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Determining nexus for Massachusetts Corporate Excise tax purposes

Learn when a corporation has nexus in Massachusetts and is subject to corporate excise tax. Public Law 86-272 information is also included.


A domestic or foreign corporation has a nexus in Massachusetts if it is exercising or continuing its charter or it is actually doing business in Massachusetts

Under Massachusetts law, "doing business," includes every act, power, right, privilege, and immunity exercised or enjoyed in the Commonwealth, as an incident or by virtue of the powers and privileges acquired by the nature of such organizations, as well as, the buying, selling or procuring of services or property.

Examples of activities in Massachusetts that subject corporations to the excise include:

  • Maintenance of a place of business

  • Employment of labor

  • Owning or using any part of its capital, plant or other property

  • Renting, leasing, buying, selling or procuring services or real or tangible property

  • Execution of contracts or exercise or enforcement of contract rights

  • Installation, assembly or servicing of products by the corporation's employees.

For additional information on corporate nexus, please refer to Regulation 830 CMR 63.39.1.

Public Law 86-272

Public Law 86-272 excludes from state net income-based taxation those interstate activities constituting mere solicitation of orders for:

  • Sales of tangible personal property filled by shipment or
  • Delivery from a point outside Massachusetts after orders are sent outside the state for approval or rejection (15 USC sec. 381(a)).

The following are activities that ordinarily fall within the scope of "solicitation" under Public Law 86-272:

  • Activities including advertising related to generating retail demand for manufacturer products or distributor by promoting the products to retailers who order the products from a wholesaler or other middleman

  • Carrying samples only for display or for distribution without charge or other consideration

  • Owning or providing automobiles to sales representatives, as long as the vehicles are used only for solicitation purposes

  • Passing inquiries and complaints on to the home office

  • Incidental and minor advertising

  • Checking customers' inventories for reorder only

  • Maintaining a sample or display area for an total of 14 calendar days or less during the tax year, as long as no sales or other activities inconsistent with solicitation take place;

  • soliciting of sales by an in-state resident representative who maintains No in-state sales office or Place of business; and Training or holding periodic meetings of sales representatives.

Even though a corporation’s activities may be protected by P.L. 86-272, if it otherwise has nexus in Massachusetts (such as having even a single [one] employee based in Massachusetts), it will be liable for the non-income measure of the corporate excise and therefore required to file a corporate excise return.  See G.L. 63, § 39, as amended.  See also TIR 08-11, Section V.

For additional information on corporate nexus, please refer to Regulation 830 CMR 63.39.1.

Nexus questionnaire

The Rulings and Regulations Bureau no longer issues nexus determinations because of the difficulty in evaluating complex facts and circumstances that may create nexus. 

You may use the nexus questionnaire to evaluate the activities of your corporation, or if you are requested to complete the questionnaire by the Audit Division, you should return the questionnaire to the requestor.