Key figures
Massachusetts accounting
2026, with sources
Two measures and a minimum
Massachusetts calls its corporate tax an excise and computes it in two parts that are added together: an income measure of 8.0% of net income apportioned to Massachusetts, and a non-income measure of $2.60 per $1,000 of either taxable tangible property or net worth. The total is never less than $456, and the minimum is never prorated, even for a corporation that registered in December.
For most early-stage software companies the non-income measure is small and the $456 minimum is what they pay until they turn a profit. A company that raised a large round can have meaningful net worth, though, so the classification and the property measure are worth checking before assuming the minimum applies.
Sales-only apportionment and combined reporting
From tax years beginning on or after January 1, 2025, corporations apportion income to Massachusetts using the sales (receipts) factor only; property and payroll are used only in the rare years when the sales factor is inapplicable. For a Cambridge company with engineers in Kendall Square and customers nationwide, that is a real change: payroll in Massachusetts no longer pulls income into the state, while Massachusetts customers do.
Members of a unitary group under common control file a combined report on Form 355U. A startup with a Delaware parent and a Massachusetts operating subsidiary generally files as a combined group, and gets a seven-month extension instead of six.
Conformity and the provision
The corporate excise generally conforms to the Internal Revenue Code as currently in effect, with listed exceptions. The ones that matter to a startup: Massachusetts disallows federal bonus depreciation under § 168(k), did not adopt § 168(n) for qualified production property for 2025, and, under the June 2026 supplemental budget, disallowed the § 174A immediate deduction for 2025 only, requiring R&E to be deducted as § 174 stood on July 3, 2025. That disallowance is repealed for 2026.
Bonus depreciation is also disregarded in computing a Massachusetts net operating loss, which is carried forward under 830 CMR 63.30.2. In the provision, expect a Massachusetts-only depreciation difference that persists, and a one-year R&E difference for 2025 that unwinds.
Deadlines
- 15th day of the 4th month (Apr 15 for calendar years)Corporate excise returnForm 355 / 355U
- By the original due dateAutomatic extension (six months; seven for combined filers) if at least 50% of tax or $456 is paid
- QuarterlyEstimated payments if the excise is expected to exceed $1,000Form 355-ES
The federal baseline
This page covers what Massachusetts adds. The federal rules underneath it apply here too.
Common questions
Does Massachusetts tax more than income?
Yes, two measures added together: 8% of income apportioned to Massachusetts, plus $2.60 per $1,000 of either tangible property or net worth, depending on how the corporation is classified. A loss-making startup still pays the non-income measure, and never less than $456.
Can we expense R&D immediately in Massachusetts?
Not on the 2025 return. The June 2026 supplemental budget delayed conformity to § 174A: for 2025, corporations deduct R&E as § 174 allowed on July 3, 2025, and add back the immediate deduction. The disallowance is repealed for tax years beginning in 2026, so 2026 follows federal treatment, though the mechanics for catch-up deductions are still being set out by DOR.
Accounting next door
- CTConnecticut accountingConnecticut taxes corporations at 7.5% of apportioned income, with a 10% surtax that reaches every combined group, a $250 minimum and an NOL cap at half of income.
- NHNew Hampshire accountingNew Hampshire has no sales tax and no wage tax, but taxes business profits at 7.5% and an enterprise base of payroll, interest and dividends at 0.55%. It follows the Code as of 2018.
- NYNew York accountingNew York taxes a C-corp three ways: the state franchise tax, an MTA surcharge in the commuter district, and in the five boroughs a separate NYC Business Corporation Tax. All three apportion by where customers are.
- RIRhode Island accountingRhode Island taxes corporations at 7% of income apportioned by receipts, with a $400 minimum and mandatory combined reporting. NOLs last only five years, and § 174A is not followed.
- VTVermont accountingVermont taxes corporations at 6%, 7% and 8.5%, with a minimum tax of $100 to $100,000 set by Vermont gross receipts. Apportionment is sales-only and NOLs carry forward 10 years.
Founder guides on this
- R&D taxThe R&D tax credit and Section 174A for startupsEngineering salaries can earn a federal R&D credit against payroll tax, and Section 174A lets you deduct US research again. What qualifies, what to track.
- US GAAPUS GAAP for early-stage startups, in plain EnglishAccrual accounting, revenue recognition (ASC 606), leases (ASC 842), stock compensation and capitalized software: what each means for a small company.
- FundraisingAudit-ready books before your Series AInvestors, lenders and auditors ask for the same things: accrual statements, reconciled accounts and support for every balance. How to be ready first.
- The closeWhy startups should close their books every monthA monthly close turns a bank balance into numbers an investor, an auditor or a 409A firm will accept. What it is, and why it gets expensive to skip.
More of the Massachusetts guide
- ReceivablesReceivables and sales tax in MassachusettsSales tax registration, economic nexus, whether SaaS is taxable, and collecting from customers
- PayablesPayables and contractors in MassachusettsPaying vendors and contractors: 1099 filing, use tax, contractor tests and withholding
- PayrollPayroll taxes and employer rules in MassachusettsWithholding, unemployment insurance, paid leave, minimum wage and the rules on paydays
- ComplianceCompliance and filings in MassachusettsRegistering to do business, annual reports, franchise tax and the filing calendar
- AdvisoryAdvisory: credits and decisions in MassachusettsCredits, incentives and the decisions that are cheaper to get right the first time
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.