Starting a Business in Massachusetts: Licenses, Permits & Requirements (2026)

Last updated: April 29, 2026

Three things make Massachusetts uniquely expensive and uniquely structured to start a business in. First, Massachusetts charges a $500 LLC Certificate of Organization filing fee plus a $500 Annual Report — both among the highest in the country and meaningfully higher than neighbors like New Hampshire ($100), Rhode Island ($150), and Connecticut ($120). Second, Massachusetts is the only state with a 4% income tax surcharge on income over $1,053,750 (the 2026 inflation-adjusted threshold under Article 44 / the Fair Share Amendment), creating an effective top rate of 9% on income above the threshold from any source — wages, capital gains, business income, and distributions. Third, Massachusetts requires workers’ compensation at the first employee under MGL c.152 — one of the strictest thresholds in the United States — and pairs it with a PFML (Paid Family and Medical Leave) contribution from day one. Plan for all three before you sign your first lease.

This guide compiles the specific Massachusetts agency requirements, portal links, fee amounts, and city-level variations that apply to starting a business in Massachusetts in 2026. The source agencies referenced are the Massachusetts Secretary of the Commonwealth (Corporations Division), the Department of Revenue (DOR), the Department of Family and Medical Leave (DFML), the Department of Industrial Accidents (DIA), the Department of Unemployment Assistance (DUA), and the Executive Office of Labor and Workforce Development (EOLWD).

Massachusetts Business Requirements at a Glance

Requirement	Agency / Portal	Cost	Timeline
LLC Certificate of Organization	Massachusetts Secretary of the Commonwealth — COFS portal	$500 (one of highest in US)	Online filing
LLC Annual Report	MA Secretary of the Commonwealth	$500/year	Due each anniversary
Domestic Corporation Articles of Organization	MA Secretary of the Commonwealth	$275 minimum (up to 275,000 shares)	Online via COFS
Corporation Annual Report	MA Secretary of the Commonwealth	$125 ($100 electronic / $150 paper or late)	Due 2.5 months after fiscal year end
Business Certificate (DBA)	Each city or town clerk under MGL c.110 §§ 5-6	$20-$150 depending on municipality	Valid 4 years
Federal EIN	IRS.gov	Free	Immediate online
Sales and Use Tax Registration	MA DOR — MassTaxConnect	Free	Required before first taxable sale
Withholding Tax Registration	MA DOR — MassTaxConnect	Free	Required before first payroll
Workers’ Compensation	Private insurer or Workers’ Compensation Rating & Inspection Bureau of Massachusetts (residual market)	Varies by payroll and class	Required at first employee
PFML Registration	Department of Family and Medical Leave	0.88% combined (25+) / 0.46% employee-only (under 25)	Register before first payroll
DUA Unemployment Insurance	Department of Unemployment Assistance	2.42% new employer (6.08% construction) on $15,000 base	Required before first payroll
EMAC (Employer Medical Assistance Contribution)	DUA	0% years 1-3; 0.12% yr 4, 0.24% yr 5, 0.34% yr 6+ on $15,000 base	Auto-applied with UI
New Hire Reporting	DOR Child Support Services	Free	Within 14 days of hire under MGL c.62E
Industry-specific licensing (cosmetology, HVAC, daycare, PI, pesticide)	Board-specific via ePLACE Portal	Varies	Before practicing

How to Start a Business in Massachusetts (Step by Step)

Step 1: Form Your Massachusetts LLC or Corporation

The $500 LLC Reality

File a Certificate of Organization through the Massachusetts Secretary of the Commonwealth’s COFS portal at corp.sec.state.ma.us. The LLC filing fee is $500. A domestic corporation files Articles of Organization for $275 minimum (covering up to 275,000 authorized shares; an additional $100 per 100,000 shares above that). Massachusetts does not currently offer a fee waiver, low-fee jurisdiction, or first-year holiday — the $500 is locked in.

Massachusetts is among the most expensive states in the country to form an LLC. For comparison: New Hampshire $100, Rhode Island $150, Connecticut $120, Vermont $125. The recurring $500 LLC Annual Report is the same fee — you do not save money on the renewal. Operators with low expected revenue often find that incorporating as a domestic corporation (with a $125 annual report — $100 if filed electronically, $150 if paper or late) is cheaper than running an LLC, even after accounting for the additional formality of corporate governance.

