Aiming to make the newly enacted sales tax on computer system services narrowly tailored, House and Senate leaders wrote Thursday to Revenue Commissioner Amy Pitter, saying the legislation is a “more limited form of the software tax proposal made by Governor Patrick in his budget recommendations.”
Amid an outcry from some lawmakers and businesspeople who objected to the computer services tax in a $500 million tax bill, legislative leaders said they would clarify their intent to the Department of Revenue, and in the Thursday letter, House Chairman of Ways and Means Brian Dempsey and Senate Chairman of Ways and Means Stephen Brewer wrote in their letter to Pitter.
“Based on the analysis of the Department, our offices are expecting these sales tax changes to generate $161 million when fully implemented,” the lawmakers wrote. “Should the revenue or job impacts be greater than anticipated, or if the tax is imposed on vendors not intended, we will not hesitate to revisit these changes. We will remain vigilant as these changes to the sales tax are implemented to ensure that they have the impact we anticipate.”
A convoluted explanation
The taxes, which include higher rates for tobacco and gas, will go into effect Wednesday, July 31 and DOR has released guidance stating the new application of the sales tax to computer services will “not apply to personal or professional services that do not themselves constitute computer system design services or software modification services and that are not directly related to a particular systems integration project involving the sale of computer hardware or software.”
The $1.9 billion tax proposal Gov. Deval Patrick filed in January raised much of its revenue from the income tax, though it also included an expansion of the sales tax to cover computer services. Patrick’s budget would have applied the sales tax to “storage of data on the seller's or a third party's server including disaster recovery services.”
In late June, when lawmakers struck their tax bill deal, Massachusetts Taxpayers Foundation President estimated that one tax alone could generate $500 million. "State leaders could hardly have chosen a more perfect tax to undercut the future of the Massachusetts economy," Widmer said at the time. "This is the most sweeping computer and software services tax in the nation. It strikes at the heart of the state's innovation economy and will stifle job creation for years to come."
The closest thing the Legislature has to a battle of the bands has come one step closer to its epic conclusion, with official bill numbers having been issued for competing proposals seeking to enthrone an official rock song for the Bay State.
The push behind the Modern Lovers' 'Roadrunner' (H 3573), backed by Rep. Martin Walsh (D-Dorchester) and Sen. Robert Hedlund (R-Weymouth,) has enlisted the co-sponsorship of 20 additional lawmakers.
The South Shore's best hope at capturing the coveted prize, Aerosmith's 'Dream On," only managed to attract attention from two lawmakers: sponsor Rep. James Cantwell and fellow Plymouth County Rep. Josh Cutler. Both bills were recently moved to the Joint Committee on State Administration and Regulatory Oversight, 'Roadrunner' on July 11 and 'Dream On' July 18.
Like "Dream On," the song "Roadrunner" has local ties. Songwriter Jonathan Richman was born in Natick. But Cutler and Cantwell are vying to name the well-known Aerosmith song the Commonwealth's official rock anthem.
Both songs made Rolling Stone magazine's list of the 500 greatest songs of all time with Dream On at 173 and Roadrunner at 274. When the representatives first introduced the idea, it launched a public debate and lit up Twitter with banter over which song better represents Massachusetts. Richman wrote "Roadrunner" in 1970, when he began performing it in public at 19 years old.
Aerosmith's power ballad, written by Steven Tyler in his late teens, appeared on their debut album in 1973. The song became a top-10 single when re-released in 1976. The Boston-based band formed in the early 1970s and holds the record for the most gold and multi-platinum albums by an American group.
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