Guide Disclaimer
This guide is not designed to address all questions that may arise nor to address complex issues in detail.
Nothing contained herein supersedes, alters or otherwise changes any provision of:
- Massachusetts General Laws
- Massachusetts DOR ruling and/or regulations
- Any other sources of the law.
Overview
A corporation that is subject to the tax jurisdiction of Massachusetts is generally required to file returns with DOR. A general business corporation is typically subject to the tax jurisdiction of Massachusetts when it owns or uses property in the state, has employees in the state or is otherwise doing business in the state.
If a corporation is subject to Massachusetts’ tax jurisdiction it is said to have nexus with the Commonwealth. Nexus-creating activities can include regular or systematic visits by employees or representatives of the corporation in Massachusetts, or economic or virtual contacts that exceed a certain dollar threshold.
All corporations that have any type of connection to Massachusetts, should review the Corporate Nexus regulation, to determine whether the corporation is subject to Massachusetts tax jurisdiction.
A corporation that has nexus with Massachusetts is subject to one of several different filing requirements. The applicable filing requirement depends on the type of business the corporation conducts.
Register a Corporation with DOR
MassTaxConnect is DOR's online application for registering, filing and paying taxes.
To register as a corporation, you will need:
- Employer Identification Number (EIN/FEIN)
- Start date of the corporation
- Legal and mailing addresses
- Contact information for owners/officers including their
- Titles and Social Security numbers.
To learn more, go to Register Your Business with MassTaxConnect.
Tax Law Changes
In October 2023, “An Act to Improve the Commonwealth’s Competitiveness, Affordability, and Equity,” St. 2023, c. 50, was passed to provide various tax changes for personal income and corporate excise taxpayers. This web page provides an overview of these changes. DOR intends to provide further guidance explaining the Massachusetts tax impact of the legislation.
To learn more, go to 2023 Massachusetts Tax Cuts Legislation.
Also see, 2023 Personal Income and Corporate Excise Tax Law Changes
E-filing Requirements
Corporations are required to file returns and pay taxes electronically.
Go to DOR e-filing and payment requirements for more information. Also see TIR 21-9.
When filing and paying, you will find practical calculation advice in the following forms and instructions:
Return Due Dates & Extensions
Corporate excise returns are due on the 15th day of the third month (for S corporations) or fourth month (for C corporations, including security corporations, financial institutions and insurance companies) after the end of the corporation's taxable year. Extensions may be available.
Go to DOR Tax Due Dates and Extensions for information on due dates for filing returns, and information on allowable extensions.
Estimated Payments
All corporations that reasonably estimate their corporate excise to be in excess of $1,000 for the taxable year are required to make estimated tax payments to Massachusetts.
Go to Corporate Excise tax estimated payments for more information.
Deductions & Credits
Corporations subject to tax in Massachusetts may be eligible for state-specific deductions from income in calculating the excise and may also be eligible for credits against the calculated tax amount.
For a comprehensive resource setting forth these deductions and credits, please refer to the DOR's Legal Library.
Within the legal Library, go to DOR Regulations, under 63.00: Taxation of Corporations, where you will find the regulations that pertain to calculating the corporate excise.
General Business Corporations
Massachusetts General Laws chapter 63, section 39 imposes an excise on a general business corporations. The excise includes an income measure and a non-income measure, and also a minimum excise that applies when those two measures combined are below a certain dollar measure for a taxable year.
Calculating and Paying the Corporate Excise
Income Measure
If a corporation is subject to the income measure of the corporate excise, it must determine its net income as set forth in Massachusetts General Laws chapter 63, section 30.4. The calculation of net income starts with federal gross income minus most federal deductions. Corporate tax credits are determined separately under Massachusetts law and federal tax credits do not apply in determining the Massachusetts income measure.
Go to DOR's Legal Library to learn which deductions and credits a corporation is permitted to take.
Within the legal Library, go to DOR Regulations, under 63.00: Taxation of Corporations, where you will find the regulations that pertain to calculating the corporate excise.
