February 7, 1985
You inquire as to the Massachusetts income tax treatment of income received by Massachusetts nonresidents performing in Massachusetts. The artists are residents of other states or foreign countries who perform in Massachusetts on a temporary or touring basis, performing in Massachusetts on a single occasion or for a month long period. The artists perform as individuals or in groups.
I. Nonresident Taxation
Individuals, partnerships, trusts and unincorporated associations are subject to income taxation under Chapter 62.
Nonresidents of Massachusetts are subject to Massachusetts income taxation on items of gross income from sources within Massachusetts, which are those items derived from or effectively connected with (1) any trade or business, including any employment carried on by the taxpayer in Massachusetts; (2) the participation in any lottery or wagering transaction within Massachusetts; or (3) the ownership of any interest in real or tangible personal property located in Massachusetts. A nonresident is entitled to deductions and exemptions as provided in Chapter 62 only to the extent they relate to or are allowable against income subject to taxation in Massachusetts. (G.L. c. 62, § 5A(a)).
Artists who perform in Massachusetts who are nonresidents of Massachusetts (whether U.S. citizens or aliens) must include in their Massachusetts gross income the amount received for performances which occurred within Massachusetts.
Where a performer receives a specific amount of pay for performances in Massachusetts, that amount is to be included in the performer's Massachusetts gross income. Where no such exact determination of amounts earned in Massachusetts is possible an apportionment of income is made to allocate to Massachusetts a fair and equitable portion of the income earned or derived from the State. For specific rules of nonresident income allocation see Nonresident Income Tax Regulation 830 CMR 2.06 (copy enclosed).
A nonresident with Massachusetts gross income must file a return of such income when it exceeds the lesser of two thousand dollars or the total of his personal exemptions multiplied by the ratio of his Massachusetts income to his total income. (G.L. c. 62C, § 6).
Every employer making payments to employees of wages subject to tax under Chapter 62 must deduct and withhold a tax upon such wages in accordance with tables prepared by the Commissioner. (G.L. c. 62B, § 2). Employers must deduct and withhold income taxes from wages paid to their employees for work done in Massachusetts.
Artists who perform as independent contractors who in any taxable year can reasonably expect to receive income in excess of five hundred dollars taxable under Chapter 62 from sources other than wages subject to withholding must file a declaration of estimated tax for such year. The estimated tax may be paid in full with the declaration or in equal installments on or before April 15, June 15, September 15 and the next January 15. (G.L. c. 62B, § 13).
IV. Taxes Due Other States
Massachusetts grants residents a credit against Massachusetts income taxes for income taxes due other states. (G.L. c. 62, § 6). Conversely a nonresident may be entitled to a credit from his home state for taxes paid to Massachusetts.
V. Corporate Excise
A music, dance or theatrical company that is a domestic or foreign corporation doing business or qualified to do business in Massachusetts is subject to tax under Chapter 63 of the Massachusetts General Laws. Corporations which are exempt for federal income tax purposes under Section 501 of the Code, are exempt from the Massachusetts corporate excise.
Every individual, corporation, partnership, association, trust, estate, organization, society, club, governmental agency or any other entity doing business in Massachusetts must report to the Commissioner annually on or before June first of each year, the names and addresses of all persons to whom it has paid any income subject to taxation during the preceding calendar year and the amount of such income. (G.L. c. 62C, § 8).
Very truly yours,
/s/Ira A. Jackson
Ira A. Jackson
Commissioner of Revenue