Will Massachusetts tax my gain at 9 percent?

Only the part above the threshold. Massachusetts taxes long-term capital gain and ordinary income at the same 5.00 percent and short-term capital gain at 8.5 percent, and taxable income above $1,107,750 for tax year 2026 carries an additional 4 percent surtax. The marginal rate on a dollar above the threshold is 9 percent on long-term gain and 12.5 percent on short-term gain; the blended rate across the whole gain is lower. On a $5,000,000 Massachusetts taxable gain in 2026 the surtax is $155,690 and the blended state rate is about 8.1 percent. Three mechanics matter for an exit. The elective pass-through entity excise is imposed at a statutory rate of 5 percent that cannot be increased to account for the surtax, so the surtax on the gain is paid personally. Installment sale income is counted in the year it is included under M.G.L. c. 62, § 63, so a note spreads the income across years and can reduce the total surtax without avoiding it. And from tax year 2024, couples filing jointly federally must file jointly in Massachusetts, with no exception for couples subject to the surtax, so the threshold cannot be doubled by filing separately. This firm does not give tax advice.

Does a buyer need a Massachusetts real estate license to run my management company after closing?

Not for managing under contracts with the owners. M.G.L. c. 112, § 87QQ exempts a managing agent acting under a contract with the owner of the real estate, and that agent's regular employees, from the broker and salesperson licensing regime, and Massachusetts issues no separate property manager or community association manager license. The exemption is scoped to that activity. Leasing or tenant placement done for owners the company does not manage falls inside § 87PP's definition of brokerage and needs a license, so identify the share of fee income coming from that work before a buyer builds an operating plan on the exemption.

I am selling my office building along with the management company. Does that change anything?

Two things. First, § 87RR provides that "except as otherwise provided" no person shall recover in any suit or action in the courts of the commonwealth for compensation for services as a broker performed within the commonwealth "unless he was a duly licensed broker at the time such services were performed," and the exceptions to that rule sit in § 87QQ. Second, 830 CMR 62B.2.4 applies to closings on or after November 1, 2025 and imposes withholding on transfers of Massachusetts real estate where the gross sales price is $1,000,000 or more. A full-year Massachusetts resident is exempt, as is a transferor that is a pass-through entity, but the regulation expressly treats a disregarded entity such as a single-member LLC as something other than a pass-through entity, so exemption then turns on the beneficial owner's residency, and an owner who has retired out of state loses the resident exemption. Every transferor, exempt or not, has to deliver a Transferor's Certification to the withholding agent on or before the closing, and that is the only opportunity to elect withholding on estimated net gain or to certify an exemption. The withholding agent, meaning the person responsible for closing, files and remits within 10 days after the closing; where there is no withholding agent, the buyer takes that duty on personally.

Why is the buyer asking for a Massachusetts tax clearance before we close?

Whether it can get one depends on how your company is organized. M.G.L. c. 62C, § 51 reaches the sale or transfer, otherwise than in the ordinary course of business, of all or substantially all of the Massachusetts assets of a business corporation as defined in c. 63, § 30, meaning an entity classified for the taxable year as a corporation for federal income tax purposes. Where it applies, notice to the Commissioner is due at least five days before the sale, returns have to be filed and the tax paid, and on failure the commonwealth takes a lien on the assets that is limited to the tax owed and terminates not later than three years after the transfer. Section 52 lets the Commissioner waive that lien, and AP 613 makes the waiver available to corporations and to LLCs filing corporate returns. An LLC taxed as a partnership or a sole proprietorship is outside § 51 entirely: no five-day notice, no lien, and no waiver to obtain or to be missing. By its terms the section also reaches a transfer of the corporation's assets rather than a transfer of equity by its owners, though no cited authority settles that point. What a buyer is protecting against where § 51 does not apply is the entity's own liabilities and the Department's assessment periods, neither of which the three-year lien termination bounds.

Can the buyer rely on the non-compete my general manager already signed?