You will find practical calculation advice in the forms and instructions.
Rules for Apportioning Income
A general business corporations that is subject to tax in Massachusetts and at least one other state is required to determine the part of their income that is subject to tax in Massachusetts by following applicable allocation and apportionment rules. There are several sources to review in determining whether an item of income is “allocated” to Massachusetts, and thus fully included in the income subject to tax, or is “apportioned,” that is, divided among the states in which the corporation is taxable. There are different sets of apportionment rules depending on the type of corporation.
Most business corporations are subject to the general Apportionment of Income regulation.
Industry-specific apportionment rules apply to certain corporations:
- Airlines
- Motor Carriers
- Courier and Package Delivery Services
- Mutual Fund Service Corporations
- Pipeline companies
- Electric Industry
- Telecommunications Industry.
Non-income Measure
In determining its non-income measure, a corporation must first perform a calculation to see whether it is a tangible property corporation or an intangible property corporation. These calculations are generally based on the relative amounts of the corporation’s tangible and intangible assets. The calculations are described in Massachusetts General Laws chapter 63, sections 10 and 11, and the instructions used in filling out schedule B of the corporate excise returns in the 355 series for general business corporations. After classification as a tangible or intangible property corporation, there are specific tax rates that apply to the corporation’s property or net worth, which you will find on the returns and in the instructions.
Security Corporations
A corporation that conducts no business activities other than holding securities issued by unrelated entities may apply to DOR for and receive Security Corporation Classification. A security corporation is subject to an excise based on its gross income, and also to a minimum excise that applies when that measure is below a certain dollar threshold for a particular taxable year. See the forms and instructions for Massachusetts Form 355SC.
Go to Regulation 830 CMR 63.38B.1, for rules related to the classification of security corporations.
Financial Institutions
Massachusetts General Laws chapter 63, sections 2 and 2B impose an excise on financial institutions that consists of an income measure and a minimum excise that applies when the income measure is below a certain dollar measure for a taxable year. The forms and instructions provide practical guidance on how to perform these calculations. Special nexus and apportionment rules apply to financial institutions, and are set forth in the statute itself.
For current forms, go to DOR Financial Institution and Insurance Company tax forms.
Insurance Companies
Massachusetts General Laws chapter 63, sections 20 through 29 impose a number of premiums-based excises on insurance companies doing business in Massachusetts. The computation of the excise depends on the type of insurance provided. Rules for nexus and the determination of premiums attributable to Massachusetts are contained in the statutes themselves.
The forms and instructions provide practical guidance on how to perform the excise calculations.
Go to Regulation 830 CMR 63.29.1, for information on credits specifically available to Insurance companies.
Corporate Partners
With the exception of limited partners in a publicly traded partnership, a corporation is subject to the corporate excise as a general business corporation or financial institution if it is a general or limited partner in a partnership whose activities, if conducted directly by the business corporation, would subject that corporation to the corporate excise. In the case of tiered partnerships, the activities of the lower tier pass up through the chain and are imputed to the upper-tier corporate partner.
Go to Regulation 830 CMR 63.39.1, for more information.
Limited Liability Companies (LLC) Taxed as a Corporation
A Limited Liability Company (LLC) is an unincorporated association that provides limited liability to its owners (members).
LLCs are classified for Massachusetts tax purposes the same way they are for federal income tax purposes.
Go to the Secretary of the Commonwealth to learn about becoming a LLC.
LLCs which are taxed as a Massachusetts corporation must register with DOR to file and pay taxes through MassTaxConnect.
Tax Rates
Go to Massachusetts Tax Rates for:
- General Business Corporations
- S Corporations (including S Corporation Financial Institutions)
- Security Corporations
- Financial Institutions
- Life Insurance Companies
- Insurance Companies (including other Life Insurance Companies)
- Miscellaneous corporations and insurance companies (such as Urban Redevelopment corporations and Ocean Marine insurers).
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