Massachusetts Eyes Expanding Capital Gains Tax After Court Case

Massachusetts Gov. Maura Healey has proposed expanding the state’s authority to tax capital gains, in response to a 2022 high court ruling rejecting a $2.63 million assessment on an out-of-state company.

The policy pitch, included in the Democratic governor’s $62 billion budget plan for fiscal 2026, would require nonresidents to either allocate or apportion gains on the sale of interest in a pass-through entity doing business in Massachusetts either directly or through the ownership of other partnerships, S Corporations, or LLCs.

The move comes nearly three years after the Massachusetts Supreme Judicial Court barred the state from taxing Florida-based ...