Massachusetts Stock Sale Tax Case Poses Threat to Innovation (1)

The Massachusetts Appeals Court is set to hear oral arguments Tuesday in an income tax case involving a nonresident that has the potential to discourage entrepreneurs from starting businesses in the state, taxpayer advocates warn.

New Hampshire resident Craig Welch is asking the court to reject a $300,000 Massachusetts income tax assessment on 100% of the capital gain he made selling stock in his risk management services company, AcadiaSoft Inc.

Welch lived in Massachusetts from the time he co-founded the company until shortly before the sale, leading the state to argue that the gain was connected to his work ...