BCA: Brownfields Credit Application (2024)

Who files this form

Form BCA is the application for the Massachusetts Brownfields Credit. The credit is available to nonprofit organizations and taxpayers subject to tax under Massachusetts General Laws chapters 62 and 63 who meet the eligibility requirements.

To qualify:

• The applicant must be an eligible person who did not cause or contribute to the release of oil or hazardous material and did not own or operate the site when the release occurred.
• The applicant must not be subject to enforcement action under chapter 21E.
• The property must be owned or leased for business purposes, reported to the Department of Environmental Protection (DEP), and located in an economically distressed area.
• Eligible net response and removal costs must be at least 15% of the property's assessed value before remediation. These costs must be paid to achieve a permanent solution or remedy operation status in compliance with chapter 21E.

When it's due

For the tax year 2024 application, the printed eligibility deadlines are:

• August 5, 2028: The taxpayer must commence and diligently pursue the relevant environmental response actions on or before this date.
• January 1, 2029: Net response and removal costs must be incurred before this date.

The text does not state a deadline for submitting Form BCA.

What you'll need

Submit these items with the application:

• A copy of the Response Action Outcome Report, Remedy Operation Status Report, or Permanent Solution Statement prepared by the Licensed Site Professional hired for the project.
• Documentation of the property's assessed value before remediation.
• The property deed or lease agreement.
• A description of the business purpose for owning or leasing the property, including the current business activity at the site.
• Copies of all correspondence sent to and received from DEP about the property's cleanup and outcome.

Also submit a complete list of eligible costs electronically in a standard database spreadsheet format. Include each invoice date, invoice number, vendor, eligible net response and removal costs, and a brief description of the services provided.

How to file

Complete Form BCA with the applicant and property details, eligible costs, release tracking numbers, remediation outcome, and credit amount requested. Complete the preparer's name, title, date, and signature fields. The declaration states that the information is accurate and complete to the best of the preparer's knowledge, under penalties of perjury.

Include the required supporting documents and submit the eligible-cost list electronically in the required spreadsheet format.

Mail the completed application to:

Massachusetts Department of Revenue

Audit Division

200 Arlington Street, Room 4300

Chelsea, MA 02150

Attn. Brownfields Unit

For application questions or concerns, call the Brownfields Unit at 617-887-6974.

Common mistakes

• Using the wrong format for the cost list. The instructions specifically require an electronic list in a standard database spreadsheet format.
• Including costs that were or will be reimbursed. Costs for which the taxpayer received or anticipates reimbursement are not eligible.
• Failing to subtract certain state assistance. State funds received from the Brownfields Development Fund or Redevelopment Access to Capital (RAC) Program must be deducted from the expense base used for the credit.
• Including ineligible expenses. The instructions exclude items such as landscaping, interest and finance charges, remediation insurance, and ordinary business expenses or capital improvements that would have been incurred without contamination.
• Using a carryover after maintenance stops. A taxpayer cannot apply the credit in a tax year in which it has ceased to maintain the permanent solution or remedy operation status for which the credit was granted.

Questions people ask

How much is the Brownfields Credit?

In general, the credit is either 25% or 50% of eligible net response and removal costs, depending on whether an activity and use limitation has been imposed.

Is there a limit on how much credit I can use?

For chapter 62 taxpayers, the credit used cannot exceed 50% of the tax liability for the taxable year. For business corporations, it cannot exceed 50% of the excise tax for the taxable year or reduce tax liability below the minimum excise, stated as $456 in the text.

Can unused credit be carried forward?

Unused credit may be carried over for up to five succeeding tax years. The taxpayer must continue to maintain the permanent solution or remedy operation status for which the credit was granted.

Can I qualify if I received state financial assistance?

Yes. Assistance from the Brownfields Development Fund or RAC Program does not by itself prevent a claim. However, state funds received from those programs must be deducted from the expense base used to calculate the credit.

Official sources

• https://www.mass.gov/lists/dor-tax-forms-and-instructions