, Gloucester, MA

September 9, 2013

Lawmakers eye next move on tech tax

From Wire and Staff Reports
Gloucester Daily Times

---- — BOSTON — A push to repeal the new sales tax on computer and software design services through a ballot initiative cleared its first hurdle on Wednesday as a summit between Beacon Hill officials and tech industry leaders broke apart with no agreement from lawmakers to readdress the controversial tax.

The much-anticipated meeting between Gov. Deval Patrick, legislative leaders and technology sector executives ended last week after about 90 minutes, and attendees scattered from the governor’s office as an expected press conference with participants was waived off by the governor’s staff.

Opponents of the tax received welcome news from Attorney General Martha Coakley who announced she had certified a proposed ballot question to repeal the tax in 2014, allowing proponents to proceed with the signature-gathering phase of the petition process. House Minority Leader Brad Jones reiterated that Republican lawmakers would also continue their “quest” to repeal the tax in the legislative arena.

Among those pushing for a legislative repeal of the tax are Senate Minority Leader Bruce Tarr, who has called the tax a “job killer” and joined Jones earlier in a roundtable discussion to determine how best to target a measure that’s been met with confusion on the part of businesses and lawmakers alike.

Meanwhile, Patrick, House Speaker Robert DeLeo and Senate President Therese Murray met with seven tech leaders to discuss the news sales tax on computer and software design services, which was included in the Legislature’s $500 million revenue package to finance state budget and transportation investments.

“We engaged in a very thoughtful and informative discussion with a number of business leaders in today’s meeting with Gov. Patrick,” DeLeo and Murray said in a joint statement. “We look forward to continuing these conversations and talking with our members in the House and Senate,”

Andy Singleton, the CEO of the Needham-based software design firm Assembla, said that, “as a guy who works in the tech sector, we did want to figure out if the legislative leaders were hearing anything we’re saying about the difficulty complying with this tax and I’m satisfied they did listen to us and they did understand the difficulty.”

“The governor made clear that he wants to fund his transportation initiative, so that’s where we left it,” Singleton said.

Michael Widmer, president of the Massachusetts Taxpayer Foundation, told the State House News Service in a phone interview after the meeting that Patrick had opened the meeting by telling those in attendance he hoped to have experts describe the perceived problems, complexities and potential impact on the innovation economy that could stem from the new tax. Legislative leaders listened, but gave no signals about next steps, according to two attendees.

Widmer said the message conveyed by him and other tech leaders was that the tax needs to be repealed because “it’s just not fixable.”

Singleton said options of repealing or clarifying the language of the tax were all discussed, but legislative leaders made no commitment to revisit the issue, which would entail reopening partisan divides over taxation.

“There was only a sense that they’re willing to work on this issue within the parameters that the governor and the legislators previously set, which is that they would like to fund their transportation initiative,” Singleton said. “That’s the way I understood it.”

Singleton said he supports repealing the software sales tax.

“I personally believe the law should be repealed,” he said. “It’s going to very difficult to fix. It’s too vague. It says some bad things about the state of Massachusetts.”