Single Sales Factor

Massachusetts' Single Sales Factor tax allotment can significantly reduce the tax burden for manufacturers and other qualifying companies.

Massachusetts' Single Sales Factor tax distribution can reduce taxes for manufacturers and other qualifying companies. While many states use a three-factor  formula to determine net income and create a greater burden for businesses, Massachusetts uses only 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 apportionment factor.
  • The Single Sales Factor is the ratio of Massachusetts sales to overall sales.
  • The Massachusetts Single Sales allotment is considered advantageous when compared to many states that use a three-factor system, 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 apportionment only weighs the sales, companies are not penalized for investing or hiring.

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


The Massachusetts Office of Business Development
Phone: 617-973-8600
 

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