Here is what happens when we don't watch or have someone watching our business sector at a legislative level. The latest transportation bill that just became law over Gov Patrick's veto extends 6 1/2 % tax to all IT and related industry. This new tax applies to anyone who sells any IT/computer related services and that very likely includes web developers of all sorts. Here is the final law: https://malegislature.gov/Bills/188/House/H3535 The sections in question are 48+49 - they removed the prior exclusion on taxabiltiy of IT and software services. Here is the General Law as it currently exists: https://malegislature.gov/Laws/GeneralLaws/PartI/TitleIX/Chapter64H But since it is by section and not line # like the changes, will someone please figure out what the new law says ? The net-net is many of you will have to starting filing Mass sales tax papers, even if your business comes from out of state, which I expect will not be taxable. This is an analysis from Mass Taxpayers foundation: "The tax is so broad that it will affect virtually all industries" http://masstaxpayers.org/sites/masstaxpayers.org/files/MTF%20Statement%20on%20Computer%20and%20Software%20Services%20Tax_6-26-2013%20.pdf http://masstaxpayers.org/sites/masstaxpayers.org/files/MTF%20comment%20on%20computer%20sales%20tax%20March%202013%20(2).pdf <http://masstaxpayers.org/sites/masstaxpayers.org/files/MTF%20comment%20on%20computer%20sales%20tax%20March%202013%20%282%29.pdf> The worst part of the situation is that none of the groups who are charged with watching the legislative arena for tech related issues did their job to bring this to our attention soon enough to do anything about it. Below are some references that I found on the new situation and is the story that Richie Davis from the Greenfield Recorder about it (and yes, he got my company name wrong, it is TNR Global), -- all too late to change it. Thanks to Richie for giving me some heads up this was happening, at least before choking on my morning tea. References: http://jamaicaplain.patch.com/groups/politics-and-elections/p/legislators-override-gov-patricks-transportation-bill-veto http://www.informationweek.com/government/state-local/massachusetts-computer-services-tax-rile/240158584 http://www.latestcurrentnews.com/software-design-tax-plan-for-mass-draws-fire-boston-globe/ http://www.telegram.com/article/20130708/NEWS/107089987/1020 http://www.masslive.com/opinion/index.ssf/2013/07/editorial_tech_tax_proposal_wo.html http://www.bostonglobe.com/business/2013/07/05/taxpayer-group-moves-rein-software-tax/cqHzSqU0fpVWIAHimXtdJK/story.html http://www.bostonglobe.com/business/2013/07/17/tech-sector-powerless-stop-new-software-tax/eEJi5ankQ3zNz2AGr9qeTK/story.html -- Rich Roth Webmaster/Steering Committee Member Hidden-tech http://www.hidden-tech.net The Talent you need is right here, Join and share your skills ((Sponsored by Thrives Media)) http://www.thrivesmedia.com From Greenfield Recorder: July 25, 2013 * Local experts weigh in on computer tax* * By RICHIE DAVIS Recorder Staff* Overshadowed by a proposed hike in the gasoline tax and other elements in the transportation bill standoff between Gov. Deval Patrick and the Legislature is a new tax on computer and data processing services that business groups say could burden virtually every business in the state and make Massachusetts a much less attractive place to do business. Most businesses contacted in Franklin County Wednesday said they were not aware of the Legislature's proposal --- enacted as part of its veto override Wednesday --- to extend the 6.25 percent sales tax to the technological services, despite a memo forwarded to Franklin County Chamber of Commerce board members Tuesday by Chamber President Ann Hamilton. Hamilton herself said she hadn't been aware of the proposal, which according to the nonpartisan Massachusetts Taxpayers Foundation "will lay claim to the most onerous computer and software services tax in the nation." Richard Roth of TNT Global Solutions, a Greenfield custom software development firm, said, "I can't believe we all missed this. Obviously they stuck something in there that we all missed. It's definitely something that would shake us up a little bit." According to Hamilton's email call for political action, the tax "strikes at the heart of the Massachusetts economy, costing countless jobs for years to come. Virtually every industry in the state will be affected by this tax, ranging from retail to life sciences to health care to finance." The Taxpayers Foundation estimates the tax --- which only four other states levy --- will cost the state's employers an additional $500 million in annual sales taxes." Among other effects, according to the foundation, "The proposal would tax efforts to improve health care quality and reduce costs --- another major administration initiative. Developing electronic health and medical records that can be shared across platforms will transform health care delivery. Whether these applications are custom built and installed at institutions or shared via a software as a service model over the Internet, they would be subject to taxation." Timothy Farrell of Farrell Insurance in Greenfield said that even as a small business, his computer services budget is a significant part of his operating expenses. The new tax could cost the firm $2,200 in additional taxes, based on last year's expenses. "It's so hard to wrap your arms aroundthis because it will be passed around multiple times," Farrell said. "It's going to impact businesses, but it's also going to impact consumers. For us, it's a big impact, but that doesn't even include, if I'm paying the additional tax, the people that I'm using as my IT service, and buy my software from, they're going to be paying it on their end as well, and that will increase my costs, which will increase my tax." Sen. Stanley Rosenberg, D-Amherst, said the new tax has been discussed "for quite some time," and had received either the endorsement or statements of neutrality from a number of business organizations including by taxpayers foundation President Michael Widmer, who "offered no opposition when it was first laid out." "The bottom line is, there's been a leftturn here, and there has been some growing opposition," said Rosenberg, adding that estimates by House and Senate Ways and Means Committee say the tax is worth $160 million, and the business community says it will cost about three times as much. "We have to let it play out and see what kind of revenue it actually produces. "Other states have this tax," he added, "and the reality is it's built into the cost of the service, and most businesses don't do a major purchase of this kind of service frequently. It gets amortized over a long period of time." Sen. Stephen Brewer, D-Barre, who chairs the Senate's Ways and Means Committee told The Boston Globe last week, "We heard precious little from the industry. There are people who could have weighed in earlier that we didn't see." Mass Taxpayers issued a bulletin, dated March 19, which says, "Companies of all sizes rely on technology to improve and grow, and taxing it would add to their costs of doing business. Massachusetts already has the second highest business costs in the country, behind only Hawaii. The state's tax burden on businesses is the fifth highest in the country, according to the January 2013 report from the Greater Boston Chamber of Commerce. The state also ranks near the bottom for its difficult regulatory climate. Since so few other states have a similar tax, it would be one more factor that makes Massachusetts the most expensive place in the 48 contiguous states to run a business." On the Web:https://malegislature.gov/Bills/188/House/H3535http://bit.ly/19iEz3LYou can reach Richie Davis atrdavis at recorder.com <mailto:rdavis at recorder.com>or 413-772-0261, Ext. 269 / Copyright © 2013 Greenfield Recorder 07/25/2013 / -------------- next part -------------- An HTML attachment was scrubbed... URL: http://lists.hidden-tech.net/pipermail/hidden-discuss/attachments/20130725/7c777d4a/attachment.html -------------- next part -------------- A non-text attachment was scrubbed... Name: none.gif Type: image/gif Size: 49 bytes Desc: not available Url : http://lists.hidden-tech.net/pipermail/hidden-discuss/attachments/20130725/7c777d4a/attachment.gif