Massachusetts Republican lawmakers introduced a bill Monday to repeal the software services tax that the Legislature just adopted in order to fund improvements to the state’s roads and transportation systems.
The bill is the second legislative attempt to abolish the tax, which extends the state’s 6.25 percent sales tax to many computing services. In August, Democratic state lawmaker and congressional candidate Karen Spilka filed a bill to repeal the tax.
“There remains absolutely no appetite for this tax, and it continues to hurt the economic prospects for one of our state’s most vibrant and prosperous trades,” said House minority leader Brad Jones of North Reading.
Passed in July as part of a finance package that also includes higher cigarette and gas taxes, the software tax has sparked continued protests from the state’s technology community. A coalition of business leaders has formed to put a ballot initiative to repeal the tax before voters in the 2014 statewide elections.
The backlash has prompted Governor Deval Patrick to meet with technology executives over the new tax. So far though, the governor has said little publicly about keeping the tax, and his administration declined to comment specifically Monday on the Republicans’ repeal effort.
“The Patrick administration is continuing to engage with business and tech industry leaders about the software tax and our shared stake in how we will meet the Commonwealth’s transportation needs and the fairest, smartest ways to pay for it,” said Alex Zaroulis, a Patrick administration spokeswoman, in a statement. “While we have not arrived at a solution yet, we are all committed to seeking one together.”
Greg Raiz, chief executive officer of Raizlabs, a Boston software firm, is among a group of tech executives who will meet with Patrick officials this week.
“The only current way to fix [the tax] is to repeal it,” he said. “I’m not against exploring how the state can generate revenue. But it’s a huge problem and a mistake to single out the tech industry.”
Also Monday, the Massachusetts Taxpayers Foundation, a business group, released a study showing that the software tax is the “most burdensome tax on computer and software services in the nation.”