Doing business in Boston: city taxes on top of state filings

The stack

• Corporate excise combines 8% of income with $2.60 per $1,000 of property or net worth; $456 minimum.
• Massachusetts LLCs pay $500 a year just to file the annual report.
• Trade names need a Boston business certificate ($65, renewed every four years).

Corporations

Massachusetts corporations and LLCs taxed as corporations pay the corporate excise: 8% of Massachusetts net income plus a non-income measure of $2.60 per $1,000 of taxable tangible property or net worth, with a $456 minimum even in a loss year. S-corporations pay a reduced entity-level rate when receipts are large, and their owners pay personal income tax.

LLCs

A Massachusetts LLC taxed as a partnership or disregarded entity owes no entity-level excise, but it files an annual report with the Secretary of the Commonwealth for $500 every year: a carrying cost closer to California’s than Delaware’s. Owners pay the 5% Massachusetts income tax, and income above $1,107,750 in 2026 (indexed each year) adds the 4% millionaires’ surtax.

Boston-specific

Boston has no city income or gross receipts tax. Businesses operating under a name other than their legal name file a business certificate with the City Clerk ($65, plus $35 for non-residents), renewable every four years, and some activities need separate city licenses or permits.

Worked example

A two-founder Boston LLC formed in Massachusetts pays $500 a year to exist and nothing at the entity level on profit. Formed in Delaware and registered in Massachusetts instead, it pays Delaware’s $400 plus the Massachusetts foreign LLC annual report: more, not less. Hiring in Boston triggers Massachusetts payroll registration, withholding, and paid family and medical leave contributions from day one.

The state layer underneath

City taxes sit on top of state obligations, never instead of them. For the MA side, see changing an entity’s home state, and check whether a hire or customer in Boston creates a filing duty in the nexus checker.