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Massachusetts DOR Refunds Computer and Software Services Tax

  • Nov 11, 2013 | Gail Cole

 Massachusetts DOR wants to give tax money back to taxpayers. Please.

You’ve heard of tax collectors chasing down taxpayers for owed money, but since when do tax collectors go out of their way to give money back to taxpayers? Since now, apparently, at least in Massachusetts.

Massachusetts lawmakers imposed a tax on computer software and services that took effect on July 31, 2013. On September 27, 2013, Governor Deval Patrick (D) the Massachusetts Department of Revenue is beseeching those taxpayers to claim their refunds.

According to the DOR, “more than 250 vendors filed returns submitting nearly $800,000 in sales and use tax on computer and software services.” These tax dollars “must be returned to the customer from whom the tax was collected.”

To date, only 30 vendors have submitted an application for abatement. That means 220 have not.

The deadline to file an abatement for the computer services tax is December 31, 2013. If that seems like a long time from now, consider the fact that Thanksgiving is just over two weeks away. The end of the year will quickly follow. Once that deadline has past, taxpayers will be unable to claim a refund.

Electronic filing required

Applications for the abatement must be filed electronically through http://mass.gov/webfile. Directions are available at DOR Expedites Abatements for Vendors Who Paid Sales Tax on Computer and Software Services. The department makes clear that no refund will be issued “until the vendor establishes that the tax has been repaid or credited to the retail customer.”

Any vendor who collected the tax from a retail customer but did not remit it to the department must refund the tax to the customer and “file an abatement application to amend the return and show no tax on computer and software services was owed.” Failure to do so may trigger collection activity.

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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.