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Government Software The Almighty Buck IT

Massachusetts Set To Repeal Controversial IT Services Tax 122

Posted by Soulskill from the their-websites-just-mysteriously-started-working-again dept.
Nerval's Lobster writes "Massachusetts lawmakers have agreed to repeal a six-week-old tax on computer services that generated such outrage that even the governor who proposed the tax in January now opposes it. The 6.25 percent sales tax on 'computer system design services' was proposed by Gov. Deval Patrick in January, but got little notice before it was slipped in mid-July into a $500 million supplementary funding bill meant to pay for improvements in the state's public transportation system. It was passed by the legislature with almost no debate, was signed into law by the governor with little public outrage, and went into effect – theoretically – July 31. IT businesses in the state used social media, business associations and angry letters to both lawmakers and local media to describe problems with the tax and show their opposition. Confusion over what qualifies as a 'computer system design service' and how to actually implement the tax – which was supposed to generate $161 million in revenue for the state – has been such a challenge to implement that the state has yet to collect a dime. The main logistical problem is figuring out what is covered and what isn't: data access, data processing and 'information services,' for example, are not taxed, which exempts most hosting, cloud, outsourcing and remote-access monitoring or security services. Democratic leaders announced Sept. 12 they would support repeal of the tax, which could be completed within weeks. 'It is now evident that the impact of the tax is broader than any of us ever anticipated or intended,' according to Mass. Senate President Therese Murray at a press conference Sept. 12."
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Massachusetts Set To Repeal Controversial IT Services Tax More

Massachusetts Set To Repeal Controversial IT Services Tax

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  • Idiots (Score:3)

    by XanC ( 644172 ) on Friday September 13, 2013 @02:51PM (#44842929)

    (see subject)

    • Re:Idiots (Score:5, Insightful)

      by GoodNewsJimDotCom ( 2244874 ) on Friday September 13, 2013 @02:57PM (#44842981)
      Well at least they're smart enough to try and repeal it. It takes one kind of fool to get involved with a stupid thing. It takes another kind of fool to not change course when it is evident they made a horrible mistake.
      • The latter kind of fool being commonly known as a 'politician.'

        • Yes, but I have to say after reading the summary, I'm actually quite impressed that the Massachusetts politicians have reversed course on this idiotic tax so quickly. Usually, politicians do exactly like you say: refuse to change course after it's obvious they made a horrible mistake. Maybe I should look into moving to MA....

          • I'm actually quite impressed that the Massachusetts politicians have reversed course on this idiotic tax so quickly.

            I'm surprised they hadn't moved faster - tech consultants aren't just small companies after all, and some of the big boys likely started making noises about "funding opponents" and suchlike.

          • One swallow does not a summer make. It's still Taxachusetts.

          • Re: (Score:2)

            by pla ( 258480 )

            I'm actually quite impressed that the Massachusetts politicians have reversed course on this idiotic tax so quickly

            ...In other news, MA politicians haven't had access to their email in over a week, and mysteriously can't seem to find anyone willing to help them. In a completely unrelated turn of events, they started talking about H1Bs as a possible solution immediately before they lost all access to the internet. And now, merely half an hour later, they've come to their senses.

            Will wonders never cease.

          • Re: (Score:2)

            by sycodon ( 149926 )

            Their reversal had less to do with some kind of intellectual epiphany than it did angry letters from people that contribute to their campaigns.

            Even dogs learn not to bite the hand that feeds them.

        • Thus it is newsworthy when politicians stray into the former group.

          They saw a stupid thing, and got involved to fix the stupid thing. Including the guy who created the stupid thing.

          We could use more of that in politics. A new policy/tax is created, implemented, and then looked at objectively. "Is this working as intended? Are the people loving it?"

    • Re: (Score:2, Insightful)

      by account_deleted ( 4530225 )
      Comment removed based on user account deletion

  • Sounds about right... (Score:5, Funny)

    by FSWKU ( 551325 ) on Friday September 13, 2013 @02:56PM (#44842975)
    "Idiots make laws they know nothing about, without doing any research into the possible consequences. Film at 11."

    • Re: (Score:2)

      by asylumx ( 881307 )
      Why all the name calling? If they are such idiots, then why is it that when they see reason, they react to correct the problem? You should be commending these people for realizing their mistake and working to fix it. Otherwise, you will end up with more "stay the course" politicians who are unapologetic when they make a mistake.

      • Re: (Score:2, Interesting)

        by Anonymous Coward

        I am sorry, but you seem to be confusing "People who recognize their mistakes when said mistakes are pointed out to them" with "People who do research and learn about a subject before doing something." The later group learns to swim. The former figure out that swimming is not a natural skill after having been rescued by a life guard.

