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ARTICLE · 16 OCTOBER 2013

Lessons Learned From The Short-Lived Computer Services Tax

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As has been widely reported, the newly enacted statute expanding the Massachusetts sales tax to cover certain computer and software services (the "Computer Services Tax") has been repealed after a substantial outcry from businesses, the Massachusetts Taxpayers Foundation and others.

United StatesTax
Richard Giuliani
Richard Giuliani
Julie Hogan Rodgers
Julie Hogan Rodgers
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As has been widely reported, the newly enacted statute expanding the Massachusetts sales tax to cover certain computer and software services (the "Computer Services Tax") has been repealed after a substantial outcry from businesses, the Massachusetts Taxpayers Foundation and others. The appeal is retroactive.1 During the short-lived life of the Computer Services Tax, the Department of Revenue (DOR) issued several documents intended to provide guidance on the application of the tax, including a list of frequently asked questions.

What is notable about the questions is the apparent lack of knowledge among many existing businesses that their product may already be subject to the sales and use tax prior to the enactment of the Computer Services Tax. Based on the DOR's responses to a number of frequently asked questions, it appears that some businesses may not have been aware of the following:

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