Choose Your Resident Agent

Massachusetts requires every LLC and corporation to appoint a Resident Agent (the Massachusetts equivalent of a registered agent) with a Massachusetts street address (P.O. boxes not accepted). You can serve as your own Resident Agent if you have a MA street address; otherwise hire a third-party Resident Agent service.

Get Your Federal EIN

Get your free federal EIN immediately at IRS.gov — you need it before registering for MA state taxes, opening a business bank account, or hiring employees.

Step 2: File a Business Certificate (DBA) at Every City/Town Where You Operate

Massachusetts is one of a small number of states that handles DBAs at the local clerk level, not at the Secretary of the Commonwealth. Under MGL c.110 §§ 5-6, every business operating under a name different from its legal name must file a Business Certificate with the city or town clerk in every municipality where it conducts business. Operating under an unfiled name is a violation that can carry per-day fines.

Fees vary widely by municipality:

• Boston: $65 (filed at the City Clerk)
• Brookline: $100 resident / $150 non-resident
• Northampton: $50
• Reading: $40
• North Andover: $40
• Smaller towns: $20-$50

Business Certificates in Massachusetts are valid for 4 years and must be renewed at each clerk. If you operate in three Greater Boston towns, you file three separate Business Certificates and renew all three on a four-year cadence.

Step 3: Register for State Taxes Through MassTaxConnect

The Massachusetts Department of Revenue (DOR) operates MassTaxConnect at mtc.dor.state.ma.us as the unified portal for sales and use tax, withholding, corporate excise, and most other state tax registrations.

Massachusetts Sales and Use Tax — 6.25% Flat, No Local Add-Ons

The Massachusetts state sales tax rate is 6.25% with no local add-ons. This is unusual in the United States — almost every other state allows counties or cities to layer local sales tax on top. The flat 6.25% applies statewide whether your customer is in Boston, Worcester, Pittsfield, or Provincetown. The simplicity is a real advantage relative to Colorado’s home-rule patchwork or Illinois’ Chicago/Cook County stack.

Services are generally exempt from Massachusetts sales tax under MGL c.64H. Cleaning services, landscaping services, child care, and most professional services are not subject to sales tax. Tangible personal property (retail goods, restaurant meals, certain prepared foods) is taxable.

Meals tax: Restaurant meals are taxed at the 6.25% state rate, and cities and towns may add a local meals tax of up to 0.75% under the Local Option Meals Tax (a meaningful fact for food trucks and restaurants). Most major cities — Boston, Cambridge, Worcester, Springfield — have adopted the 0.75% local meals tax, bringing the combined meals rate to 7.00%.

Room occupancy tax: Room occupancy is taxed at 5.7% state plus a local option of up to 6% (Boston is at 6%), plus a 2.75% Convention Center Financing Fee in qualifying jurisdictions and a 3% community impact fee for short-term rentals.

Massachusetts Personal Income Tax — 5% Flat + 4% Millionaire’s Tax

Massachusetts uses a flat 5% personal income tax rate on most income (interest, dividends, wages, business income). Article 44 of the Massachusetts Constitution requires that all income of the same class be taxed at the same rate, which is why Massachusetts uses a flat structure rather than brackets.

The Fair Share Amendment, ratified in November 2022 and effective tax year 2023, added a 4% surtax on Massachusetts taxable income above an inflation-adjusted threshold. The threshold for tax year 2026 is $1,053,750. The surtax applies to the portion of income above the threshold, regardless of source — wages, capital gains, business income from pass-through entities, rental income, and distributions are all subject. The combined effective rate on income above the threshold is 9%.

For most small-business owners in Massachusetts, the 5% flat rate applies. The surtax only matters in years where Massachusetts taxable income exceeds the indexed threshold — most often relevant when selling a business, taking a large distribution from an S-corp, or realizing a major capital gain. Plan structuring around the threshold (installment sales, multi-year distributions, careful timing of equity events) is a real planning area for MA business owners approaching exit.

Massachusetts Corporate Excise Tax

Massachusetts corporations pay a corporate excise that has two components: 8.0% on Massachusetts taxable income plus $2.60 per $1,000 of the greater of Massachusetts taxable tangible personal property or taxable net worth. The minimum corporate excise is $456. S-corporations with gross receipts above certain thresholds also pay an entity-level tax.

Pass-through entities (LLCs taxed as partnerships, partnerships, sole proprietorships) flow income to members’ personal Massachusetts returns at the 5% flat rate (plus 4% surtax on portions above the $1,053,750 threshold).

