355RD: Statement Relating to Research and Development (2024)
Massachusetts · Massachusetts DOR · Used for tax years 2024
Massachusetts Form 355RD is used to seek classification as a research and development corporation for a local property tax exemption on machinery. It reports Massachusetts business activities, research and development receipts and expenditures, and information about property loca
Who files this form
Form 355RD is required only for entities seeking classification as a research and development corporation to claim a local property tax exemption on machinery. The machinery must be in a locality that has adopted the exemption under MGL ch. 59, § 5(16).
To qualify as a research and development corporation, an entity must meet at least one of these requirements:
- More than two-thirds of its Massachusetts receipts come from research and development.
- More than two-thirds of its Massachusetts expenditures are allocable to research and development.
When it's due
For classification for calendar year 2024, the printed instructions require applications to be sent to the Department of Revenue on or before January 31 of that year. Applications sent after January 31 are reviewed for classification for the following calendar year.
The printed instructions say the U.S. Postal Service postmark determines when a mailed application was sent. However, the 2024 form also explicitly requires electronic filing and says paper returns will not be accepted.
What you'll need
Have the following information ready:
- Corporation name, federal identification number, address, phone number, and contact person’s details.
- Principal business activity in Massachusetts and whether research and development is underway. If not, provide its expected start date.
- Massachusetts gross receipts from research and development and from all activities.
- Massachusetts expenditures for research and development, manufacturing, administration, and expenditures excluding manufacturing or administration.
- Descriptions of Massachusetts business activities and research and development performed by employees on your premises or by others on a contract, fee, or other basis.
- The number, type, condition, and original cost of tangible personal property in Massachusetts, plus localities where property qualifies for the local property tax exemption.
If the applicant is an LLC, include a copy of its U.S. Form 8832, Entity Classification Election. Attach additional statements for the activity descriptions if necessary.
How to file
File electronically. The 2024 form and its printed instructions say paper returns will not be accepted. For electronic filing questions, call 617-887-6367 or see the DOR electronic filing and payment requirements.
Complete the corporation details, financial information, and activity descriptions. The form includes a declaration that the information is accurate and complete, with signature and date fields.
The form also prints this mailing address: Massachusetts Department of Revenue, PO Box 7027, Boston, MA 02204. That mailing direction conflicts with the explicit e-file-only warning, so do not treat it as permission to file on paper.
Common mistakes
- Submitting a paper return: The form warns that electronic filing is required and paper returns will not be accepted, even though a mailing address is printed on it.
Questions people ask
Does every research and development business need to file Form 355RD?
No. The printed instructions limit the filing requirement to entities seeking research and development classification for the local property tax exemption on machinery in a locality that has adopted the exemption.
What must an LLC include?
An LLC applicant must include a copy of its U.S. Form 8832, Entity Classification Election.
What if research and development has not started yet?
The form asks you to answer “No” to whether the corporation is presently engaged in research and development in Massachusetts, then enter the date the activity will begin.
Is this classification required for the other tax benefits mentioned in the instructions?
Not necessarily. An entity qualifying under MGL ch. 63, § 42B may be eligible for the Investment Tax Credit and sales tax exemptions on materials and machinery used directly and exclusively in research and development, regardless of whether the Commissioner has classified it as a research and development corporation.