Massachusetts' Single Sales Factor tax apportionment significantly reduces the tax burden for manufacturers and other qualifying companies. The Single Sales Factor adds to the attractive tax environment for businesses in Massachusetts - while many states use a three-factor apportionment formula to determine the net income, creating a greater burden for businesses, Massachusetts only uses a single sales factor apportionment formula.

Eligibility Requirements
The Single Sales Factor may apply to the following types of companies that have multi-state tax filings:

  • Manufacturing companies
  • Qualifying defense contractors
  • Qualifying financial service providers

Terms and Conditions

  • When the Single Sales Factor applies, the net income subject to Massachusetts tax is determined by multiplying the overall net income by the single sales factor apportionment factor.
  • The Single Sales Factor apportionment is the ratio of Massachusetts sales to overall sales.
  • The Single Sales Factor apportionment is considered advantageous in Massachusetts when compared to many states that use a Three-Factor Apportionment, which weighs not only state sales, but also property and payroll as a percent of overall sales, property, and payroll.
  • The Single Sales Factor is also advantageous for companies with significant property and payroll. Since the Single Sales Factor apportionment only weighs the sales, companies are not penalized for investing or hiring.

How to Apply
Forms for Corporate Excise Tax and for Corporate Trust Income Tax Return may help to understand how Income Apportionment works in Massachusetts.

Applicable Regulations

Apportionment of Income

  • 830 CMR 63.38.1: Apportionment of Income
  • 830 CMR 63.38.1(10): Apportionment of Income, Section 38 Manufacturers
  • 830 CMR 58.2.1: Manufacturing Corporations

Comparative Data
State Apportionment of Corporate Income

<strong>Contact Information</strong>

<strong>Contact Information</strong>
The Massachusetts Office of Business Development
Phone: 617-973-8600
Fax 617-973-8554