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Massachusetts Enacts 6.25% Sales Tax On "Prewritten" Software Consulting 364

Posted by samzenpus
from the pay-the-man dept.
First time accepted submitter marshallr writes "Technical Information Release TIR 13-10 becomes effective in Massachusetts on July 31st, 2013. It requires software consultants to collect a 6.25% sales tax from their clients if they perform 'computer system design services and the modification, integration, enhancement, installation or configuration of standardized software.' TIR 13-10 was published to mass.gov on July 25th, 2013 to provide the public a few working days to review the release and make comments."
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Massachusetts Enacts 6.25% Sales Tax On "Prewritten" Software Consulting

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  • by gr8_phk (621180) on Monday July 29, 2013 @09:57AM (#44411753)
    From what I can tell part of the problem in Detroit is that the pension funds invested in city bonds - a financially stupid move. So now if the city defaults on its bonds the pension funds are screwed. Had those funds invested in something sensible the problem would not be nearly as dire for the pensioners.
  • by Impy the Impiuos Imp (442658) on Monday July 29, 2013 @10:00AM (#44411781) Journal

    States are spending more than ever. Cut off taxes and choke them seems to be the only way. See also the federal government.

    As for Detroit, politicians past promised future generations' money to support retirees, a very easy thing to do.

    We were warned about this. It is a vector to failure. I've just popped some popcorn over the whole thing. The reason these things are having problems is the math is identical to why the Ponzi scheme was made illegal -- charging current investors little or nothing in exchange for giving them the investmemt of future investors.

    These schemes just have the perversity of being able to force you to be an investor.

  • by odigity (266563) on Monday July 29, 2013 @10:20AM (#44411967)

    We're just over the border, and we promise not to pull any shit like this on you.

    Why? It's simple: http://freestateproject.org/

  • by techsoldaten (309296) on Monday July 29, 2013 @10:21AM (#44411983) Journal

    I think I know the origin of this tax bill and what it is intended for.

    Acquia - http://www.acquia.com/ [acquia.com] - is a large firm that specializes in Drupal. A lot of the work they do is around setting up, configuring and maintaining Drupal websites.

    While they don't produce the majority of the code that is in Drupal, they do provide a lot of services around it to consumers and other businesses. This is really a tax on VARs and other people who implement Drupal using their services.

    I am sure there are a lot of other companies that operate in a similar space. While I don't like it, I can see the potential revenues to be drawn in through such a tax.

  • by Ksevio (865461) on Monday July 29, 2013 @11:11AM (#44412531) Homepage
    You're making the assumption that government spending is a bad thing. Massachusetts is doing much better economically than most other states while having top schools and infrastructure.
  • by KingMotley (944240) on Monday July 29, 2013 @12:24PM (#44413323) Journal

    Also, tax revenue is the lowest it's been since 1941, so complaints about taxes being unusually high are also wrong.

    Not at the federal level. Government spending rarely goes down. In the past 60 years it's gone now in the following years:
    1954, 1955, 1965, 2010 and 2012. Every other year it's gone up. http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=200 [taxpolicycenter.org]

    But perhaps, we should be talking about tax revenue, not spending since that is what was asked, and in the past 60 years, revenue has gone down in years: 1958,1959,1971,1983,2001,2002,2003,2008, and 2009.

    Better than gross revenue, it would be best to compare gross revenue adjusted for inflation per capita, but I don't have those numbers, but perhaps someone else does. Even better would be gross revenue adjusted for inflation paid per member of each income group, but again, I don't have those numbers.

  • by TaoPhoenix (980487) <TaoPhoenix@yahoo.com> on Monday July 29, 2013 @01:38PM (#44414357) Journal

    No, this is a NASTY new tax.

    The huge case is when the software is cheap and it's all in the support!

    Typical examples are OEM/self bought Windows and Quickbooks. The raw software is pretty cheap - but the consulting could be thousands. So suddenly they want a *sales* tax on it? I already bought my software a month ago (for example). Now I have to pay a *sales tax* on a *service*?!

    Plus there are really evil clauses in accounting theory that kick in here. If these are "sales" and not "services", that's gonna have a colossal impact on the IRS Schedule C as someone else hinted at elsewhere. I think it changes if you can use Cash Based Accounting vs Accrual, and if you have Sales, you have the Inventory clauses kicking in.

We don't know one millionth of one percent about anything.

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