Massachusetts has a complicated corporate tax code with different tax rates and tax bases for different industries. We have a corporate excise tax which, generally speaking, is based both on income and net worth. For traditional corporations, the corporate excise tax generally is the sum of an 8.00% tax on income attributable to Massachusetts and a tax of $2.60 per $1,000 of the greater of either taxable Massachusetts tangible personal property or taxable net worth. There is a minimum excise tax for corporations of $456. There are separate taxing regimes for manufacturers, securities corporations, and financial institutions. The type of business structure (traditional C Corporation, Subchapter S Corporation, Limited Liability Company, Partnership or Sole Proprietor) also affects the type and amount of tax to which a company is subject.
The rules for taxation of multistate businesses, including what constitutes the nexus with a state for the purpose of various taxes, further complicate the Massachusetts corporate tax code, as does the mandatory unitary combined reporting requirement on multistate tax filers.
Corporate tax policies are a key cost component of doing business and MTF reviews proposed changes to the state’s corporate tax policies with an eye towards keeping Massachusetts competitive. We also look at the code’s complexity, ease of compliance, and other such issues that can add to tax burdens.