Massachusetts lesson 5 of 6
Massachusetts LLC taxes, licences and permits
Massachusetts LLCs taxed as pass-throughs do not pay a separate state LLC franchise tax, but resident members do pay Massachusetts personal income tax on their share of profits.
Personal income tax on members
Massachusetts applies a flat personal income tax rate to most income, with an additional surtax on income above a set threshold under the state's constitutional surtax provision. Check the Department of Revenue's current rates for the tax year you are filing, since rate figures are set by the state and can be adjusted.
Corporate excise if you elect corporate treatment
If an LLC elects to be taxed as a corporation for federal purposes, Massachusetts applies its corporate excise tax instead of pass-through treatment. This is a tax election decision separate from your Corporations Division filing, and it is worth discussing with an accountant before making it.
Sales tax and licensing
Register with the Department of Revenue for sales tax if you sell taxable goods or services. Massachusetts does not issue one universal statewide business licence; specific industries and municipalities each set their own licensing and permit requirements.
Confirm any professional or local licence requirements with the relevant board or municipality directly. The Secretary of the Commonwealth's filing has nothing to do with industry licensing.
Key takeaways
- No separate state LLC franchise tax on pass-through LLCs, but resident members pay personal income tax on profits.
- Electing corporate tax treatment brings the LLC into the Massachusetts corporate excise tax instead.
- Sales tax registration and local or industry licences sit outside the Corporations Division filing.
Frequently asked questions
Is there a Massachusetts LLC franchise tax like California's $800 tax?
No. Massachusetts does not charge a flat annual LLC franchise tax. Its main recurring state cost is the $500 annual report fee, plus ordinary personal income tax on members' share of profits.
Do I need a state business licence to operate in Massachusetts?
There is no single statewide business licence. Whether you need a licence depends on your industry and municipality, so check with the relevant board or local government.
Official sources
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Last reviewed: September 2026 - reviewed by Gullia Filing Legal & Formation Team