Accounting and tax
- The corporate tax in Massachusetts is 8% of the corporation’s taxable net income, with the minimum payable amount of US$456;
- Withholding tax on Massachusetts sourced income including dividends, interest payments and wages will be 5.1%. Additionally, capital gains tax is also imposed at rate of 5.1%;
- Besides state tax, companies will also be required to pay federal taxes including corporate income tax of up to 35%, withholding tax of 30% and capital gains tax of 35%;
- Branch offices are also subject to state corporate tax of 8% and federal corporate income tax of up to 35%;
- Sales tax is also levied in Massachusetts up to a rate of 6.25%. There is no federal sales tax.
- Massachusetts companies must file annual tax return by the 15th day of the third month after close of the taxable year;
- Sales tax and withholding tax filings may be required on a monthly, quarterly or annual basis, depending on the amount of annual liability.
- Net operating losses may be carried forward for twenty years and may be carried back for two years to offset taxable income for those years;
- US has signed income tax treaties on withholding tax rates with over 60 countries including France, Russian Federation, South Africa, Sweden, Barbados, India, and the United Kingdom.
Legal and compliance
- A Massachusetts company can be incorporated with 1 director and 1 shareholder. There are no residency or nationality requirements;
- All Massachusetts companies must have a local registered office and a resident agent. Healy Consultants PLC will provide this service to our Clients;
- To incorporate the company, Healy Consultants PLC will assist our Clients file the articles of organization/ certificate of organization for their entity with the Secretary of the Commonwealth;
- To open the corporate bank account, Healy Consultants PLC will assist our Clients apply for Federal Employer Identification Number (FEIN) for their company.
- The minimum wage in Massachusetts is $11 per hour, which is higher than the federal minimum wage of US$7.25 per hour;
- The average work week in Massachusetts is 40 hours. An employee working higher than 40 hours is entitled to overtime pay of 1.5 times the regular hourly wage;
- Employers are required to maintain complete payroll records with the following information: i) employee’s name ii) occupation iii) amount paid and iv) hours worked. These records will be maintained for at least 3 years;
- Employees are allowed up to 40 hours of sick leave in 1 year. Employees who miss 3 days of work in a row must provide a doctor’s note;
- Employers may not discriminate against an employee/potential employee on grounds of gender, race, religion, nationality etc.