Massachusetts Small Business Energy Exemption Process Changed

The procedure to qualify for a Massachusetts small business energy sales and use tax exemption has changed.

Process for Qualifying for Small Business Energy Exemption has Changed

As of January 1, 2019, the process for qualifying for a small business energy tax exemption has changed. The process is now automated through MassTaxConnect. For 2019 and later years, small businesses must apply online for an exemption certificate rather than submitting Form ST-13 to their energy provider. The paper Form ST-13 is no longer used.

How Long is the Small Business Energy Exemption Valid?

The energy exemption is valid for two years. All current exemptions are automatically extended through March 31, 2019. Taxpayers must register for their 2019/2020 exemption before their current exemption expires on March 31, 2019.

Third Party Access to Register for Small Business Energy Exemption

A third party can register their client for the exemption if they have access rights to the client’s MassTaxConnect account. The exemption certificate will be mailed to the client. Only the client is able to get a copy of the exemption certificate through MassTaxConnect.

Qualifications for the Small Business Energy Exemption

To meet the requirements for the exemption a qualifying small business must:

– have gross income of less than $1 million in the prior year;

– anticipate a gross income of less than $1 million in the current year;

– have 5 or fewer qualifying employees;

– only use the energy purchased for itself; and

– consider affiliated businesses as one business for purposes of the exemption.

What Does the Tax Exemption Cover?

The tax exemption covers qualifying purchases of gas, steam, electricity and heating fuel.

Release, Massachusetts Department of Revenue, February 12, 2019

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