Only if it complies with the Noncompetition Agreement Act, which reaches employment agreements entered into on or after October 1, 2018. A covenant signed after that date has to recite a garden leave clause or other mutually agreed consideration under § 24L(b)(vii), and one signed after the manager was already employed also needs consideration independent from the continuation of employment plus 10 business days' notice before it takes effect. Two provisions matter more in a sale than either of those. Section 24L(c) makes a covenant unenforceable against anyone terminated without cause or laid off, so a post-closing restructuring releases the person it removes, and § 24L(d) lets a court revise a covenant that is overbroad, which is not the same as curing one that is missing a required element.

Property Management in Massachusetts

Massachusetts moved the friction off the license and onto the deposit book.

Massachusetts exempts third-party managing agents from real estate licensing by name, so the license question that draws the bidder list in many states does very little work here. What replaces it is a security deposit statute that trebles damages against the lessor and the lessor's agent and counts per tenant, and a noncompetition statute that leaves the selling owner free while putting a price on restraining the general managers a buyer wants to keep. The 4 percent surtax, the corporate tax lien and the 2025 real estate withholding regulation are in the questions below.

Boston-Cambridge-Newton / Worcester / Springfield / Barnstable Town (Cape Cod)

Section 87QQ exempts the managing agent, and stops at the contract

Massachusetts issues no property manager license and no community association manager license. The Board of Registration of Real Estate Brokers and Salespersons, which sits inside the Division of Occupational Licensure, licenses brokers, salespersons, real estate businesses and schools, and M.G.L. c. 112, § 87QQ exempts from that regime by name "a managing agent while acting under a contract with the owner of the real estate or the regular employees of such agent acting in his behalf in the regular course of their employment." The same section separately exempts a person acting for themselves as owner or lessor, together with the regular employees of such a person, where the acts are performed in the regular course of, or as an incident to, the management of that real estate.

No Massachusetts credential stands between a buyer and this book. A buyer does not have to hold a broker license, does not have to seat a qualifying broker before closing, and never meets the asset-sale problem of a credential that cannot be assigned with the contracts. Nothing in § 87QQ conditions the exemption on registration either, so no application is filed and no approval is waited on at the Board of Registration when a Massachusetts management company changes hands.

The exemption attaches to an activity, not to a company. It runs to a managing agent acting under a contract with the owner of the real estate. Tenant placement or leasing performed for owners the company does not manage sits outside that description, and § 87PP defines a real estate broker by reference to selling, exchanging, purchasing, renting, leasing, listing and dealing in options on real estate for others. A property management company that runs a leasing desk for non-client landlords, or takes placement fees on buildings it does not manage, has fee income on the licensed side of a line the rest of its revenue never crosses. That income belongs on its own line, separate from management fees.

Section 15B trebles per tenant, and it names the agent

A residential security deposit in Massachusetts has to be held in a separate, interest-bearing account in a bank located within the commonwealth, beyond the claims of the lessor's creditors, and M.G.L. c. 186, § 15B(1)(e) forbids commingling it with other funds. Deposits swept into the operating account fail the separation requirement. A pooled account at an out-of-state bank fails separation and location both.

The remedy is what makes this the dominant diligence item on a Massachusetts residential book. Section 15B(7) awards the tenant "three times the amount of such security deposit or balance thereof to which the tenant is entitled plus interest at the rate of five per cent from the date when such payment became due, together with court costs and reasonable attorney's fees." It is triggered by a failure of "the lessor or his agent" under clauses (a), (d) and (e) of subsection (6): failure to deposit the funds as the section requires, failure to transfer them to a successor in interest, and failure to return the deposit within thirty days after the tenancy ends. Trebling reaches those designated failures rather than every § 15B violation.

The arithmetic runs per tenant rather than per portfolio. A pooled account standing behind several hundred residential doors is not one exposure, it is one claim for each deposit, each carrying interest, costs and fees. How far agent liability runs against a third-party manager operating under an owner's management contract is fact-specific and belongs with Massachusetts counsel.