Step 4: Stack the Massachusetts Payroll Obligations

The moment you hire your first employee, four Massachusetts-specific obligations attach. Plan for all four on day one — Massachusetts has one of the most aggressive small-employer compliance burdens in the country.

Workers’ Compensation — Required at the First Employee

Under MGL c.152 § 25A, every Massachusetts employer with one or more employees must carry workers’ compensation insurance. There is no minimum threshold, no industry exemption, and no carve-out for part-time or family members. Limited exceptions:

• Corporate officers who own 25%+ of the corporation may exempt themselves (does not apply to non-officer employees)
• LLCs/LLPs with no employees other than the members or partners are not required to carry coverage; once they hire any non-member, coverage is required

The Department of Industrial Accidents (DIA) enforces. Operating without coverage triggers criminal penalties up to $1,500 and one year imprisonment, plus a STOP WORK ORDER and civil fines of up to $250 per day until coverage is obtained. The Workers’ Compensation Rating & Inspection Bureau of Massachusetts (WCRIBMA) administers the assigned-risk pool for employers who can’t get coverage on the open market.

PFML — Department of Family and Medical Leave

The 2026 PFML contribution rates from the Department of Family and Medical Leave:

• 25 or more covered individuals: 0.88% combined. Medical leave is 0.70% (split as 0.42% employer / 0.28% employee). Family leave is 0.18% (employee-only by default; employer may choose to cover).
• Fewer than 25 covered individuals: 0.46% employee-only. Small employers are exempt from the medical-leave employer share but must still withhold and remit the employee share.

Premiums apply on wages up to the 2026 federal Social Security wage cap of $184,500. The 2026 maximum weekly benefit for an employee on PFML leave is $1,230.39 (based on a State Average Weekly Wage of $1,922.48). PFML covers up to 12 weeks of family leave or 20 weeks of medical leave per benefit year, capped at 26 combined weeks.

DUA Unemployment Insurance + EMAC

The Department of Unemployment Assistance assesses UI on a $15,000 taxable wage base. The 2026 new-employer rate is 2.42% for non-construction and 6.08% for construction; experienced rates range from 0.94% to 14.37%.

The Employer Medical Assistance Contribution (EMAC) layers on top of UI, also on the $15,000 base:

• Years 1-3: exempt
• Year 4: 0.12%
• Year 5: 0.24%
• Year 6 and beyond: 0.34%

The EMAC Supplement is a separate, harder-to-track charge applying to employers with 6+ Massachusetts employees whose workers enroll in MassHealth or subsidized ConnectorCare for more than 8 weeks per quarter. The supplement is 5% of wages up to $750 per affected employee per year. Lower-wage workforces (cleaning, food service, child care, retail) are most likely to trigger this — model it before you build out staffing.

New Hire Reporting

Under MGL c.62E and 830 CMR 62E.2.1, every Massachusetts employer must report new hires (and rehires after 30+ days off payroll) within 14 days to the DOR Child Support Services Division. The 14-day clock applies regardless of employer size.

Step 5: Get Industry-Specific State Licenses

Massachusetts uses a fragmented board structure — most professional licensing is delegated to industry-specific boards rather than consolidated under a single agency. Most boards now accept applications through the ePLACE Portal at eplace.eea.mass.gov (the Energy and Environmental Affairs Licensing portal that has expanded across multiple agencies).

• Cosmetology, esthetics, manicuring, barbering — Board of Registration of Cosmetology and Barbering at the Division of Occupational Licensure
• Plumbing and gas fitting — Board of State Examiners of Plumbers and Gas Fitters (covers some HVAC scopes that involve gas piping)
• Construction supervision (HVAC structural work, building >35,000 cu ft) — Board of Building Regulations and Standards (BBRS) Construction Supervisor License
• Refrigeration technicians — Board of State Examiners of Plumbers and Gas Fitters issues a Refrigeration Technician (RT) license
• Child care — Department of Early Education and Care (EEC) under 606 CMR 7.00
• Private investigators — Department of State Police, Certified Investigator Licensing under MGL c.147 §§ 22-30
• Pesticide applicators — Department of Agricultural Resources (MDAR), Pesticide Bureau
• Real estate, insurance, electricians, mental health, medical — separate boards under the Division of Occupational Licensure

Massachusetts’ Distinctive Operating Environment

Five aspects of running a Massachusetts business require specific planning compared to most other states:

1. Massachusetts entity costs are among the highest in the United States. The $500 LLC Certificate of Organization plus the recurring $500 LLC Annual Report locks in $1,000 of cost in year one before any operating expense. Operators with low expected revenue often find that a domestic corporation with a $125 annual report ($100 electronic) is cheaper to maintain — even after considering S-corp tax-prep costs.

