2.700 Entity Exempt from Taxation

Entity Exempt from Taxation

2.700

7.3

8.5

9.3

9.6

9.8

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2.701
Exemption of Credit Union Income

Credit unions, which are in effect mutual business organizations, are considered tax-exempt organizations for federal income tax purposes and therefore are generally exempt from the corporate excise, except are taxable on unrelated business income.

Comment: The estimate applies to only state-chartered credit unions.

IRC, §501(c)(14)(A); M.G.L. c. 63, § 30

9.8

2.702
Tax-Exempt Organizations

Corporations considered to be tax-exempt under section 501 of the Internal Revenue Code (such as religious, scientific or educational organizations) are taxable under the corporate excise only on their unrelated business taxable income as defined in section 512 of the Code. They are not taxable on other income and are not subject to the non-income measure or on the minimum excise. This non-taxation creates a tax expenditure.

IRC, § 501; M.G.L. c. 63, § 30

N.A.

2.703
Exemption for Regulated Investment Companies

Regulated Investment Companies are exempt from the corporate excise. This item constitutes a tax expenditure in Massachusetts, though it is not considered a tax expenditure at the federal level.

M.G.L. c. 63, § 68C(8)

N.A.

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