St. 2025, c. 9, §§ 54 and 55, effective August 1, 2025, amended § 15B(1)(b) so that no lessor or agent of the lessor may require a tenant or prospective tenant to pay, to the lessor or to an agent of the lessor, any amount in excess of the statutory maximums. The same act authorized the Executive Office of Housing and Livable Communities to promulgate regulations permitting the payment of a fee in lieu of a security deposit. Whether the target has adopted a fee-in-lieu program, and whether regulations authorizing one are in force, decides how many of its tenancies carry a deposit at all.

An equity buyer takes the entity that holds the deposits and whatever § 15B(7) can be asserted against it for. An asset buyer takes the § 15B(6)(d) obligation to transfer those deposits to a successor in interest, and a failure at that step is itself one of the trebling clauses.

Garden leave at 50 percent, and the covenant a layoff cancels

The Massachusetts Noncompetition Agreement Act does not apply to the covenant a buyer takes from the owner. M.G.L. c. 149, § 24L(a) excludes from the definition of a noncompetition agreement those "made in connection with the sale of a business entity or substantially all of the operating assets of a business entity or partnership, or otherwise disposing of the ownership interest of a business entity or partnership, or division or subsidiary thereof," where the restricted party is a significant owner, member or partner who will receive significant consideration or benefit from the sale. No 12-month cap, no garden leave requirement and no notice period reaches that covenant. It is judged under Massachusetts common law.

Neither significant owner nor significant consideration is defined in § 24L. A minority holder rolling a small stake, or a founder whose consideration sits mostly in a future earnout, can be argued onto the employment side of the exclusion, where the covenant has to satisfy every requirement of the Act. A covenant sitting in the seller's post-closing employment agreement gives that argument its best facts.

Everyone below the owner sits on the other side of the line. For a manager who is not a significant owner, § 24L(b)(vii) requires the covenant to be supported by a garden leave clause or other mutually agreed consideration, specified in the agreement itself. A qualifying garden leave clause pays at least 50 percent of the employee's highest annualized base salary in the 2 years preceding termination, pro rata across the restricted period, and the employer may not unilaterally discontinue it except on the employee's breach. The restricted period itself may not exceed 12 months, extending to 2 years only where the employee has breached a fiduciary duty or unlawfully taken property. Massachusetts sets no dollar wage or earnings threshold anywhere in § 24L; what § 24L(c) turns on instead is exempt or nonexempt status under the Fair Labor Standards Act.

The posture that matters in a sale is a covenant signed after employment has already begun, which is what a buyer creates when it re-papers incumbent managers at closing. Section 24L(b)(ii) requires fair and reasonable consideration independent from the continuation of employment, and at least 10 business days' notice before the agreement takes effect. Continued employment on its own is not consideration. The Act reaches only employment agreements entered into on or after October 1, 2018, so the date on each manager's covenant decides whether § 24L applies to it at all.

Section 24L(c) removes the people a restructuring buyer is most likely to move. A noncompetition agreement is unenforceable against employees classified as nonexempt under the Fair Labor Standards Act, against students, against employees aged 18 or younger, and against "employees that have been terminated without cause or laid off." A buyer that consolidates two offices after closing and lets a regional manager go has released that manager the day it does so.

Section 24L(d) lets a court "reform or otherwise revise a noncompetition agreement so as to render it valid and enforceable to the extent necessary to protect the applicable legitimate business interests." Whether that power can rescue a covenant missing a mandatory element, the (b)(vii) consideration or the notice required by (b)(i) or (b)(ii), has not been settled by a Massachusetts appellate decision, so an agreement that skipped a step is a different problem from one that reached too far. Section 24L(b)(v) presumes reasonable a geographic reach limited to the areas where the employee provided services or had a material presence or influence in the last 2 years of employment. Section 24L(e) voids a choice-of-law clause that would have the effect of avoiding the section's requirements for an employee who has been a Massachusetts resident or employed in Massachusetts for at least the 30 days preceding termination. Section 24L(f) sets venue in the county where the employee resides unless the employer and employee agree on Suffolk County, where the Superior Court or its Business Litigation Session has exclusive jurisdiction. A buyer that wants those cases in Suffolk County has to negotiate for it in each manager's agreement before closing, because the default is the county where the manager lives.

