Last January, Massachusetts’s governor Deval Patrick was in favor of the ‘tech tax’ (sales tax on computer services) saying it would help fund improvements to the State’s transportation systems. Now, however, he has had a change of heart. Apparently, technology executives got through to him.
Implemented in July, Massachusetts joined a few other states that have such a tax. With the dubious distinction of the highest tax among this group, opponents argue that having to add 6.5% to cost of sales would impact the State’s economy. Massachusetts State Representative James Lyons (R-Andover) contends that this tax “. . . is going to hurt every single taxpayer in the Commonwealth. It’s going to lead to less jobs, less economic activity and less revenue.”
With the implementation of this tax, Florida’s governor, Rick Scott, saw it as an opportunity to entice companies to Florida. In an open letter to Massachusetts business owners, he wrote, “Summer is here and millions of people are booking their trips to Florida. This year, we are asking you to make that plane reservation a “one way”. [Read the complete letter.]
Lawmakers are now ramping up to introduce a bill that would repeal this tax.