The proposed tax on computer and data processing services, opposed by the Cape Cod Technology Council, is likely to take effect in the very near future. The tax is included in the transportation funding bill recently vetoed by the Governor. If, as expected, the House and Senate override the veto, the tax will take effect seven days later. The tax will impose a 6.25 percent sales tax on a wide variety of computer service. The definition of taxable services is very broad and the tax is expected to affect almost every industry in the Commonwealth. According to an analysis prepared by the Massachusetts Taxpayers Foundation, the proposed tax will cost employers an additional $500 million in annual sales tax. The Board of Directors of the Technology Council is reviewing legislative proposals to restrict the most damaging effects of the tax.
The CCTC has produced a video outlining the impact of the tax.
Related:
Working Draft TIR 13-XX: Further Guidance Regarding the Scope of Sales and Use Tax on Computer and Software Services (DOR)
Lawmaker moves to repeal software tax (Boston Globe)
Why We’re So Frustrated About The Massachusetts Software Tax (FastCompany)
Coalition Of Businesses Fights New Mass. Software Services Tax (WBUR)
Business leaders seek to repeal new computer tax (Boston.com)
Software service tax may be confusing … but it became law (CC Today)
Frequently Asked Questions: The New Computer and Software Services Tax Effective 7/31/13
MA Dept. of Revenue Technical Info Release on Sales and Use Tax on Computer Software Services
CCTC Infrastructure Committee discussion (May 2013)
CCTC Statement on Proposed Sales Tax on Computer and Data Processing Services (May 2013)
Transportation financing: Tech tax must go (Bos Globe)