Selling a business in Massachusetts: what the state takes (2026)
Massachusetts’s top individual income tax rate is 9%. Here is what an owner selling company stock pays, with 2026 rules from official sources and worked examples at $10 million, $25 million and $50 million.
- 9%
- Top Massachusetts income tax rate (2026)
- $2,205,690
- State tax on a $25M long-term gain
- 32.6%
- Combined federal and state rate on $25M
- 9 of 51
- Rank by total tax on $25M (1 = highest)
How Massachusetts taxes a business sale
- Income tax
- Top rate 9%: 5% on Part B income and long-term gains, plus 4% surtax on taxable income over $1,107,750 (2026).
- Long-term capital gains
- Long-term capital gains are taxed at 5% (short-term gains at 8.5%, collectibles at 12% with a 50% deduction), plus the 4% surtax on taxable income above $1,107,750, so most of a large gain is taxed at 9%.
- Entity-level taxes
- Massachusetts imposes a corporate-level income measure on S corporations with large total receipts, and offers an elective PTE excise. This only matters for asset sales at the entity level.
- Local taxes
- Massachusetts has no local income taxes.
Three worked examples
| Long-term gain | $10,000,000 | $25,000,000 | $50,000,000 |
|---|---|---|---|
| Federal capital gains tax (20%) | $2,000,000 | $5,000,000 | $10,000,000 |
| Net investment income tax (3.8%) | $380,000 | $950,000 | $1,900,000 |
| Massachusetts tax | $855,690 | $2,205,690 | $4,455,690 |
| Total tax | $3,235,690 | $8,155,690 | $16,355,690 |
| Effective combined rate | 32.36% | 32.62% | 32.71% |
| Net proceeds after tax | $6,764,310 | $16,844,310 | $33,644,310 |
| Extra tax versus Texas | $855,690 | $2,205,690 | $4,455,690 |
Seller’s tax calculator
Estimate federal and state tax on a stock sale and what is left before fees and debt.
- Long-term capital gain
- $25,000,000
- Federal capital gains tax (20%)
- $5,000,000
- Net investment income tax (3.8%)
- $950,000
- Massachusetts tax
- $2,205,690
- Taxable gain at 5%
- $1,250,000
- Massachusetts 4% surtax
- $955,690
- Total tax
- $8,155,690
- Effective rate on the gain
- 32.62%
- Net proceeds after tax
- $16,844,310
Illustration, not tax advice. Assumes a resident individual, the whole gain long-term, top marginal rates, no state credits, installment terms, QSBS exclusion or other planning, and no local taxes. Net proceeds are before transaction fees, debt repayment, escrows and earn-outs. Rates are for tax year 2026 where published; see the methodology.
Compare with other states
Neighboring states
- Connecticut30.8% combined, $17.30M net
- New Hampshire23.8% combined, $19.05M net
- New York34.1% combined, $16.48M net
- Rhode Island29.8% combined, $17.55M net
- Vermont32.4% combined, $16.89M net
Common comparisons
- California37.1% combined, $15.72M net
- Texas23.8% combined, $19.05M net
- Florida23.8% combined, $19.05M net
- Nevada23.8% combined, $19.05M net
- Washington33.5% combined, $16.63M net
- Tennessee23.8% combined, $19.05M net
Methodology and sources
Massachusetts figures are for tax year 2026. 2026 surtax threshold ($1,107,750) published by DOR on its tax rates page. The examples assume a resident individual selling privately held stock for a long-term gain equal to the sale price (zero basis), with every dollar taxed at the top marginal rates, the federal 20% capital gains rate and the 3.8% net investment income tax, and no planning, credits or local taxes. Full assumptions are in the report methodology.
All 50 states and DC with source URLs.
- 1Mass. DOR, Massachusetts Tax Rates
- 2Tax Foundation, State Individual Income Tax Rates and Brackets, 2026. Secondary source
Data last updated October 26, 2026.
Cite this research
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Citation
Laurent Capital Research, “The Seller’s Tax Map: What Selling a Business Costs in Every State (2026): Massachusetts,” 2026, https://laurent.capital/research/seller-tax-map/massachusettsLink (HTML)
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