Massachusetts to Collect Services Tax


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The message below was shared with the NAISG Security TechTips mailing list from Brad Dinerman. Massachusetts is about to start collecting taxes on services provided. They aren’t the first to do so and they won’t be the last. Our move from a manufacturing based economy to a services based economy has been swift and tax laws are a bit behind on their modernization to match. So even if you aren’t living in Massachusetts I suggest having a read of this post and referenced Information Week article. Better prepared than not.

***Message reposted from the NAISG Security TechTips discussion list server***

Sales and Use Tax on Computer and Software Services

Law Changes Effective July 31, 2013

I.  Introduction: 

Pursuant to newly-enacted legislation, An Act Relative to Transportation Finance, St. 2013, c. 46 (“the Act”), which became law on July 24, 2013, Chapters 64H and 64I of the General Laws have been amended to apply the sales and use tax to certain services relating to computer system design and to modification, integration, enhancement, installation, or configuration of standardized or prewritten software.  St. 2013, c. 46, §§ 48, 89.  The changes are effective 7 days after the Act became law, and therefore the effective date of these changes is July 31, 2013.  The purpose of this TIR is to provide initial guidance regarding these statutory changes, the applicable sourcing rules, transition rules for existing contracts, electronic filing requirements, calculation of use tax liability, and the effective date and its impact on filings and payments.

The Department of Revenue will issue such further guidance in the future as is determined to be necessary or appropriate, including an amendment to Regulation 830 CMR 64H.1.3.  For this purpose, the Department invites input from affected taxpayers regarding application of the sales/use tax on these services to particular transactions or business practices.  Comments or suggestions may be sent to rulesandregs@dor.state.ma.us . The Department also anticipates that there will be opportunity for public comment on a working draft of the regulation amendment before it is formally proposed.   

Also, here’s a brief article on it from Information Week Magazine:

http://www.informationweek.com/government/state-local/massachusetts-computer-services-tax-rile/240158584

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