Mass. Gen. Laws » Part I Title IX Chapter 63
Massachusetts General Laws

Mass. Gen. Laws ch. 63, § 2 (2026)

Financial institutions; excise rate

✓ current as of July 2026
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Section 2. (a) Except as provided in subsections (b) and (d), every financial institution engaged in business in the commonwealth shall pay, on account of each taxable year, an excise measured by its net income determined to be taxable under section two A at the following rate: taxable years beginning on or after January first, nineteen hundred and ninety-five but before January first, nineteen hundred and ninety-six, twelve and thirteen hundredths percent; on or after January first, nineteen hundred and ninety-six but before January first, nineteen hundred and ninety-seven, eleven and seventy-two hundredths percent; on or after January first, nineteen hundred and ninety-seven but before January first, nineteen hundred and ninety-eight, eleven and thirty-two hundredths percent; on or after January first, nineteen hundred and ninety-eight but before January first, nineteen hundred and ninety-nine, ten and ninety-one hundredths percent; on or after January first, nineteen hundred and ninety-nine, ten and one-half percent; provided, however, that the excise imposed hereunder shall be no less than four hundred and fifty-six dollars.

(b) Any corporation taxable under this section shall pay an excise measured by its net income determined to be taxable under section 2A at the following rates:— (i) for each taxable year beginning on or after January 1, 1995, but before January 1, 2010, 10.5 per cent; (ii) for each taxable year beginning on or after January 1, 2010, but before January 1, 2011, 10.0 per cent; (iii) for each taxable year beginning on or after January 1, 2011, but before January 1, 2012, 9.5 per cent; or (iv) for each taxable year beginning on or after January 1, 2012 and thereafter, 9.0 per cent; provided, however, that in no case shall the excise imposed under this section amount to less than $456.

(c) The commissioner is hereby authorized to adjust the net income of any taxpayer in accordance with the provisions of and the rules and regulations under section 482 of the Internal Revenue Code, as amended from time to time.

(d) Any financial institution that is an S corporation, as defined in section 1361 of the Code, shall not be subject to the tax provided in subsections (a) and (b) and shall instead be subject to the excise in section 2B.

Notes of Decisions
Cited in 5 cases, 1927–2015 · leading case: Capital One Bank v. Comm'r of Revenue, 453 Mass. 1 (Mass. 2009).
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Capital One Bank v. Comm'r of Revenue, 453 Mass. 1 (Mass. 2009). · cites it 3× “1, § 8, the Commonwealth can impose the FIET, pursuant to G. L. c. 63, § 2, on financial institutions 3 that do not have a physical presence in Massachusetts.”
Comm'r of Revenue v. BayBank Middlesex, 659 N.E.2d 1186 (Mass. 1996). “G. L. c. 63, § 2 (1994 ed.). That definition remained for these purposes unchanged until the excise tax on financial institutions was subsumed into a new corporate taxation scheme in 1995.”
Cent. Nat'l Bank v. City of Lynn, 156 N.E. 42 (Mass. 1927). “The tax thus levied, amounting to $13,916, was seasonably paid by the plaintiff, G. L. c. 63, § 2, under sufficient written protest.”
Collector of Taxes v. Nat'l Shawmut Bank, 156 N.E. 48 (Mass. 1927). “This is an action of contract brought under the authority of G. L. c. 63, § 2, by the collector of taxes of the city of Boston to recover a tax assessed for 1924 upon the shares of stock in the defendant bank under G.”
The First Marblehead Corp. v. Comm'r of Revenue, 23 N.E.3d 892 (Mass. 2015). “11 For purposes of G. L. c. 63, §§ 2 and 2A, the term “financial institution” encompasses banks, banking associations, trust companies, and Federal and State savings and loan associations, as well as other types of businesses, including any that “in substantial competition with…”
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