[Hidden-tech] Fwd: KL: MassTLC: Action on Computer Software Sales Tax

[Rich@tnr]

Begin forwarded message:

> From: "Tom Hopcroft, President & CEO" <info at masstlc.org>
> Date: August 8, 2013, 2:01:24 PM PDT
> To: info at tnrglobal.com
> Subject: KL: MassTLC: Action on Computer Software Sales Tax
> Reply-To: info at masstlc.org
> 
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> Dear MassTLC Members,
> 
> Below is an important overview of the New Sales and Use Tax on Computer and Software Services, guidance on how it could potentially impact your company, and opportunities to learn more and share your views with policy leaders in the state.
> 
> I look forward to your input and participation.
> 
> Tom Hopcroft 
> CEO & President
> 
> What Is It?
> The Massachusetts legislature recently enacted changes to the tax law which are expected to affect many MassTLC members in relation to sales and use tax on computer and software services. The tax, passed as part of the Commonwealth's Transportation Finance Bill ("H.B. 3535"), went into effect July 31, 2013. It compels businesses around the state to collect 6.25 percent sales tax on software design services, which is defined by the Department of Revenue as the "modification, integration, enhancement, installation, or configuration of standardized or prewritten software."
> 
> Given the broad definition, it remains unclear exactly how this tax will be applied. The Department of Revenue (DOR) Technical Information Release 13-10 ("TIR - 13-10") provides some guidance for the application of sales and use tax to these newly taxed computer services. This guidance includes transition rules for existing computer services contracts, sales and use tax filing requirements, and information on sourcing rules, including Multiple Points of Use. The DOR FAQs seek to answer the myriad of questions that are being raised throughout the industry.  
> 
> As noted in an August 4th article in the Boston Globe, this law - which went into effect "with exactly seven days' notice" and "no public hearing" - requires "anyone in the business of providing computer system design services in Massachusetts to collect the 6.25 percent sales tax from their in-state customers." 
> 
> What's Next?
> According to a Foley Hoag Taxation Alert, "Computer/Software Services that are provided pursuant to contracts entered into before July 31, 2013 are not subject to this tax, except to the extent that payment under such a contract is invoiced or billed on or after July 31, 2013 and only to the extent that the payment relates to services performed on or after July 31, 2013."
> 
> Pending further guidance, MassTLC members should carefully evaluate their computer/software services contracts and transactions to determine their obligations to collect and remit this tax. There are several resources which provide a good overview and will help you determine your company's obligation to collect and remit the sales tax. They include:
> 
> Foley Hoag- Computer System Design and Software Modification Services Now Subject to the Massachusetts 6.25% Sales and Use Tax    
> Katz Nannis + Solomon, PC - ALERT - Massachusetts Sales and use tax on Computer and Software Services takes effect July 31, 2013!   
> PwC - Massachusetts provides guidance on the new computer services sales tax 
> 
> What Do You Need To Do?
> MassTLC is weighing in on the tax issue and needs your help. 
> 
> 1. Participate in a DOR Focus Group - We are participating in afocus group with the DOR to discuss the impact to our members and Massachusetts economy.  We are also working with TechNet and others to arrange a focus group specifically for tech companies. Please let us know if you are interested in getting involved in a focus group or other opportunity. 
> 
> 2.	Share Your Feedback with the DOR - The DOR is soliciting input from affected taxpayers regarding the application of the tax to particular transactions or business practices. We encourage members to submit comments or suggestions directly to the DOR at rulesandregs at dor.state.ma.us.
> 
> 3. Help Repeal the Tax - MassTLC President and CEO Tom Hopcroft is also part of a coalition of business leaders fighting the new tech tax which includes Staples, BJ's Wholesale, Boston Scientific, the Massachusetts Taxpayers Foundation, the Massachusetts High Technology Council, and others. The group is looking at options and has already filed a petition to include repealing the tax on the 2014 ballot.  
> 
> 4. Learn More About How It Affects You - Additionally, we will work to provide members with the most up to date information on how this tax will affect them. MassTLC will conduct a members' only webinar the week of August 26. The goal of the webinar will be to provide insight around the interpretation and implementation of the new law. A detailed announcement will be sent out next week.
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> 5. If you have any comments or questions, please contact Clare Madden at clare at masstlc.org. 
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> THANKS TO OUR GLOBAL SPONSORS
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