        • Re: (Score:2)

          by Imrik ( 148191 )

          Better ones that let the life guard rescue them than ones that grab the life guard and start swimming for the bottom.

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      But without even knowing what it was taxing, they determined it would add $161 million in revenue!

  • It would be nice if lawmakers put any effort at all into evaluating the effects that their laws will have...
    • They did -- they predicted it would generate $161 million in revenue. The problem is, they studiously overlooked any *other* effects, like driving all technology companies out of Massachusetts and into neighboring states that don't have such a tax. This is typical. The applicable phrase is "lies of omission."

      • Re: (Score:3)

        by celle ( 906675 )

        "The applicable phrase is "lies of omission."

              The real phrase is "tunnel vision". All they saw was the imaginary $161 million collection which I'm sure they've already spent.

        cap -- anaconda

      • Re: (Score:2)

        by PPH ( 736903 )

        like driving all technology companies out of Massachusetts and into neighboring states that don't have such a tax.

        Isn't this tax applied at the point of delivery? That is: Upon the buyer of the IT services, based upon their location within the state?

      • Re: (Score:2)

        by pla ( 258480 )
        They did -- they predicted it would generate $161 million in revenue.

        On what basis? They can't even figure out who owes the tax after the fact, how did they come up with that magic number before passing it?

        If you ask me my opinion about something, I'll give it. Time may prove me wrong or right, but if wrong, you can bet the farm that I can at least explain my reasoning to you in a rational, even compelling manner.

    • I hear that things have gotten so bad in the wake of this law that young hotheads are wandering around stealing, fighting, and drinking in some of the tougher Boston neighborhoods.

  • Death and Taxes (Score:2, Insightful)

    by Anonymous Coward

    Death and Taxes. Two things you can always rely on.

    Oh, and more NSA spying.

    Death, Taxes and NSA spying. Three things you can always rely on.

    • Re: (Score:2)

      by Megane ( 129182 )
      Death, Taxes, NSA Spying, and a fanatical devotion to the pope! Oh, now that's four things. Among the things you can always relay on are...

    • Re: (Score:2)

      by celle ( 906675 )

      "Death and Taxes."

              Not if the tax collectors/instigators are killed before they can implement/collect the taxes then it's just death. Down to one to rely on.

  • Stop passing the law to find out what's in it (Score:5, Insightful)

    by BitwizeGHC ( 145393 ) on Friday September 13, 2013 @03:00PM (#44843013) Homepage

    I swear, the way laws get passed in this country is like pushing any commit from a developer straight into production based on its commit message, without even a code review process.

  • So the legislature admits they passed a law with no idea what its impact would be. As a voter and taxpayer in the commonwealth of Massachusetts, I say with all due respect: WTF?!

    I mean, they get points for admitting a blunder and backpedaling furiously, but the hubris of passing laws nobody in the legislature understands is mind-boggling. Just, wow.

    If the incumbent in my district has an opponent on the ballot for a change, I sure will consider voting for him/her. (Most state and local offices around here ha

    • I mean, they get points for admitting a blunder and backpedaling furiously, but the hubris of passing laws nobody in the legislature understands is mind-boggling. Just, wow.

      To be fair, this seems to be the norm for almost all legislatures, at least here in America. Look at Congress and ObamaCare; no one even read the thing before passing it. Most laws are written by lobbyists these days, and given a rubber-stamp by legislators who are in the pay of those lobbyists.

    • I have read before that legislators often don't even write the laws; they are written by lobbyists who persuade legislators to sign off on it. I don't know the veracity of that claim, but more often than not, it seems feasible.
      • I can believe that, but if the legislators don't even provide an effective filter on the draft laws the lobbyists write, then the legislators' only possible functions are to conceal the source (read, deceive the public) and to assume blame. So, they asked for it!

    • "No taxation, without representation!", was the cry, way back in the American Revolution times.

      It seems taxation with representation isn't much better either.

      Quite ironic that this is happening in the state where the Boston Tea Party was brewed . . . over taxes.

    • So the legislature admits they passed a law with no idea what its impact would be.

      That is only because they didn't listen to their constituents. Everyone ELSE knew what the impact would be, except for the people passing the law.

      • Re: (Score:2)

        by Imrik ( 148191 )

        That's not true, their constituents had no idea they were putting it into the budget until after it was passed.

  • deja vous all over again... (Score:1)

    by Anonymous Coward

    we have to PASS the bill to find out what's in it!

  • Exact same thing happened in Maryland (Score:5, Informative)

    by langelgjm ( 860756 ) on Friday September 13, 2013 @03:03PM (#44843059) Journal
    They imposed a sales tax on "computer services" [washingtonpost.com] that created such outrage, it was repealed before it even went into effect. [salestaxinstitute.com]

  • incorrect summary (Score:4, Funny)

    by sootman ( 158191 ) on Friday September 13, 2013 @03:14PM (#44843135) Homepage Journal

    It says Massachusetts is going to repeal a tax but we all know that can't possibly be right. ;-)

  • There might be hope for Taxachusettes, yet.

