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Lawmakers Align State, Federal Tax Deadlines

March 26, 2017
 
By Colin A. Young
STATE HOUSE NEWS SERVICE
 
STATE HOUSE - The $144.4 million supplemental fiscal 2017 budget passed Wednesday by the House and Senate includes an outside section that beginning next year will change tax filing deadlines for certain corporation types so they mirror new federal deadlines -- a state tax code change that MSCPA says will eliminate uncertainty for 
taxpayers and tax collectors.
 
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, creating a workflow in which investors will have information from partnership filings before having to file individual or C corporation returns.
 
Massachusetts is one of two states that does not currently conform to the new federal due dates, instead requiring C corporations to file with S corporations on March 15. Wisconsin is the only other state where the due dates do not conform and the Legislature has taken no action to bring them into alignment, according to the American Institute of CPAs.
 
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, accountants say. Fewer returns being filed using estimated figures will ultimately give the state a clearer picture of revenue collection, they say.
 
House Ways and Means Chairman Brian Dempsey, speaking Wednesday on the House floor about the supplemental budget, said, "a number of you have raised this issue relative to changing the date so the timing coincides with the federal dates."
 
Gov. Charlie Baker included the outside section when he filed his version of the supplemental budget in February and the Ways and Means Committee carried it over into its own version, despite stripping most other policy recommendations Baker included in his original bill, Senate Ways and Means Chairwoman Karen Spilka said.
 
While Baker's original bill was pending, the Department of Revenue announced that it plans to waive late fees racked up due to issues caused by the non-conformity. That administrative change, Donah said, effectively brought the state deadline into lockstep with the federal one for this tax season and gave corporate taxpayers the flexibility to time their state return to their federal return.
 
Last session, a bill filed by the chairmen of the Joint Committee on Revenue to conform Massachusetts filing deadlines with the federal ones died of inaction about two months after it was referred to House Ways and Means, despite MSCPA's lobbying.
 
While adopting the federal deadlines would not have changed the net amount of revenue collected by the state, changing the state's tax filing deadlines in time for this tax season could have resulted in a lower-than-budgeted revenue collection total for Fiscal Year 2017, as some money would have been bumped from the last month of FY 2017 into the first month of fiscal 2018.
 
As long as Baker signs the supplemental spending bill, as he is expected to, the tax code change will go into effect Jan. 1, 2018.
 
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