Research Areas
Massachusetts
The Facts on Massachusetts' Tax Climate
Here are some basic facts on Massachusetts' tax system and how it compares to other states:
Tax Freedom Day Arrives on April 14 in Massachusetts
Tax Freedom Day is the day when Americans finally have earned enough money to pay off their total tax bill for the year. In 2011, Massachusetts taxpayers work until April 14 to pay their total tax bill, ranking the state 10th highest nationally. That's 2 days after national Tax Freedom Day (April 12). The Tax Freedom Days of neighboring states are as follows: Rhode Island, April 13 (ranked 12th nationally); Connecticut, May 2 (ranked 1st nationally); New York, April 24 (ranked 3rd nationally); New Hampshire, April 9 (ranked 22nd nationally); and Vermont, April 10 (ranked 18th nationally).
Full study of Tax Freedom Day, nationwide and in each state
Massachusetts' State and Local Tax Burden Slightly Above National Average
Massachusetts' 2009 state and local tax burden of 10.0% of income is slightly above the national average of 9.8%. Massachusetts' tax burden has decreased overall from 12.1% (4th nationally) in 1977 to 10.0% (11th nationally) in 2009. Massachusetts taxpayers pay $5,316 per capita in state and local taxes.
Massachusetts' State and Local Tax Burdens, 1977-Present
Other States' State/Local Tax Burdens
Map of U.S. Showing all State's Burdens and Ranks
Historical Chart Comparing All States' State/Local Tax Burdens from 1977 to 2009
Massachusetts' 2012 Business Tax Climate Ranks 24th
Massachusetts ranks 24th in the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states rank as follows: Rhode Island (46th), Connecticut (40th), New York (49th), New Hampshire (6th) and Vermont (47th).
50-State Comparison of Business Tax Climates (data only)
2012 State Business Tax Climate Index, Ninth Edition (full study)
Massachusetts' Individual Income Tax System
Massachusetts' personal income tax system consists of a flat rate of 5.3% on most personal income. This rate ranks 31st highest among states that levy an income tax. Massachusetts' 2008 state-level individual income tax collections were $1,916 per person, which was the 2nd highest in the nation.
50-State Table of Individual Income Tax Rates
50-State Table of State Individual Income Tax Collections
50-State Table of State and Local Individual Income Tax Collections Per Capita
Massachusetts' Corporate Income Tax System
Massachusetts' corporate tax structure consists of a flat rate of 8.8% on all corporate income. Among states levying corporate income taxes, Massachusetts' rate ranks 9th highest nationally. In 2008, state-level corporate tax collections (excluding local taxes) were $334 per capita, which ranked 4th highest nationally.
50-State Table of Corporate Income Tax Rates
50-State Table of State and Local Corporate Income Tax Collections Per Capita and Per Household
50-State Table of State Corporate Income Tax Collections Per Capita
Massachusetts Sales and Excise Taxes
Massachusetts levies a 6.25% general sales or use tax on consumers, above the national median of 5.85%. In 2007 combined state and local general and selective sales tax collections were $952 per person, ranking 45th highest nationally. Massachusetts' gasoline tax stands at 23.5 cents per gallon, which ranks 26th highest nationally. Massachusetts' cigarette tax stands at $2.51 per pack of twenty, ranking 7th highest in the nation. The sales tax was adopted in 1966, the gasoline tax in 1929 and the cigarette tax in 1939.
50-state table of sales, cigarette, gas, beer, wine, and spirits tax rates.
50-State Table of State and Local General and Selective Sales Tax Collections Per Capita
Massachusetts Property Taxes among Nation's Highest
Massachusetts is one of the 37 states that collect property taxes at both the state and local levels. As in most states, local governments collect far more. Massachusetts' localities collected $1,683.66 per capita in property taxes in fiscal year 2006, which is the latest year that the Census Bureau published state-by-state data. Despite a well-known property tax limitation measure passed in the early 1980s, Proposition 2 1/2, Massachusetts' combined state/local property taxes are the 8th highest in the nation per capita. High levels of collections have been possible because the limitations in law are relatively easy to override locally. At the state level, Massachusetts collected a mere $0.01 per capita during FY 2006, making its combined state/local property taxes $1,683.67 per capita.
State property tax collections per capita by state
Federal Tax Burdens and Expenditures: Massachusetts is a Donor State
Massachusetts taxpayers receive less federal funding per dollar of federal taxes paid compared to the average state. Per dollar of Federal tax collected in 2005, Massachusetts citizens received approximately $0.82 in the way of federal spending. This ranks the state 40th nationally and represents a fall from 1995 when Massachusetts received $0.92 per dollar of taxes in federal spending (when the state ranked 39th nationally). Neighboring states and the amount of federal spending they received per dollar of federal taxes paid were as follows: Rhode Island ($1.00), Connecticut ($0.69), New York ($0.79), New Hampshire ($0.71), and Vermont ($1.08).
Comparing the amount of federal taxes sent to Washington with the amount of federal spending coming back to the state
