The rules where you work $17
A first 30 days checklist, everyday forms, licenses, workers’ comp and taxes for Massachusetts, with a yearly calendar. Instant PDF download.
Buy the packet: $17Digital product, all sales final. Informational only, not legal, financial, tax or business advice.
What Massachusetts expects from a new trade business
Massachusetts splits the paperwork in two: a home improvement registration for who you contract with, and a construction supervisor license for what you build. Comp covers every employee from the first hour. And an LLC here costs $500 to form and $500 every year after, one of the steepest bills in the country.
Two credentials: HIC registration and the CSL
Massachusetts has two credentials and they aren't interchangeable. Home Improvement Contractor (HIC) registration, through the Office of Consumer Affairs and Business Regulation, covers contracting on an existing owner-occupied home of 1 to 4 units. The Construction Supervisor License (CSL) means someone licensed oversees the structural work. A kitchen job can need both.
The state's job chart settles most questions. Decks, windows, siding, roofing and sheetrock need both. Exterior paint needs only HIC. Interior paint and finish flooring need neither.
Part-timers, read this: HIC registration isn't required for a project under $500, or if you work other than full-time and grossed under $5,000 as a contractor in the past 12 months. That doesn't excuse a CSL when the work calls for one. Electricians and plumbers work under their own licenses.
Operating without a required registration can mean a fine up to $5,000, up to two years in jail, or both. Home jobs over $1,000 need a written contract, and the deposit can't be more than the greater of one-third of the price or the actual cost of special-order or custom materials.
Source: M.G.L. c.142A s.9 (registration) · M.G.L. c.142A s.14 (exemptions) · M.G.L. c.142A s.2 (contract requirements) · M.G.L. c.142A s.19 (penalties) · Mass.gov: HIC contractor resources (job chart) · Mass.gov: When is a Construction Supervisor License required?
Who to call: an attorney near you
Comp from your first employee, any hours
Massachusetts has no minimum headcount. Any employer with any employee, for any number of hours, carries workers' comp. Construction gets no separate rule because everyone is already in.
Owners have more room. A sole proprietor or partnership chooses whether to cover itself. A corporate officer who owns at least 25% can file Form 153 with the Department of Industrial Accidents for an exemption. The statute sections reviewed for this guide don't say how LLC members are treated, so ask the Department or your agent before you skip coverage on yourself. None of that reaches anyone else on your payroll.
Hiring an uninsured sub is a risk too. If a sub's worker gets hurt on your job, your insurer can be on the hook to pay that worker, and then it can come after the uninsured sub to recover.
Caught without coverage, you get a stop work order that takes effect on service, plus $100 a day. Lose the appeal and it's $250 a day. An insurance agent who writes contractors can price a policy for your trade.
Source: Mass.gov: Workers' Compensation Insurance Requirements · Mass.gov: Request an exemption from workers' compensation coverage · M.G.L. c.152 s.18 (subcontractors) · M.G.L. c.152 s.25C (stop work orders) · M.G.L. c.152 s.1 (employee definition, owner options)
Who to call: an insurance agent near you
Getting paid: three steps at the registry of deeds
A Massachusetts lien is built in steps, and each filing goes in the registry of deeds where the land sits. The lien under these sections rests on a written contract, so get one signed.
- Notice of contract: file by the earliest of 60 days after a recorded notice of substantial completion, 90 days after a recorded notice of termination, or 90 days after the last work on the job.
- Statement of account: file by the earliest of 90 days after notice of substantial completion, 120 days after notice of termination, or 120 days after the last work.
- Lawsuit: start it within 90 days of filing the statement, then record a copy of the complaint at the registry within 30 days of starting the suit. Miss either and the lien dissolves.
Watch the registry: a recorded notice of substantial completion shortens your clocks.
No written contract? A limited lien covers your own labor: at most 30 days of work done in the 90 days before you file your statement.
Subs need to give the owner actual notice of the filing. If you have no direct contract with the original contractor, send a notice of identification by certified mail within 30 days of starting. Skip it and your lien may be capped at what's owed under the sub above you.
Your lien generally won't beat a recorded mortgage for money advanced or committed before your notice of contract, with a 25-day grace after a proper partial waiver. A construction attorney can set these forms up once.
Source: M.G.L. c.254 s.2 (notice of contract) · M.G.L. c.254 s.4 (subcontractors, notice of identification) · M.G.L. c.254 s.8 (statement of account) · M.G.L. c.254 s.11 (enforcement suit) · M.G.L. c.254 s.1 (labor lien) · M.G.L. c.254 s.2A (notice of substantial completion) · M.G.L. c.254 s.5 (recording the complaint) · M.G.L. c.254 s.7 (mortgage priority)
Who to call: an attorney near you
You pay the tax on materials, with one exception
Massachusetts sales tax is 6.25%. On a contract to build, remodel or repair real property, the Revenue Department treats you as the consumer of your materials. You pay sales tax when you buy them and work it into your price.
The exception trips people up. If you install a complete unit of a standard item and all you do is install, apply or connect it, you're acting as a retailer. Then you collect sales tax from the customer on the item. The Revenue Department's example for electricians: swapping a broken ceiling fan and stating the fan and the labor separately means tax on the fan, none on the labor. The state's regulation works the same way for a plumber who replaces a faucet and bills the part separately.
A lump-sum rewire, on the other hand, leaves the electrician as the consumer of everything he bought. Public works can qualify for exemption with Form ST-5C and the agency's certificate. How the contract is written can change the answer, so confirm your usual jobs with the Department of Revenue or a CPA who works with contractors before your first bid.
Source: Mass.gov: Sales and Use Tax guide (contractors) · Mass.gov: Sales Tax Guide for Electricians · M.G.L. c.64H s.2 (rate) · 830 CMR 64H.1.1 (service enterprises)
Who to call: a CPA or tax pro near you
A $500 LLC, and $500 every year after
Forming an LLC with the Secretary of the Commonwealth costs $500. The annual report is another $500. Ask the Corporations Division for your due date and what happens if you file late. No franchise tax and no publication.
That recurring $500 is worth weighing while you're still part-time. Run it against your numbers before you file.
Pass-through profit lands on your personal return. The statute says the rate on most income can't go below 5%. Get the current rate, and whether any surtax reaches you, from the Department of Revenue.
When an S-corp election pays off is a numbers question. Bring what the business clears to a CPA who works with contractors.
Source: M.G.L. c.156C s.12 (LLC filing and annual report fees) · M.G.L. c.62 s.4 (income tax rate)
Who to call: a CPA or tax pro near you
Education, not legal or tax advice. Rules change. Confirm anything here with a licensed pro in Massachusetts before you rely on it. Last updated November 2026.