Questions Massachusetts sellers ask

Will Massachusetts tax my gain at 9 percent?: Only the part above the threshold. Massachusetts taxes long-term capital gain and ordinary income at the same 5.00 percent and short-term capital gain at 8.5 percent, and taxable income above $1,107,750 for tax year 2026 carries an additional 4 percent surtax. The marginal rate on a dollar above the threshold is 9 percent on long-term gain and 12.5 percent on short-term gain; the blended rate across the whole gain is lower. On a $5,000,000 Massachusetts taxable gain in 2026 the surtax is $155,690 and the blended state rate is about 8.1 percent. Three mechanics matter for an exit. The elective pass-through entity excise is imposed at a statutory rate of 5 percent that cannot be increased to account for the surtax, so the surtax on the gain is paid personally. Installment sale income is counted in the year it is included under M.G.L. c. 62, § 63, so a note spreads the income across years and can reduce the total surtax without avoiding it. And from tax year 2024, couples filing jointly federally must file jointly in Massachusetts, with no exception for couples subject to the surtax, so the threshold cannot be doubled by filing separately. This firm does not give tax advice.
Does a buyer need a Massachusetts real estate license to run my management company after closing?: Not for managing under contracts with the owners. M.G.L. c. 112, § 87QQ exempts a managing agent acting under a contract with the owner of the real estate, and that agent's regular employees, from the broker and salesperson licensing regime, and Massachusetts issues no separate property manager or community association manager license. The exemption is scoped to that activity. Leasing or tenant placement done for owners the company does not manage falls inside § 87PP's definition of brokerage and needs a license, so identify the share of fee income coming from that work before a buyer builds an operating plan on the exemption.
I am selling my office building along with the management company. Does that change anything?: Two things. First, § 87RR provides that "except as otherwise provided" no person shall recover in any suit or action in the courts of the commonwealth for compensation for services as a broker performed within the commonwealth "unless he was a duly licensed broker at the time such services were performed," and the exceptions to that rule sit in § 87QQ. Second, 830 CMR 62B.2.4 applies to closings on or after November 1, 2025 and imposes withholding on transfers of Massachusetts real estate where the gross sales price is $1,000,000 or more. A full-year Massachusetts resident is exempt, as is a transferor that is a pass-through entity, but the regulation expressly treats a disregarded entity such as a single-member LLC as something other than a pass-through entity, so exemption then turns on the beneficial owner's residency, and an owner who has retired out of state loses the resident exemption. Every transferor, exempt or not, has to deliver a Transferor's Certification to the withholding agent on or before the closing, and that is the only opportunity to elect withholding on estimated net gain or to certify an exemption. The withholding agent, meaning the person responsible for closing, files and remits within 10 days after the closing; where there is no withholding agent, the buyer takes that duty on personally.
Why is the buyer asking for a Massachusetts tax clearance before we close?: Whether it can get one depends on how your company is organized. M.G.L. c. 62C, § 51 reaches the sale or transfer, otherwise than in the ordinary course of business, of all or substantially all of the Massachusetts assets of a business corporation as defined in c. 63, § 30, meaning an entity classified for the taxable year as a corporation for federal income tax purposes. Where it applies, notice to the Commissioner is due at least five days before the sale, returns have to be filed and the tax paid, and on failure the commonwealth takes a lien on the assets that is limited to the tax owed and terminates not later than three years after the transfer. Section 52 lets the Commissioner waive that lien, and AP 613 makes the waiver available to corporations and to LLCs filing corporate returns. An LLC taxed as a partnership or a sole proprietorship is outside § 51 entirely: no five-day notice, no lien, and no waiver to obtain or to be missing. By its terms the section also reaches a transfer of the corporation's assets rather than a transfer of equity by its owners, though no cited authority settles that point. What a buyer is protecting against where § 51 does not apply is the entity's own liabilities and the Department's assessment periods, neither of which the three-year lien termination bounds.
Can the buyer rely on the non-compete my general manager already signed?: Only if it complies with the Noncompetition Agreement Act, which reaches employment agreements entered into on or after October 1, 2018. A covenant signed after that date has to recite a garden leave clause or other mutually agreed consideration under § 24L(b)(vii), and one signed after the manager was already employed also needs consideration independent from the continuation of employment plus 10 business days' notice before it takes effect. Two provisions matter more in a sale than either of those. Section 24L(c) makes a covenant unenforceable against anyone terminated without cause or laid off, so a post-closing restructuring releases the person it removes, and § 24L(d) lets a court revise a covenant that is overbroad, which is not the same as curing one that is missing a required element.

