The Commonwealth supports corporations in countless ways. Corporate profits depend on a dependable legal system, an educated workforce, a transportation system that brings goods to market, and other public supports that must be paid for, mostly through taxes.

In reaction to the many ways that corporations manage to avoid taxes, states have long established “corporate minimum taxes” that act as a backstop to ensure that all corporations pay some income tax. Massachusetts has not updated our minimum corporate excise tax for 30 years since its one-size-fits-all rate was set at $456 back in 1989.1  Several other states have since targeted their minimum rate so that small businesses and independent consultants pay a lower rate than large corporations.

A few facts about the corporate minimum tax demonstrate that it is widely used, even by many very large corporations:

  • 73 percent of all businesses that filed the corporate excise tax in Massachusetts paid the minimum $456 in 2014.2 

  • Similarly, an analysis of year 2000 tax data cited by the Study Commission on Corporate Taxation found 74 percent of Massachusetts corporations paid the corporate minimum.3  The analysis found that 37 percent of corporations reporting more than $10 million in gross receipts paid the minimum excise. Additionally, 20 percent of the state’s largest 50 employers paid the minimum excise.

  • The Department of Revenue provided the Commonwealth’s 2007 Study Commission on Corporate Taxation with information showing that in 2004, a third of companies with gross receipts over $50 million paid the corporate minimum tax: 2,283 companies.4  There were 207 companies with annual sales over $1 billion that paid only the minimum tax. This represented 24 percent of companies with a billion dollars in sales.

  • A study by the Institute on Economic and Tax Policy based on companies’ 2015 filings to the Securities and Exchange Commission found that at least two dozen Fortune 500 companies paid no state income tax other than the corporate minimum.5

  • Revenue collections from the minimum tax in 2014 totaled about $54.7 million.

States, such as New York, New Jersey, and Oregon target their corporate minimum taxes so that businesses with larger volumes of sales pay larger minimum rates. In New York, for example, the minimum corporate tax tops out at $200,000 for companies with over $1 billion in New York receipts.6


1 See Department of Revenue 830-CMR 23B.2.2 at See also MassBudget, “Gone with the Wind: The Vanishing Corporate Income Tax,” p. 23 at

2 A total of 119,866 of all 163,426 businesses paying the corporate excise paid the minimum. See Massachusetts Department of Revenue, “A Report on 2014 Corporate Excise Returns.” This is the last year for which the Department has published data. See “Excise due” row at Table 3, page 25 at

3 Commonwealth of Massachusetts, Study Commission on Corporate Taxation, “Final Report,” December 28, 2007, Appendix M at

4 See Appendix M at

5 The SEC filings list the amount of total taxes paid to all fifty states as a group, but do not disclose tax payments to individual states. Thus, many more Fortune 500 corporations may have avoided paying corporate income taxes specifically to Massachusetts. See Institute on Taxation and Economic Policy,

6 In New York, the minimum is $500 for companies with between a half million to a million dollars in New York receipts; a $1,500 tax for receipts above $1 million but not over $5 million; a $3,500 tax up to $25 million; a $5,000 tax up to $50 million; $10,000 tax up to $100 million; $20,000 up to $250 million; and $50,000 tax up to $500 million; and $100,000 up to $1 billion. In New Jersey, the minimum Corporation Business Tax ranges from $500 for a corporation with gross receipts less than $100,000, up to $2,000 for a corporation with gross receipts of $1 million or more. In Oregon the minimum tax spans from $150 for corporations with sales under $500,000, and reaches $100,000 for companies with sales of $100 million or more.

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