Economy

See also: List of Massachusetts locations by per capita income and Category:Economy of Massachusetts

The United States Bureau of Economic Analysis estimates that the Massachusetts gross state product in 2008 was US$365 billion. The per capita personal income in 2008 was $50,735, making it the third highest state in the nation. 13 Fortune 500 companies are located in Massachusetts, the largest of which are the Liberty Mutual Insurance Group of Boston and MassMutual Financial Services of Springfield. CNBC's list of "Top States for Business for 2010" has recognized Massachusetts as the fifth best state in the nation.

Sectors vital to the Massachusetts economy include higher education, biotechnology, finance, health care, and tourism. Route 128 was a major center for the development of minicomputers and electronics. High technology remains an important sector, though few of the largest technology companies are based there. In recent years tourism has played an ever-important role in the state's economy, with Boston and Cape Cod being the leading destinations. Other popular tourist destinations include Salem, Plymouth and the Berkshires. As of June 2012, the state's unemployment rate was 6.0%, well below the national level of 8.2%.

Cape Cod Bay, a leading tourist destination in Massachusetts. Tourism is of growing importance to the state's economy.

As of 2005, there were 7,700 farms in Massachusetts encompassing a total of 520,000 acres (2,100 km2), averaging 68 acres (0.28 km2) apiece. Almost 2,300 of the state's 6,100 farms grossed under $2,500 in 2007. Particular agricultural products of note include tobacco, livestock, and fruits, tree nuts, and berries, for which the state is nationally ranked 11th, 17th, and 16th, respectively. Massachusetts is the second-largest cranberry-producing state in the union (after Wisconsin).

Taxation

The overall state and local tax burden in Massachusetts ranks 11th highest in the United States. Massachusetts has a flat-rate personal income tax of 5.25%, after a 2002 voter referendum to eventually lower the rate to 5.0%. There is an exemption for income below a threshold that varies from year to year. The corporate income tax rate is 8.8%, and the short-term capital gains tax rate is 12%.

The state imposes a 6.25% sales tax on retail sales of tangible personal property—except for groceries, clothing (up to $175.00), and periodicals. The sales tax is charged on clothing that costs more than $175.00, for the amount exceeding $175.00. All real and tangible personal property located within the Commonwealth of Massachusetts is taxable unless specifically exempted by statute. Property taxes in the state were the eighth highest in the nation. There is no inheritance tax and limited Massachusetts estate tax related to federal estate tax collection.

Energy

Massachusetts' electricity generation market was made competitive in 1998, enabling retail customers to change suppliers without changing utility companies. Though most residential customers remain with incumbent generators, most of the 4.3 billion kilowatt-hours consumed in the state in July 2011 were generated competitively. In 2011, Massachusetts was ranked as the most energy efficient state in America.