Where these facts come from

Everything above that is a rule rather than a judgment is listed here with its publisher and the date it was checked. Licensing, tax and non-compete rules change, sometimes without much notice. None of this is legal or tax advice, and it is not a substitute for your own counsel and CPA.

M.G.L. c. 112, § 87QQ exempts from the broker and salesperson licensing requirements of §§ 87PP to 87DDD "a managing agent while acting under a contract with the owner of the real estate or the regular employees of such agent acting in his behalf in the regular course of their employment," and separately exempts any person acting for himself as owner or lessor, and the regular employees of any person aforesaid, with respect to such real estate, if such acts are performed in the regular course of, or as an incident to, the management of such real estate. Section 87QQ also carries the exceptions referred to by the opening words of § 87RR.
Massachusetts General Court, M.G.L. c. 112, § 87QQ. Checked 2026-09-07.
The exemption is written to an activity, a managing agent acting under a contract with the owner, rather than to a company or a credential. Activity outside that description, including leasing or tenant placement for owners the company does not manage, is not covered by it. Nothing in the section conditions the exemption on any registration or filing.
The Board of Registration of Real Estate Brokers and Salespersons, within the Division of Occupational Licensure, licenses real estate brokers, salespersons, real estate businesses and real estate schools. No property manager license and no community association manager license appears among the credentials the Board issues.
Massachusetts Division of Occupational Licensure, Board of Registration of Real Estate Brokers and Salespersons. Checked 2026-09.
This is a negative proposition, confirmed against the list of licenses the Board itself issues rather than against any statement that no such license exists. Mass.gov pages return HTTP 403 to automated fetches, so the listing should be re-checked in a browser, and the scope of any specific activity confirmed with the Board or with Massachusetts counsel.
M.G.L. c. 112, § 87PP defines a real estate broker by reference to acts done for another and for consideration in selling, exchanging, purchasing, renting, leasing, listing or dealing in options on real estate, and defines "real estate" as "any and every estate or interest in land and the improvements thereon, whether corporeal or incorporeal, whether freehold or non-freehold." The words "business," "business opportunity" and "goodwill" do not appear in the section.
Massachusetts General Court, M.G.L. c. 112, § 87PP. Checked 2026-09-07.
The definition establishes what the real estate licensing regime reaches. It does not address any other licensing or registration regime that may apply to a transaction, and no conclusion about regimes outside c. 112 is drawn from it here. We found no separate Massachusetts business-opportunity or business-broker licensing statute in the course of this research; that is the result of a search rather than a statement of law.
M.G.L. c. 112, § 87RR provides that, except as otherwise provided, no person shall recover in any suit or action in the courts of the commonwealth for compensation for services as a broker performed within the commonwealth unless he was a duly licensed broker at the time such services were performed.
Massachusetts General Court, M.G.L. c. 112, § 87RR. Checked 2026-09-07.
The opening words "except as otherwise provided" are load-bearing and are quoted here rather than elided; the exceptions sit in § 87QQ. The operative sanction under this section is the loss of the fee rather than a penalty.
M.G.L. c. 186, § 15B(3)(a) requires a residential security deposit to be held in a separate, interest-bearing account in a bank located within the commonwealth, beyond the claims of the lessor's creditors, and § 15B(1)(e) forbids commingling. Section 15B(7) provides that where the lessor or his agent fails to comply with clauses (a), (d) or (e) of subsection (6), the tenant shall be awarded damages in an amount equal to "three times the amount of such security deposit or balance thereof to which the tenant is entitled plus interest at the rate of five per cent from the date when such payment became due, together with court costs and reasonable attorney's fees." The designated failures include failing to deposit the funds as the section requires, failing to transfer the deposit to a successor in interest, and failing to return the deposit within thirty days after termination of the tenancy. St. 2025, c. 9, §§ 54 and 55, effective August 1, 2025, amended § 15B(1)(b) so that no lessor or agent of the lessor may require a tenant or prospective tenant to pay, to the lessor or to an agent of the lessor, any amount in excess of the stated maximums, and authorized the Executive Office of Housing and Livable Communities to promulgate regulations authorizing the payment of a fee in lieu of payment of a security deposit.