    Nah, just kidding! "They just want your money to turn around and buy votes with programs" continues as a successfully descriptive theory, unchallenged, like relativity and quantum mechanics.

    • >"They just want your money to turn around and buy votes with programs"

      The fact that Republicans keep making this claim due to their anti-social perspective doesn't make it true, even if they actually believe it due to living in a far-right-wing echo-chamber, and only serves to alienate anyone who believes in western civilization.

      • Re: (Score:2)

        by fnj ( 64210 )

        The other respondents were anonymous assholes, so I thought I ought to make some effort to engage on this.

        At this time, considering parties with any following at all, there is effectively only one party in the US, and even more so only one in Massachusetts. The Republican Front of the Oligarchy Party is no more and no less in an echo chamber than the Democrat Front of the Oligarchy Party. They both live not just in an ivory tower, but the same ivory tower, and they both want broadly the same things while de

        • Re: (Score:2)

          by Imrik ( 148191 )

          This is an inevitable result of a two party system. The simplified version is that each party is more or less guaranteed to get the votes that are more extreme than their position so they only compete on the votes that fall between the two parties. This leads to a natural tendency towards each other.

  • So some "well-intended" politicians decide to legislate on the basis of "it sounds like a good idea and it's going to save us" and it turns out it was ill-informed, ill-conceived and the full ramifications were not considered.

    We just nationalized our health-care industry (and a significant portion of our national economy by extension) on this same basis and we cheered it as a moral duty and an advancement of our society.

    http://www.youtube.com/watch?v=lAt54NKsRRk

    Think of all the children you will feed with t

  • How did they come up with estimate? (Score:4, Interesting)

    by firex726 ( 1188453 ) on Friday September 13, 2013 @03:41PM (#44843329)

    I am curious how they can come up with estimate of how much the tax would generate, while also not having a clearly defined scope of what the tax would cover.

    It'd be like someone saying they want to buy a car, and me saying it'll cost $20k. The term "car" covers a wide, wide range of possible options, and to give an ballpark figure would be nigh impossible with any accuracy unless I knew the specifics.

  • ...it was slipped in mid-July into a $500 million supplementary funding bill meant to pay for improvements in the state's public transportation system.

    Instead of saving money by making existing infrastructure more efficient, such as by changing their tolls to variable congestion tolls as a means of permanently eliminating traffic congestion... they raise taxes.

  • This would all be much easier if the NSA would simply set up automatic transfers from our bank accounts to the Treasury so the feds can just take what they need.

    It's called customer service.

  • In Massachusetts, one party is completely dominant, to the point that 81% of the House, 90% of the Senate, and the Governor are all from the same party. It doesn't matter which party, this kind of stupidity is rampant in one party states because there is little criticism in most areas of law until after the fact. Utah has similar numbers for the other party, so I imagine the same stupidity happens there.

    Software is big business in MA, and one of the few growth areas outside of biotech. Did we want to kil

    • You should see all the blatant racist policies that have gone into effect. We are ranked #49 on economic growth, yet the supporters are running that in the past 45 days we are ranked 3rd in economic growth in the midwest THANKS GOVERNOR WALKER!!! It's so so bad.

    • So it seems Madison was right: The larger the republic, the less influence a single faction can have.

    • In Massachusetts, one party is completely dominant, to the point that 81% of the House, 90% of the Senate, and the Governor are all from the same party.

      Romney, Swift, Celluci, and Weld were all republicans. Before Dukakis during the mid 1900's, there was a fairly even trade back and forth between republican and democratic governors. Go back even further, and it biases towards republicans. But please, don't let actual facts get in the way of your rant about MA being a "one party" state.

      The supposed "lib

  • As someone from Massachusetts (Score:4, Insightful)

    by Lucas123 ( 935744 ) on Friday September 13, 2013 @03:51PM (#44843397) Homepage
    Believe me, we were all in shock over this. You cannot create something in this state without the government hanging a tax on it. And, once that tax is in place and the bureaucracy suckling on the tax teat it is established, it's a permanent fixture. You'll never see a bureaucracy go away. Years ago, after returning home from a five-year stint in California, to my surprise, the Commonwealth of Massachusetts sent me an "excise tax" bill on my beat up car; the tax is, in fact, an ad valorem tax (based on the value of the car). I called my mom to ask what the heck it was and she simply stated: "Yeah, they tax driving in Massachusetts. Is it any wonder the Bay State got the moniker: Taxachusetts?

