County functions have shifted to the state over time. The state government took over a large share of welfare expenditure in 1968 and is currently in the process of taking over county courts. Comparison of Massachusetts' Tax Structure with that in Other States See Tables 1 and 2. Description of Massachusetts' Major Taxes A. Individual Income Tax. The individual income tax accounts for 43.4 percent of state tax revenue and is the mainstay of the state's tax system.
Taxable income equals gross income less exemptions and deductions.
Deductions are permitted for Social Security contributions, medical expenses, and interest paid other than on home mortgages. A tax credit for state sales taxes paid is allowed for low-income households. See Table 3. B. General Sales Tax Retail sales in Massachusetts are taxed at a 5 percent rate. In addition, the sales tax does not cover services.