Massachusetts General Court, M.G.L. c. 186, § 15B. Checked 2026-09-07.
Trebling attaches to the failures the statute designates, not to every § 15B violation. The statutory text reaches "the lessor or his agent" on its face; how far agent liability runs against a third-party managing agent operating under an owner's management contract is fact-specific and is not settled by the text alone. The malegislature page carries live effective-date markers for the 2025 amendments and should be read with them.
The Department of Revenue's rate table sets Massachusetts long-term capital gains and ordinary income at 5.00% and short-term capital gains at 8.5%. Massachusetts gives no preferential rate to long-term capital gain.
Massachusetts Department of Revenue, Massachusetts tax rates. Checked 2026-09-07.
The rate table was last shown as updated December 30, 2025. Mass.gov returns HTTP 403 to automated fetches, so the rates and the update date should be confirmed in a browser for the tax year in which the gain is actually recognized. Rates for collectibles are not reproduced here because they cannot bear on this transaction type.
Taxable income exceeding $1,107,750 for tax year 2026 carries an additional 4% surtax; the threshold was $1,083,150 for 2025. Only the portion of a taxpayer's taxable income that exceeds the threshold for the tax year is subject to the surtax, which produces a 9% marginal rate on long-term capital gain and ordinary income and 12.5% on short-term capital gain. Taxable income for surtax purposes is the sum of Part A, Part B and Part C taxable income, with any negative Part treated as zero. Installment sale income is counted in the year in which it is included under M.G.L. c. 62, § 63. Starting with tax year 2024, couples filing jointly federally must file jointly in Massachusetts, with no exception for married couples subject to the 4% surtax. The elective pass-through entity excise is imposed at a statutory rate of 5%, which cannot be increased to account for the 4% surtax. Applying the published rate and threshold, a $5,000,000 Massachusetts taxable gain recognized in tax year 2026 carries $155,690 of surtax, being 4% of $3,892,250, and a blended Massachusetts rate of about 8.1%.
Massachusetts Department of Revenue, Massachusetts 4% surtax on taxable income. Checked 2026-09-07.
The Department's guidance page was last shown as updated June 1, 2026. The $5,000,000 example is arithmetic applied to the published rate and threshold, not a Department computation. Mass.gov returns HTTP 403 to automated fetches, and the 2026 threshold should be confirmed directly on the Department's page before it is used in a net-proceeds model. Nothing here is tax advice.
M.G.L. c. 62C, § 51 requires that at least five days prior to the sale or transfer, otherwise than in the ordinary course of business, of all or substantially all of the assets situated in the commonwealth of a business corporation as defined in section 30 of chapter 63, the corporation or any person in interest notify the Commissioner in writing of the proposed sale, its price, terms and conditions, and the character and location of the assets, file all returns necessary to determine the taxes due to the date of sale, and pay those taxes. On failure, the commonwealth has for its exclusive benefit a lien upon all of the assets of the corporation in the commonwealth, effective immediately prior to the sale or transfer, to the extent necessary to satisfy those taxes; the lien is limited to the tax owed and terminates not later than three years after the date of the sale or transfer. The section does not apply to sales or transfers by receivers, assignees for the benefit of creditors, trustees in bankruptcy or public officers acting under judicial process, and, apart from transfers made as security for an obligation not incurred in good faith for the purposes of the business, does not apply to transfers by way of security. Section 52 authorizes the Commissioner to waive the lien.