2. The 4% Millionaire’s Tax has reshaped exit planning. The combined 9% effective rate on income above $1,053,750 (2026 threshold, indexed annually) means selling your Massachusetts business, taking a large S-corp distribution, or realizing a major capital gain has materially different tax consequences than the same event in 2022. Installment sales, multi-year distribution timing, and entity restructuring are now standard small-business planning topics in MA.

3. The PFML + workers’ comp + EMAC stack hits at the first employee. Workers’ comp at one employee, PFML at one employee, EMAC after year three, and the EMAC Supplement at six employees create a compliance burden that small employers in low-paid-leave states (Florida, Texas, North Carolina, most of the South) simply do not face. Budget the full payroll-tax stack from day one — a $30/hour child care worker in Boston carries roughly the same total payroll cost as a $35/hour worker in a state without PFML.

4. Sales tax simplicity is a real operational advantage. The flat 6.25% with no local add-ons (outside the meals and room occupancy local options) means a Massachusetts retailer selling across the state files one sales tax return and applies one rate. This is genuinely simpler than Colorado, Illinois, Texas, or California — less software, less reconciliation, less audit exposure.

5. The Big Three industries (biotech, higher ed, finance) shape ICP for service businesses. Greater Boston has roughly 100,000 biotech jobs concentrated in Cambridge, Kendall Square, and the Seaport, plus the concentration of universities (Harvard, MIT, BU, Northeastern, BC, Tufts, UMass Boston, and dozens of smaller schools). For a cleaning, HVAC, daycare, food truck, or landscaping business, calibrating your service offering to that customer base — biotech labs, university campuses, faculty households — often outperforms generic suburban-residential targeting.

Massachusetts Market Context: Greater Boston, Worcester, Springfield, and the Cape

• Greater Boston — about 4.9 million people; biotech and higher-ed corridors in Cambridge, Kendall Square, the Seaport, and the Longwood Medical Area drive demand for cleaning, food truck, daycare (especially infant care), and HVAC service. Boston is one of the most expensive child care markets in the United States, with infant tuition routinely exceeding $30,000/year.
• Cambridge / Somerville — high concentration of biotech, software, and academic households; child care, premium cleaning, and food service businesses cluster here. Cambridge runs separate municipal licensing for several industries.
• Worcester — central Massachusetts’ largest city, growing hospital sector (UMass Memorial), child care desert designation, lower commercial rents than Greater Boston.
• Springfield / Pioneer Valley — western Massachusetts hub, MGM Springfield casino district, and three colleges (Smith, UMass Amherst, Mount Holyoke) create year-round service demand.
• Cape Cod, Martha’s Vineyard, Nantucket — extreme seasonal cycles. Year-round populations are small; summer visitor populations multiply demand 3-5x. Cleaning, food truck, and landscaping operators on the Cape often run hybrid models with staffing surges between Memorial Day and Labor Day.
• MBTA Communities Act / Section 3A — most of the 175 MBTA-served cities and towns are zoning more multi-family housing, creating new family populations near transit. Service businesses opening in MBTA Communities-rezoned districts often align with new family housing rollouts.

Massachusetts Business Guides by Industry

Every industry has different licensing, permit, and insurance requirements in Massachusetts. Select your business type:

• How to Start a Cleaning Service in Massachusetts — services exempt from sales tax, Domestic Workers Bill of Rights, workers’ comp at 1 employee, biotech and higher-ed B2B opportunity
• How to Start a Food Truck in Massachusetts — no statewide license, Boston / Cambridge / Somerville run separate programs, Allergen Awareness Certificate, ANSI Certified Food Protection Manager, 105 CMR 590
• How to Start a Daycare in Massachusetts — EEC licensing under 606 CMR 7.00, LEAD Portal, 1:3 infant ratio, CCFA April 2026 rate increase, QRIS paused
• How to Start an HVAC Business in Massachusetts — Refrigeration Technician license, Construction Supervisor License, Mass Save rebates, A2L refrigerant transition, Stretch Energy Code
• How to Start a Hair Salon in Massachusetts — Board of Cosmetology and Barbering, 1,000-hour cosmetology requirement (one of lowest in US), shop registration, services exempt from sales tax
• How to Start a Landscaping Business in Massachusetts — MDAR Pesticide Applicator license, DigSafe under MGL c.82 § 40 (888-DIG-SAFE), services exempt from sales tax
• How to Start a Private Investigation Business in Massachusetts — State Police Certified Investigator under MGL c.147 §§ 22-30, two-party consent recording state, $5,000 surety bond

