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Corridor 9 Chamber fighting software tax

Posted by John Swinconeck  September 5, 2013 09:55 AM

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The Corridor Nine Area Chamber of Commerce, headquartered in Westborough, is adding its voice to the chorus of Massachusetts business organizations opposing the state’s new software and IT tax.

“At this critical time when MA is trying to expand its technology industry and attract new IT business to the Commonwealth, this IT tax discourages new business development as well as existing IT business expansion,” the Chambers’ board of directors said in a written statement.

The Chamber consists of business leaders from communities along the Route 9/Interstate 495 area, notably Shrewsbury, Westborough, Northborough, and Southborough.

The 6.25% software and IT tax was included in a state transportation bill enacted in July. The Chamber has been advocating against the tax since April, according to the statement. It will suppress the development of new technology, increase the cost of doing business, “negotiate with each client on what services are actually taxable,” according to the Chamber.

Gov. Deval Patrick and the Senate President met Wednesday at the State House with representatives of the tech sector about the tax.

“Industry leaders shared their concerns, and we listened and learned,” said Patrick in a statement released by his office. “We also discussed our shared stake in how we will meet the Commonwealth’s transportation needs. While we did not arrive at a solution, we all committed to seeking one together over the next few weeks.”

Patrick had previously stated he was concerned about the “reputational impact” of the outcry against the tax, which is used to pay for transportation infrastructure improvements.

However, the tax will have a trickle-down effect on businesses that extend beyond the tech sector as those directly affected pass the costs on to clients and customers, rather than absorb the tax, according to State Rep. Matthew Beaton (R-Shrewsbury).

However, there is a three-pronged movement to eliminate the tax, said Beaton in an interview.

Injunctions and various lawsuits may try to overturn the tax, but Beaton said this was the most “far-fetched” approach.

There was also the potential for a citizens ballot initiative to repeal the tax. However, any initiative would likely die when it came before the legislature, Beaton said.

Finally, the legislature might decide to repeal the tax on their own initiative, as some supporters of the transportation bill are realizing the effects of “a terrible, stupid tax” said Beaton.

“I think there is a strong likelihood this will be repealed one way or the other,” Beaton said.

Contact John Swinconeck at johnswinc@gmail.com. Follow @johnswinc on Twitter.

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