Massachusetts General Court, M.G.L. c. 62C, §§ 51 and 52. Checked 2026-09-07.
A transfer by way of security is a pledge of assets as collateral; it has nothing to do with a sale of stock or membership interests. Section 51 is triggered by a transfer of the corporation's assets rather than by a transfer of equity by its owners, and that construction is not settled by any authority cited here. The three-year termination bounds this lien only. It does not bound the target's underlying liabilities, trustee-tax exposure, or the Department's assessment periods.
M.G.L. c. 63, § 30(1) defines a "business corporation" as an entity that is classified for the taxable year as a corporation for federal income tax purposes.
Massachusetts General Court, M.G.L. c. 63, § 30. Checked 2026-09-07.
This definition is what gates M.G.L. c. 62C, § 51. An LLC taxed as a partnership, or a sole proprietorship, is not a business corporation for that purpose.
Administrative Procedure 613 states that the Waiver of Corporate Tax Lien is available to corporations that file corporate returns, LLCs that file corporate or corporate combined returns, and disregarded LLCs filing corporate combined returns, and that non-profit corporations are ineligible because they do not file corporate returns. Requests are made through MassTaxConnect, which the Department strongly recommends; the Department warns that processing a paper application can take 4 to 6 weeks. The same procedure covers the Certificate of Good Standing and/or Tax Compliance.
Massachusetts Department of Revenue, Administrative Procedure 613. Checked 2026-09-07.
AP 613 carries a 01/30/2026 date. The 4 to 6 week figure applies to the paper channel that the Department steers filers away from, not to the MassTaxConnect request, and neither figure is used in the page prose. AP 613 does not address sole proprietors; that they cannot obtain a waiver follows from c. 63, § 30(1) rather than from this document. Mass.gov returns HTTP 403 to automated fetches and the procedure should be confirmed in a browser.
M.G.L. c. 149, § 24L(a) excludes from the definition of a noncompetition agreement, and therefore from the requirements of the Act, "noncompetition agreements made in connection with the sale of a business entity or substantially all of the operating assets of a business entity or partnership, or otherwise disposing of the ownership interest of a business entity or partnership, or division or subsidiary thereof, when the party restricted by the noncompetition agreement is a significant owner of, or member or partner in, the business entity who will receive significant consideration or benefit from the sale or disposal." Section 24L(b) sets eight requirements, (i) through (viii), for an enforceable employment covenant: (b)(i) governs agreements at the commencement of employment, requiring delivery by the earlier of a formal offer or 10 business days before employment starts and a statement of the right to consult counsel; (b)(ii) requires that an agreement entered into after commencement of employment be supported by fair and reasonable consideration independent from the continuation of employment, with notice at least 10 business days before the agreement is to be effective; (b)(v) presumes reasonable the geographic reach limited to areas in which the employee provided services or had a material presence or influence within the last 2 years of employment; (b)(vii) requires a garden leave clause or other mutually-agreed upon consideration specified in the agreement, a qualifying garden leave clause paying on a pro-rata basis at least 50 percent of the employee's highest annualized base salary paid within the 2 years preceding termination and not permitting the employer, except in the event of a breach by the employee, to unilaterally discontinue or fail or refuse to make the payments; and (b)(viii) requires that the agreement be consonant with public policy. The restricted period may not exceed 12 months, extending to 2 years only where the employee has breached a fiduciary duty or unlawfully taken property. Section 24L(c) makes a noncompetition agreement unenforceable against employees classified as nonexempt under the Fair Labor Standards Act, against students, against employees aged 18 or younger, and against "employees that have been terminated without cause or laid off," and provides that an unenforceable