1.500 Preferential Rate of Taxation

Preferential Rate of Taxation

1.500

9.2

9.7

14.2

13.3

13.1

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1.501
Small Business Stock, Capital Gains Tax Rate

Massachusetts provides a reduced tax rate for the 50% of such gains that are included in income, if certain additional requirements are met. Specifically, gains on the sale of qualified small business stock are taxed at a reduced rate of 3%, instead of the generally applicable long-term gain rate of 5%, if the stock that is sold (i) was acquired within five years of the corporation's date of incorporation (ii) was held for three years or more prior to the sale, and (iii) was issued by a C corporation or S corporation which (a) is domiciled in Massachusetts, (b) was incorporated on or after January 1, 2011, (c) had less than $50 million in assets at the time of investment, and (d) complies with certain of the "active business" requirements of IRC § 1202.

IRC § 1202; M.G.L. c. 62, § 4(c)

13.1

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