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Volume 1
- Budget Message
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Volume 2
- Budget Development
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- Operating Transfers
- Local Aid - Section 3
- Outside Sections
- Tax Expenditure Budget
- Appendix A
- Glossary
Deductions from Gross Income
| TAX EXPENDITURE | FY2011 | FY2012 | FY2013 |
|---|---|---|---|
| Deductions from Gross Income | 142.6 | 137.8 | 137.1 |
| item | description | amount |
|---|---|---|
| Deductions from Gross Income | 137.1 | |
| 2.201 |
Charitable Contributions and Gifts Deduction
In computing net income, corporations may deduct charitable donations up to 10% of taxable income computed without the deductions. There is a carryover of excess contributions available for five succeeding taxable years. Origin: IRC, S. 170 (b)(2)(A), (d)(2)(A) Estimate: $46.5 |
46.5 |
| 2.203 |
Net Operating Loss Carry-Over
There has been a statutory expansion of the general NOL carry-forward period from 5 to 20 years for business corporations, for taxable years beginning on or after January 1, 2010. There has also been a change to the calculation of an NOL carry-forward, and for tax years beginning on or after January 1, 2010; all carry-forward losses of an eligible business corporation are to be carried forward on a post-apportioned basis, applying the apportionment percentage of the corporation for the taxable year in which the loss is sustained. Financial institutions, public utilities, and insurance companies are not allowed to deduct NOL. See TIR 10-15 for details: Origin: IRC, S. 172; M.G.L. c. 63, S. 30.5; TIR 10- 15. Estimate: $90.6 |
90.6 |
| 2.204 |
Excess Natural Resource Depletion Allowance
Taxpayers in extractive industries (mining or drilling for natural resources) may deduct a percentage of gross mining income as a depletion allowance ("percentage depletion") even if the cost basis of the property has been reduced to zero. The deduction may not exceed 50% (in some cases, 65%) of net income from the property. In the case of oil and gas, percentage depletion is available only to domestic oil and gas sold by "independent producers" (nonintegrated companies). The excess of the deduction available using the percentage of gross income method of depletion over a depletion deduction based on cost is a tax expenditure. Origin: IRC, S. 613, 613A; M.G.L. c. 63, S. 30.3. Estimate: Negligible |
Negligible |
| 2.205 |
Deduction for Certain Dividends of Cooperatives
Farmers' cooperatives and certain corporations acting as cooperatives may deduct patronage dividends and other amounts from gross income. Cooperatives meeting certain requirements may deduct dividends on capital stock and certain payments to patrons such as investment income. Under generally accepted rules for taxing corporations, the corporation cannot deduct dividends paid to shareholders. Origin: IRC, S. 1381-1388 Estimate: N.A. |
N.A. |
| 2.206 |
Economic opportunity areas; tax deduction for renovation of abandoned buildings
Businesses renovating eligible buildings in Economic Opportunity Areas may deduct 10% of the cost of renovation from gross income. This deduction may be in addition to any other deduction for which the cost of renovation may qualify. To be eligible for this deduction, renovation costs must relate to buildings designated as abandoned by the Economic Assistance Coordinating Council. Origin: IRC, S. 613, 613A ; M.G.L. c. 63, S.38O Estimate: Negligible |
Negligible |
Key:
| ORIGIN | |
| IRC | Federal Internal Revenue Code (26 U.S.C.) |
|---|---|
| M.G.L. | Massachusetts General Laws |
| U.S.C | United States Code |
| ESTIMATES | All estimates are in $ millions. |
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