The Bureau of Economic Analysis estimates that Massachusetts's gross state product in 2006 was US $338 billion. Per capita personal income in 2004 was US$42,102, making it the 2nd highest, just behind that of Connecticut. Gross state product increased 2.6% from 2004 to 2005, below the national average of 3.5%.

Sectors vital to the Massachusetts economy include higher education, biotechnology, finance, health care, financial services and tourism. Route 128 was a main center for the development of minicomputers. Massachusetts was the home of many of the largest computer companies such as Digital Equipment Corporation, Data General, and Wang Laboratories situated around Route 128 and Route 495 (another beltway approximately 25 miles (40 km) farther away from Boston). Most of the larger companies fell into decline after the rise of the personal computer, which was based in large part on software such as Visicalc and Lotus 1-2-3 and hardware technology such as memory and operating systems developed by many of these companies. High technology remains an important sector, though few of the largest technology companies are based there.

Its agricultural outputs are seafood, nursery stock, dairy products, cranberries, tobacco and vegetables. Its industrial outputs are machinery, electrical and electronic equipment, scientific instruments, printing, and publishing. Thanks largely to the Ocean Spray cooperative, Massachusetts is the second largest cranberry producing state in the union (after Wisconsin).

As of 2005, there were 6,100 farms in Massachusetts encompassing a total of 520,000 acres (2,100 km�), averaging 85 acres apiece. Almost 2,300 of Massachusetts' 6,100 farms grossed under $2,500 in 2007. This very low mode income shows that most farms in Massachusetts are not the primary sources of income for their owners. Particular agricultural products of note include tobacco; animals and animal products; and fruits, tree nuts, and berries, for which the state is nationally ranked 11th, 17th, and 16th, respectively.

Massachusetts has a flat-rate personal income tax of 5.3%, with an exemption for income below a threshold that varies from year to year. The state imposes a 5% sales tax on retail sales of tangible personal property�except for groceries, clothing, and periodicals�in Massachusetts by any vendor. The 5% sales tax is charged on clothing that costs more than $150.00. Only the amount over $150.00 is taxed. All real and tangible personal property located within the Commonwealth of Massachusetts is taxable unless specifically exempted by statute. The administration of the assessment and collection of all real and tangible personal property taxes in the Commonwealth of Massachusetts is handled by the city and town assessor and collected in the jurisdiction where the property is located. Massachusetts imposes a tax on any gains from the sale or exchange of capital assets held for more than one year. The state also collects a 12% tax on the sale or exchange of capital assets held for one year or less (short-term capital gains). Interest from non-Massachusetts banks is no longer taxed at 12%, but the first $100 of interest from Massachusetts banks is tax exempt from even the 5.3% tax. There is no inheritance tax and limited Massachusetts estate tax related to federal estate tax collection.

A recent review by the Center on Budget and Policy Priorities found 13 states, including several of the nation's largest, face budget shortfalls for FY2009. Massachusetts faces a deficit that could be as large as $1.2 billion.

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