As many of you know by now, the Massachusetts Legislature recently passed the Commonwealth's Transportation Finance Bill ("H.B. 3535") including provisions requiring MA-based businesses to collect 6.25 percent sales tax on software design services.
There are several places where you can learn more about this law and get answers to the many questions you likely have:
The Department of Revenue (DOR) Technical Information Release 13-10 provides some guidance for the application of sales and use tax.
The DOR FAQs also provide detail on specific scenarios and definitions related to the implementation of the law.
MITX and many of our members are mobilizing in response to this law. There are a few things that you can do in order to have your voice heard and we highly encourage you to participate in the discussion.
There needs to be individual, company, and industry-level attempts to let the legislature know what the specific impact of the new law will have on your business, and the business community in Massachusetts as a whole. This means talking to state reps in your home and work districts and "telling our story" -- explaining explicitly how we as an industry and as job creators will be impacted. Interestingly, most reps get VERY little direct feedback on constituent's concerns on any given issue (10-15 complaints is considered significant!). Anything we can do to reach out to our elected officials to make them aware of the issues is likely to help efforts to reduce the impact of this law.
A few ways to do this:
Social media - Many legislators also have social media outlets, and CCing them on constructive comments on the tax can help. For example, there's a Twitter hashtag, #techtax, that some folks are using to organize feedback.
Call and email your home and work district MA legislators - You can find yours, along with their contact info at https://malegislature.gov/People/Search
It is also important to reach out to the Senate President, Therese Murray, and the Speaker of the House, Bob DeLeo. The folks in leadership within the MA Legislature, found here, https://malegislature.gov/People/Leadership/Senate, are vital to reach and educate.
Share your feedback directly with DOR - They are responsible for creating the guidelines around the implementation of the law, so their understanding of your business is crucial. You can submit comments and feedback directly to them at [email protected]
Participate in a DOR Focus Group - We are helping DOR organize participants for focus groups to discuss the law and help them learn more about the impact of the law on your business. Please let me know if there is a senior person on your team that would like to get involved with a focus group.
We will continue to be involved in the discussion with the government and work closely with other business and tech organizations to rally a response. As we do so, updates will be provided as they develop. It's important, however, that everyone jump in and have their individual voices heard. Together we can create a wave of impact that's very much needed now.
Please feel free to share this information throughout your company and our community as you see appropriate and do not hesitate to reach out with questions.