    • Re: (Score:2, Funny)

      by Anonymous Coward

      Your comment has been down modded as you failed to pay the Massachusetts State Online Message board Tax

    • I live here and cringe when I pay the excise too, but I really think ranting against it is generally bogus.

      A few years back I bought a house across the border in NH. You know, the place with all the libertarians and no taxes and Live Free Or Die, Motherfucker! I was shocked when it $500 or so to register my car there - the fee (not "tax") is calculated based on the MSRP and age of your car, just like down here. Nice going, guys.

      Come to think of it, they did the same thing in Arizona when I lived ther

      • You know, the place with all the libertarians and no taxes and Live Free Or Die, Motherfucker! I was shocked when it $500 or so to register my car there - the fee (not "tax") is calculated based on the MSRP and age of your car, just like down here. Nice going, guys.

        Ever consider that it might be stuff like that that tends to push people into the libertarian party?

        But yeah, different states are different. To look at how much tax a state differs by you have to look at a lot of taxes - and quite a few states seem to have a tax on just about everything. Sales tax or no sales tax? Are counties/cities allowed to assess their own tax? Is it all through property taxes? Do you only tax 'land' property, or do you also tax vehicles, and what about other assets? There is at

        • Sure. I don't generally agree with libertarian principles, but I don't think the people who do are nuts/wrong/etc. What really got to me in that case, at the RMV in Epping that day, was that NH's method of collecting my money was totally disingenuous. Taxing me is one thing; calling it something else and pretending not to collect taxes is another.
          • *I do realize that NH isn't actually tax-free, and never had that expectation. I did expect not to pay a vehicle excise tax, though, and my experience when I lived there was that my neighbors though of it as the anti-Massachusetts - no sales, income taxes, etc.

          • Taxing me is one thing; calling it something else and pretending not to collect taxes is another.

            No real argument there. There's a difference between charging $25 for a pair of license plates because that's what they cost, having a static fee for type/weight of vehicle for the road funds, and charging on the basis of the blue book value of the vehicle - so a sucky 10 year old F-350 is cheaper than a new Prius.

            Honesty is good if you're going to do it.

            That being said, as a moderate libertarian I don't consider 'tax' a bad word, since I believe that we should have a budget that's balanced on average. Yo

    • Re: (Score:1)

      by Anonymous Coward

      Years ago, after returning home from a five-year stint in California, to my surprise, the Commonwealth of Massachusetts sent me an "excise tax" bill on my beat up car;

      Correct me if I'm wrong, but doesn't that tax go to the cities and towns? Not to the state?

      Mostly to pay for roads and public works at the city or town level?

      I know I make out my check to my local town, not to the Mass DoR.

      Personally I think that's a better deal than it going into the State's coffers. At least I can see where my tax dollars g

    • That is a property tax, just like homeowners tax. It isn't taxing driving. THAT tax is on the gas.

    • "Yeah, they tax driving in Massachusetts. Is it any wonder the Bay State got the moniker: Taxachusetts?

      Except you moved from a state with a local/state tax income of 11.2% (California) to one of 10.4% (Massachusetts.) MA is ranked 8th; California 4th. So please do shut the fuck up about "taxachusetts" - your taxes are LOWER than they were when you were in Commiefornia.

      They "tax driving" everywhere. Roads are paid for from the primary source of taxes: state and federal income tax and local property taxe

  • what the f* (Score:1)

    by Anonymous Coward

    >'It is now evident that the impact of the tax is broader than any of us ever anticipated or intended,'

    'It is now evident that there was no impact analysis done as the impact of the tax is broader than any of us ever anticipated or intended,'

    There fixed that for you...

  • If lawmakers can't be trusted to competently create the laws, why do we bother to elect representatives and give them a salary? More and more I think that we should just fire the lawmakers and all their legislative assistants, and instead spend the money on a secure discussion and voting platform.

  • So... why was this tax a bad idea? (Score:1)

    by Anonymous Coward

    Am I correct in understanding that 'computer services' are exempt from sales taxe? If so, why? And why is it wrong to correct that?

  • their hands in the cookie jar.
  • why the heck can't we do the same to stem the tide of cheap foreign labor and plummeting wages?

    • Because it won't work.

      You can't wish a flood away, no more than you can wish the sky to be green.

      The world is a global marketplace and there is nothing you can do to stop someone in India offering their services at a lower price than you.

  • When will you learn? Discuss and debate bills first. And if you actually pass it make sure that everyone knows what the effects will be.

    Seems like the liberals can't quite get this straight. Stimulus, Obamacare, IT services tax, etc... I guess Pelosi *was* right after all - we have to pass it so we can find out what is in it.

  • ...just about the time they hired an IT Services company to implement the new tax plan in the Mass. Dept. of Revenue computer systems.

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