Listen up tech industry people in Massachusetts! Your state government recently passed a new tax that directly affects your business. In order to fund statewide transportation upgrades, the standard 6.25% sales tax will now be required on most computer software services, including website development.
A cabal of tech industry and taxpayer associations has banded together to fight the tax, but lawmakers seem intent on sticking to their decision.
Why The New Massachusetts Technology Tax?
Why is Massachusetts adding a new tax? State representatives say it’s all about mending the ailing transportation system. And since transportation upgrades usually involve technological advancements, legislators buried the tax in a recent transportation bill – a statute most tech folks didn’t notice.
Lawmakers estimate the new tax will bring in $160 million in revenue for the state. Opponents to the tax think it will bring in $500 million – way more than the state needs for their stated goals.
Why Is The Massachusetts Technology Tax a Potential Nightmare For The Industry?
Opponents to the new levy have a simple yet powerful argument: a new tax threatens the state’s financial growth since technology is a booming sector of the economy. Moreover, anti-tax spokespeople point out that since the bill is so poorly written, more businesses will be subject to the tax than politicians think.
Is The New Technology Tax Effective Immediately?
The new tax is not en force yet, and a group of concerned and invested entities has joined forces to oppose the tax. The Massachusetts Taxpayers Foundation, Massachusetts High Technology Council and other groups are working to have the tax added as a referendum on the 2014 ballot. Serious about their efforts, the group has hired a high-end public relations team to further their cause.
For their part, politicians say they will consider narrowing the scope of the tax if revenues exceed their $160 million estimates.