Our Dash of SALT Blog provides the most recent developments and changes in state and local tax regulations. Here are the latest updates for Massachusetts.

February 16, 2026

Massachusetts Issues Ruling on Penalty Payment Failure due to Financial Hardship 

Authored by: Ryan Schupp and Penny Sweeting, CPA

Effective February 5, 2026, the Massachusetts Department of Revenue has enacted an additional subsection to emergency rule 830 CMR 62C.16B.1 stating that a taxpayer may apply for an abatement or waiver of penalties if the penalties assessed cause the taxpayer financial hardship. The purpose of the additional subsection is to give grace to those taxpayers who qualified for an additional monthly advanced payment due to 830 CMR 62C.16B.1. The Department has ruled that a company may be considered for an abatement if the taxpayer meets the following conditions:  

The outstanding balance of taxes due is on or after April 1, 2021, to March 1, 2026 

There is an outstanding balance of any tax or excise on the taxpayer’s account 

The taxpayer demonstrates that the imposition of a penalty will cause the company financial hardship 

If you have questions about penalty abatement, please reach out to a member of the Withum SALT Team. 

November 19, 2025

Massachusetts Withholding Requirement: Sale of Real Estate by Non-Residents

Authored by: Brandon Spinella and Penny Sweeting, CPA

Massachusetts now requires withholding on real estate sales or exchanges of $1,000,000 or more by non-resident sellers, effective for closings on or after November 1, 2025. The withholding agent—typically a closing attorney, title company, or escrow agent—must calculate and remit the withholding to the Department of Revenue within 10 days of closing and file Form NRW, even if no tax is due. Sellers must provide a Transferor’s Certification at closing, which may include exemptions or an election to use the alternative withholding calculation based on estimated net gain. The default withholding rate is 4% of the gross sales price, but alternative rates apply if elected: 5% for individuals and 8% for corporations, with additional surtax for amounts above certain thresholds. If no withholding agent is present, the buyer assumes responsibility for withholding, filing, and remittance.

If you have any questions about non-resident seller withholding, please reach out to a Withum SALT Team.

October 13, 2025

Massachusetts Expands Corporate Nexus Rules for Tax Liability

Authored by: Bonnie Susmano, JD, MBA and Ryan Schupp

Massachusetts regulation 830 CMR 63.39.1 outlines when a business has sufficient nexus—meaning a legal connection to the state—that subjects it to the corporate excise tax under Chapter 63. Recent updates expand nexus to include companies with over $500,000 in annual Massachusetts sales, even without physical presence. Nexus also applies to businesses with in-state property, payroll, or employees, and may be triggered by digital activities like interactive websites. Sales from related entities are combined to determine if the threshold is met.

If you have questions about nexus creating activities, please contact a member of the Withum SALT Team.

August 6, 2025

Massachusetts Unveils New Live Theater Tax Credit

Authored by: Bonnie Susmano, JD, MBA and Eric Wagener

On July 16, 2025, Massachusetts Governor Maura Healey launched a new tax credit for musical and live theater productions with the intention of attracting new productions in the state and expanding job opportunities in the sector, which currently contributes to $27 billion in revenue and over 130,000 jobs annually.

The credit will cover 35 percent of payroll expenses for qualifying businesses and 25 percent of expenditures related to production, performance, and transportation costs. The total available credits are limited to $7 million per year and applied against corporate income and excise taxes. Although nonrefundable, it will have an allowable carry-forward provision of five years.

Productions that wish to qualify must meet specific requirements, such as a budget of at least $100,000 with costs and expenses incurred in Massachusetts, a written script, multiple performances per week, and performances held at a qualifying facility within the state. Also, an eligible production must adhere to one of four production categories.

If you have questions about state tax incentives, please contact a member of the Withum SALT Team.