noncompetition agreement does not render void or unenforceable the remainder of the contract. Section 24L(d) provides that "a court may, in its discretion, reform or otherwise revise a noncompetition agreement so as to render it valid and enforceable to the extent necessary to protect the applicable legitimate business interests." Section 24L(e) voids a choice-of-law provision that would have the effect of avoiding the requirements of the section for an employee who has been a resident of or employed in Massachusetts for at least 30 days immediately preceding termination. Section 24L(f) requires suit in the county where the employee resides or, if mutually agreed, in Suffolk county, providing that in any such action brought in Suffolk county the superior court or the business litigation session of the superior court shall have exclusive jurisdiction.
Massachusetts General Court, M.G.L. c. 149, § 24L. Checked 2026-09-07.
Section 24L contains no dollar wage or earnings threshold. The only exception to the no-discontinuation rule in (b)(vii) is a breach by the employee; the fiduciary-duty and unlawful-taking facts govern the extension of the restricted period from 12 months to 2 years and are a separate provision. Section 24L(e) voids the offending choice-of-law provision and says nothing about the remainder of the agreement. Exclusive jurisdiction under (f) vests in the Superior Court or its Business Litigation Session as against other trial court departments; it does not route a case into the Business Litigation Session, whose own admission criteria govern. No controlling appellate construction of the (d) reformation power establishes whether it can cure a covenant missing a mandatory (b) element as opposed to one that is merely overbroad.
The Massachusetts Noncompetition Agreement Act applies to employee noncompetition agreements entered into on or after October 1, 2018.
Massachusetts General Court, St. 2018, c. 228, § 71. Checked 2026-09-07.
The applicability date sits in the uncodified session law rather than in M.G.L. c. 149, § 24L itself, which is why it is cited separately here.
830 CMR 62B.2.4 is effective for real estate closings that occur on or after November 1, 2025 and was promulgated August 15, 2025. It imposes withholding on transfers of Massachusetts real estate where the gross sales price equals or exceeds a Withholding Threshold of $1,000,000. Default withholding is the transferor's share of gross sales price multiplied by 4%, plus an additional 4% on the portion exceeding the M.G.L. c. 62, § 4(d) surtax threshold; a transferor may instead elect withholding on estimated net gain. The Withholding Agent is the person responsible for closing, including an attorney, escrow company or title company, and for transfers where there is no Withholding Agent the Transferee is required to act as the Withholding Agent. Each transferor must complete a Transferor's Certification and deliver it to the Withholding Agent on or before the closing; the Withholding Agent files the return, remits the tax and transmits the certifications electronically within 10 days of the closing, and withheld tax is deemed to be held in trust for the commonwealth. Exempt transferors include full-year Massachusetts residents, Pass-through Entities, publicly traded partnerships, resident estates and trusts, and corporations with a continuing Massachusetts business presence, each of which must still certify. An entity that is disregarded for tax purposes, such as a grantor-type trust or single-member limited liability company, is not considered a Pass-through Entity. Under 830 CMR 62B.2.4(4)(c)2.b a corporate seller cannot claim the continuing-Massachusetts-business-presence exemption where the same transaction is one to which M.G.L. c. 62C, § 51 applies.
Massachusetts Department of Revenue, 830 CMR 62B.2.4. Checked 2026-09-07.
This regulation governs the conveyance of real property, not the sale of a management company, and applies here only where a transaction conveys real property alongside the business. Exemption runs to the transferor, not to the property or to what holds it. The seller's deadline (certification to the withholding agent on or before closing) and the withholding agent's deadline (filing and remittance within 10 days after closing) are different obligations held by different parties. Mass.gov returns HTTP 403 to automated fetches; confirm in a browser.

Page last reviewed 2026-09-07.

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