Key Massachusetts Business Resources

Resource	What It Covers
Massachusetts Secretary of the Commonwealth — Corporations Division	LLC and corporation formation, annual reports, COFS portal
MassTaxConnect (DOR)	Sales and use tax, withholding, corporate excise registration and filing
Massachusetts Department of Revenue	Personal income tax, corporate excise, sales tax administration, child support enforcement and new hire reporting
Department of Family and Medical Leave (DFML)	PFML registration, contributions, leave administration
Department of Industrial Accidents (DIA)	Workers’ compensation enforcement under MGL c.152
Department of Unemployment Assistance (DUA)	UI tax, EMAC, claim administration
ePLACE Portal	Industry-specific licensing across multiple boards
Division of Occupational Licensure (DOL)	Professional and occupational licensing — cosmetology, real estate, electricians, plumbers, and more

Frequently Asked Questions

How much does it cost to start an LLC in Massachusetts?

The Certificate of Organization filing fee with the Massachusetts Secretary of the Commonwealth is $500 — among the highest LLC formation fees in the United States. The filing is done online through COFS. The annual LLC report is also $500, due each year. A domestic corporation by contrast costs $275 minimum to form (up to 275,000 shares) plus a $125 annual report ($100 electronic / $150 paper or late) — meaningfully cheaper to maintain. Many MA owners choose corporate form specifically to avoid the recurring $500 LLC Annual Report.

What is the Massachusetts Millionaire’s Tax and does it apply to me?

Article 44 of the Massachusetts Constitution (the “Fair Share Amendment,” ratified November 2022, effective tax year 2023) added a 4% surtax on Massachusetts taxable income above an inflation-adjusted threshold. The threshold for tax year 2026 is $1,053,750. The surtax applies regardless of source — wages, capital gains, business income from pass-through entities, rental income. Combined with the 5% flat rate, income above the threshold is taxed at 9%. Most small-business owners do not hit the threshold in normal operating years; it most often matters in years of business sale, large equity event, or major capital gain.

Does Massachusetts require workers’ compensation for part-time employees?

Yes. Massachusetts under MGL c.152 § 25A requires workers’ compensation coverage for any employer with one or more employees — full-time, part-time, family members, or otherwise. There is no minimum threshold. Limited exceptions: corporate officers with 25%+ ownership may exempt themselves, and LLCs/LLPs with no non-member employees are not required to carry coverage. Operating without coverage triggers criminal fines up to $1,500 plus a STOP WORK ORDER and $250/day civil fines. The Department of Industrial Accidents enforces.

Does Massachusetts have a general business license?

Massachusetts has no statewide general business license. Most municipalities also do not require a general business license, though many require a Business Certificate (DBA) at the city/town clerk under MGL c.110 §§ 5-6 if you operate under a name different from your legal name. Industry-specific licenses are required through agency-specific boards (cosmetology, HVAC, child care, private investigators, pesticide applicators), most via the ePLACE Portal.

What is Massachusetts’ sales tax rate and are there local add-ons?

Massachusetts has a flat 6.25% state sales tax with no local add-ons for general sales — making it administratively simpler than home-rule states like Colorado, Illinois, or Louisiana. Two narrow exceptions: cities and towns may add up to 0.75% local meals tax (most major cities have, bringing combined to 7.00%) and a local room occupancy option of up to 6% on top of the 5.7% state rate. Services are generally exempt under MGL c.64H — cleaning, landscaping, child care, salon services, and most professional services are not taxed.

What is PFML in Massachusetts and how much does it cost?

PFML (Paid Family and Medical Leave) is administered by the Massachusetts Department of Family and Medical Leave. The 2026 contribution rate is 0.88% combined for employers with 25 or more covered individuals (split 0.42% employer / 0.28% employee for medical leave plus 0.18% employee-only family leave) and 0.46% employee-only for employers with under 25 covered individuals. Premiums apply on wages up to $184,500 (2026 SS wage cap). The 2026 maximum weekly benefit for an employee on leave is $1,230.39. PFML covers 12 weeks of family leave or 20 weeks of medical leave per year, capped at 26 combined weeks.