April 15, 2025

Massachusetts Court Rules Nonresident’s Stock Sale Taxable as State Income

Authored by: Courtney Easterday, MS and Kiana McGowan, CPA, MBA

On April 3, 2025, the Massachusetts Appeals Court ruled in the case of Craig H. Welch & another vs. Commissioner of Revenue (No. 24-P-109), upholding that the $4.7 million capital gain from the sale of Welch’s shares in AcadiaSoft, a financial technology company, was taxable as Massachusetts source income. Despite Welch and his wife moving to New Hampshire before the sale, the court determined that the income was connected to Welch’s business activities in Massachusetts, where he founded and operated AcadiaSoft.

This decision highlights the application of Massachusetts sourcing rules, which tax income derived from or connected to business activities within the state, regardless of the taxpayer’s residency at the time of the transaction. The court’s interpretation of General Laws Chapter 62, Section 5A, reinforces the state’s authority to tax such income, emphasizing the importance for nonresidents to consider the implications of their business activities in Massachusetts.

For more details, please refer to the full ruling of this case here.

If you have questions about state income tax sourcing, please reach out to a member of the Withum SALT Team.

April 15, 2025

Massachusetts Suggests Limiting P.L. 86-272 Protections for Internet Activities

Authored by: Courtney Easterday, MS and Kiana McGowan, CPA, MBA

On March 28, 2025, the Massachusetts Department of Revenue issued a notice for amended rule 830 CMR 63.39.1, proposing changes to its corporate income tax nexus regulation. The amendments aim to limit the protections offered by Public Law 86-272 for certain internet activities. Traditionally, P.L. 86-272 shields out-of-state corporations from state income taxes if the in-state activities are limited to soliciting orders for tangible personal property. The proposed changes would align Massachusetts with the Multistate Tax Commission’s (MTC) approach, clarifying that activities conducted through an internet website, such as placing cookies on customers’ devices to gather data for business purposes, may not be protected under P.L. 86-272.

These amendments would expand the scope of activities considered unprotected, potentially subjecting more businesses to Massachusetts’ corporate income tax. This move mirrors actions taken by states like California, New Jersey, and New York. However, legal challenges have complicated the implementation, leaving the overall situation uncertain as states balance modern e-commerce practices.

A virtual public hearing will be held on April 29, 2025, to address the state’s proposed changes. More information can be found here.

If you have questions about P.L. 86-272, please reach out to a member of the Withum SALT Team.

January 30, 2025

Massachusetts Clarifies What Apportionment Formula to Use

Authored by:Brian Meier, MSA,Brandon SpinellaandCourtney Easterday,MSA

The recently enacted supplemental 2024 budget bill outlines how a corporation’s taxable net income will be apportioned to Massachusetts if the single sales factor apportionment formula is not applicable, effective January 1, 2025. This single sales factor is based solely on sales receipts, replacing the current three-factor apportionment based on property, payroll, and receipts. The sales factor will not apply if both its numerator and denominator are zero, if the denominator is less than 10% of one-third of the taxable net income, or if the factor is deemed insignificant by the Commissioner of Internal Revenue. Given the above conditions, the income will be apportioned based on the corporation’s property and payroll in Massachusetts, with regulations to be adopted by the commissioner.

If you have questions about state apportionment, please reach out to a member of the Withum SALT Team.

December 17, 2024

Massachusetts Lowers Interest Rates for First Quarter of 2025

Authored by: Breea Boylan, MSA, CPA and Courtney Easterday, MSA

The Massachusetts Department of Revenue has issued Technical Information Release TIR 24-17 announcing the interest rates on over and underpayments for the first quarter of 2025. The 1Q 2025 rate is 6%, which is 1% lower than the 7% rate imposed in 2024. While rates are updated quarterly, the 7% rate was imposed throughout all of 2024.

If you have questions about state interest rates on under and overpayments, please reach out to a member of the Withum SALT Team.

Disclaimer: Please note this is the information that is readily available at this time, it is subject to change so please consult your Withum tax advisor.