Taxation in Massachusetts

Updated on Thursday 13th September 2018

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There are varied business entities an entrepreneur from abroad can register in Massachusetts, each of them subject to a different kind of taxation. In order to have a clear idea about how you can open a company in USA, including Massachusetts, you are invited to get in touch with our team of company formation specialists in USA. They can also offer assistance and information about the taxation scheme for companies in Massachusetts.

What is the income tax rate in Massachusetts?

All taxable incomes of companies in Massachusetts are subject to a 5.10% income tax rate. There are no tax brackets, but only a fixed tax rate imposed on revenues registered by businesses in this American state. 

What is the capital gains tax rate in Massachusetts?

The long-term capital gains, the dividends and interests are subject to an income tax rate of 5.10%. As for the short-term capital gains in Massachusetts, these are levied with a 12% rate if they are attained in less than a year.

The sales tax in Massachusetts

The standard sales tax in Massachusetts is set at 6.25% for goods and services purchased in this state. It is good to know that there is no additional sales tax imposed by municipalities in Massachusetts.

Taxes for S corporations in Massachusetts

S corporations in Massachusetts are former traditional corporations which are seen as pass-through entities where the taxable income involves each member that forms the company. Please observe the following tax matters for S corporations:
  • a rate of 1.93% is the corporate excise tax for incomes between $3 million and $9 million;
  • a tax rate of 2.9% is imposed for gross receipts of $9 million or more;
  • the corporate tax is paid individually, depending on the income shares for each member;
  • a tax rate of 5.1% is applicable to the revenues registered by individuals in an S corporation.

We invite you to find out information about how you can start a business in USA from our team of advisors. You can also read the general guide to company formation in Massachusetts, or better yet, you can contact our team of consultants in USA for complete support and assistance.