Business Overview
Massachusetts features a knowledge-based economy with world-class strengths in biotechnology, education, healthcare, and finance. The state’s innovation ecosystem includes renowned universities, venture capital networks, and research centers that drive economic development and technological advancement.
Key Facts & Figures
| Category | Details |
| Capital | Boston |
| Major Cities | Boston, Worcester, Springfield, Lowell, Cambridge |
| State Sales Tax Rate | 6.25% |
| Local Sales Tax Rate | No local sales tax |
| Corporate Income Tax | 8.25% flat rate |
| Physical Nexus Threshold | Physical presence through employees, property, or inventory |
| Economic Nexus Threshold | $100,000 in annual sales |
Did you know?
Massachusetts leads the world in life sciences research and development, with over 1,000 biotechnology and pharmaceutical companies.
Setup & Compliance
Massachusetts business formation involves several state agencies with specific registration requirements.
Starting a Business in Massachusetts:
- Select Your Business Structure: Consider Massachusetts tax implications for different entity types.
- Register Your Business: File formation documents with the Secretary of the Commonwealth.
- Register for Tax Accounts: Register with the Department of Revenue for sales tax and withholding.
- Obtain Required Licenses: Research and secure necessary state and local business licenses.
- Register as an Employer: Register with the Department of Unemployment Assistance if hiring employees.
Key Compliance Considerations:
- Annual Reports: Massachusetts entities must file annual reports with the Secretary of the Commonwealth.
- Sales Tax Collection: Collect and remit 6.25% state sales tax on taxable transactions.
- Corporate Income Tax: C-corporations pay 8% corporate excise tax.
- Paid Family and Medical Leave: Massachusetts employers must participate in the state’s PFML program.
- Industry-Specific Regulations: Various professions and industries require specialized licensing through state boards.
Hiring & Payroll
Massachusetts has some of the strongest worker protections in the nation.
Massachusetts Payroll Requirements:
- Unemployment Insurance: Rates from 0.94% to 14.37% on first $15,000 of wages.
- State Income Tax Withholding: Flat 5% of taxable wages.
- Paid Family and Medical Leave (PFML): Contribution rate of 0.68% of eligible wages split between employer and employee.
Massachusetts Employment Laws:
- Minimum Wage: $15.00 per hour ($6.75 for tipped employees).
- Sick Leave: Employers with 11+ employees must provide up to 40 hours of paid sick leave annually.
- Pay Equity Law: Prohibits salary history questions and requires equal pay for comparable work.
- Non-Compete Restrictions: Limited to 12 months and requires garden leave payments.
- Massachusetts is not a right-to-work state.
State Incentives
Massachusetts offers extensive economic incentives to attract and retain innovative businesses.
Key Business Incentives:
- Economic Development Incentive Program: Comprehensive tax incentives.
- Research and Development Tax Credit: Supports innovative company development.
- Life Sciences Tax Incentive Program.
Small Business & Startup Support:
- Massachusetts Small Business Development Center: Comprehensive business resources.
- Innovation Vouchers: Support for technology transfer and commercialization.
- Emerging Technology Fund: Support for cutting-edge technology businesses.
Regulatory Considerations
Massachusetts provides a comprehensive regulatory environment supporting innovation.
Key Business Regulations:
- Data Privacy: Advanced laws protecting consumer and business information.
- Environmental Compliance: Stringent regulations supporting sustainable practices.
- Professional Licensing: Mandatory for various high-tech and professional services.
Additional Regulatory Areas:
- Technology and Innovation Sector Compliance.
- Higher Education and Research Industry Regulations.
Business Overview
Massachusetts features a knowledge-based economy with world-class strengths in biotechnology, education, healthcare, and finance. The state’s innovation ecosystem includes renowned universities, venture capital networks, and research centers that drive economic development and technological advancement.
Key Facts & Figures
| Category | Details |
| Capital | Boston |
| Major Cities | Boston, Worcester, Springfield, Lowell, Cambridge |
| State Sales Tax Rate | 6.25% |
| Local Sales Tax Rate | No local sales tax |
| Corporate Income Tax | 8.25% flat rate |
| Physical Nexus Threshold | Physical presence through employees, property, or inventory |
| Economic Nexus Threshold | $100,000 in annual sales |
Did you know?
Massachusetts leads the world in life sciences research and development, with over 1,000 biotechnology and pharmaceutical companies.
Setup & Compliance
Massachusetts business formation involves several state agencies with specific registration requirements.
Starting a Business in Massachusetts:
- Select Your Business Structure: Consider Massachusetts tax implications for different entity types.
- Register Your Business: File formation documents with the Secretary of the Commonwealth.
- Register for Tax Accounts: Register with the Department of Revenue for sales tax and withholding.
- Obtain Required Licenses: Research and secure necessary state and local business licenses.
- Register as an Employer: Register with the Department of Unemployment Assistance if hiring employees.
Key Compliance Considerations:
- Annual Reports: Massachusetts entities must file annual reports with the Secretary of the Commonwealth.
- Sales Tax Collection: Collect and remit 6.25% state sales tax on taxable transactions.
- Corporate Income Tax: C-corporations pay 8% corporate excise tax.
- Paid Family and Medical Leave: Massachusetts employers must participate in the state’s PFML program.
- Industry-Specific Regulations: Various professions and industries require specialized licensing through state boards.
Hiring & Payroll
Massachusetts has some of the strongest worker protections in the nation.
Massachusetts Payroll Requirements:
- Unemployment Insurance: Rates from 0.94% to 14.37% on first $15,000 of wages.
- State Income Tax Withholding: Flat 5% of taxable wages.
- Paid Family and Medical Leave (PFML): Contribution rate of 0.68% of eligible wages split between employer and employee.
Massachusetts Employment Laws:
- Minimum Wage: $15.00 per hour ($6.75 for tipped employees).
- Sick Leave: Employers with 11+ employees must provide up to 40 hours of paid sick leave annually.
- Pay Equity Law: Prohibits salary history questions and requires equal pay for comparable work.
- Non-Compete Restrictions: Limited to 12 months and requires garden leave payments.
- Massachusetts is not a right-to-work state.
State Incentives
Massachusetts offers extensive economic incentives to attract and retain innovative businesses.
Key Business Incentives:
- Economic Development Incentive Program: Comprehensive tax incentives.
- Research and Development Tax Credit: Supports innovative company development.
- Life Sciences Tax Incentive Program.
Small Business & Startup Support:
- Massachusetts Small Business Development Center: Comprehensive business resources.
- Innovation Vouchers: Support for technology transfer and commercialization.
- Emerging Technology Fund: Support for cutting-edge technology businesses.
Regulatory Considerations
Massachusetts provides a comprehensive regulatory environment supporting innovation.
Key Business Regulations:
- Data Privacy: Advanced laws protecting consumer and business information.
- Environmental Compliance: Stringent regulations supporting sustainable practices.
- Professional Licensing: Mandatory for various high-tech and professional services.
Additional Regulatory Areas:
- Technology and Innovation Sector Compliance.
- Higher Education and Research Industry Regulations.
