Jay Kaufman and Sen. Michael Rodrigues filed the original bill in October, and House Ways and Means has had custody of it since the first week in November.

Committee Chairman Rep. Brian Dempsey was not available Friday or Tuesday to discuss the legislation with the News Service, but a committee spokesman said the committee is “continuing to collect information and assess the impacts of the proposed legislation.”

Bills that do not pass by Jan. 3 must be re-filed in the new legislative session and must start the committee vetting process all over again. The House and Senate continue to advance bills during lightly attended informal sessions.

MA Among Few States That Has Not Adopted Fed Tax Deadlines

by State House News Service time to read: 3 min
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