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Massachusetts Tech Tax on Way Out


 Massachusetts representatives vote to repeal computer tech tax.

Update, 9.27.13: The Massachusetts Senate has voted 38-0 in favor of repealing the controversial tax on computer software and services. Now only the governor's signature is needed to turn the repeal into law.

It was unpopular from the outset, and now it looks like it's on the way out. Massachusetts lawmakers in the House voted yesterday to repeal the technology tax on computer and software services. It wasn't a close vote; only 1 representative out of 157 voted against the repeal.

House Bill 3662, An Act repealing the computer and software services tax, would repeal the tax retroactively. If it becomes law, the repeal would take effect on July 31, 2013.

House Republican leader Rep. Brad Jones noted that the repeal simply undoes "a stupid thing we did six weeks ago." Yet Democrats who previously supported the tax disagree, saying that "they were unaware of any strong opposition to the tax until after it was approved." They must not have been paying attention when the Massachusetts Taxpayers Foundation called the tax a Pandora's Box and said it would take "a $500 million bite out of business…." In any event, the tax was proposed to raise needed state revenue, and as Rep. Joseph Wagner (D) has said, "It wasn't a stupid thing we did trying to fix the transportation problems in Massachusetts." (WBUR).

The unpopular tax would raise an estimated $161 million in the first fiscal year. According to House Speaker Robert DeLeo (D), "no new taxes will be proposed to make up for the revenue." Governor Deval Patrick (D) has indicated his willingness to work with lawmakers to come up with a solution for the budget shortfall, even it takes some time.

The Senate is expected to vote on the tech tax repeal at some point today.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.