As I said before when this came up, the only thing that will cause politicians to change the rules is money. As in abandon the state entirely so they don't get anything. Move away, change your business, whatever it takes and then let the politicians (and the public) know why you are giving up on them. Sure it's painful but that's the only thing that gets the attention of the idiots in charge.
The Massachusetts Software Tax
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Re: The Massachusetts Software Tax
#42Earlier quoted context omitted.
Unfortunately Mass. has unfunded pension liabilities exceeding $20 billion (not including municipalities), and unfunded health care liabilities exceeding $45 billion (including municipalities. At the same time, states will have to deal with the new normal, which is lower economic growth indefinitely and lower returns on invested assets. Is there any place where one can read about this/ any place where one can see dat…
Chicago is also boned in the future: http://mobile.nytimes.com/2013/08/06/us/chicago-sees-pension... . EDIT: Alternatively http://www.suntimes.com/news/cityhall/21642911-418/city-defi... . Keep in mind that Detroit had loaned money from other states that aren't likely to get it back.
Do states and cities release data like this for the public to see (kind of like open gov api's in csv/json/xml)? I wonder how many more cities/states are taking loan money from other cities/states and are facing the gaping holes in their budgets? It would be pretty cool to throw something together and put it up on github.
Re: The Massachusetts Software Tax
#43This is going to increasingly become common esp as governments try to cover budget gaps. We just went through a sales tax audit for our SaaS company and so are expecting a good size bill for taxes not paid + penalties. Yes - fun stuff. Honestly, the gov't folks are playing whack-a-mole here trying to keep up with fast-growing areas that don't fit the old "you sell this widget for $X" model they're used to. And so the…
There are a ton of reasons the stay in or set up shop in California. Talent pool, established community, etc. I can't think of any for Mass. Massholes.
MIT? Harvard? Dozens of other schools? Huge medical research field? Come on.
Re: The Massachusetts Software Tax
#44> [Mass. DOR FAQ] It doesn’t matter where you host the information. If the business you’re working for has offices in Massachusetts, you have to collect tax.
Sounds like the solution is pretty obvious. And I doubt anyone will miss Boston winters.
Re: The Massachusetts Software Tax
#45Although it's certainly obnoxious and poorly thought out, in the long run we development shops will get all the edge cases figured out, though dealing with the legislature is going to be like pulling teeth. Although it would increase startup costs and decrease ROI for us, let's not forget who actually pays this tax: our clients, the buyers of these services. If you are a Massachusetts company and you buy technical services, you now have a really strong incentive to head north to New Hampshire or south to Rhode Island. Massachusetts is also small enough that you might be able to pull that off without losing too many employees.
Re: The Massachusetts Software Tax
#46This is insane . Either add a sales tax (fixed %) to all B2B transactions (like UK VAT, which you're exempt from if you're tiny) or just don't. This minefield of regulations about what's taxable and what isn't will just make it much more expensive to sell things, as people pay for lawyers/accountants to figure out what "tax" to add to every outgoing invoice. Since this will decrease consumption, it will reduce other…
Agree. I lived in Toronto when the Canadian Government introduced the Goods and Services Tax (GST) as a replacement for the old Manufacturer's Sales Tax (MST) of 13% on all products manufactured in the country, as this hurt the international competitiveness of manufacturers.
The proposal was to replace all provincial sales taxes with the GST, and to apply GST to everything, to keep it super-simple to implement. Well the provinces hated the idea, and the tinkerers just had to have exemptions added for various reasons. The result was that there were two sales taxes in Ontario, each with a complex set of exemptions. The popular example was that buying five donuts was taxable, because that was "dining", but buying six was exempt, because that was "groceries".
Re: The Massachusetts Software Tax
#47This is insane . Either add a sales tax (fixed %) to all B2B transactions (like UK VAT, which you're exempt from if you're tiny) or just don't. This minefield of regulations about what's taxable and what isn't will just make it much more expensive to sell things, as people pay for lawyers/accountants to figure out what "tax" to add to every outgoing invoice. Since this will decrease consumption, it will reduce other…
Agreed. I run a small business (thankfully not doing software) in Massachusetts. I don't mind collecting sales tax, but when they make it an overhead nightmare it's impossible to figure out. I'm just one person; when your revenues are in the $10k range, hiring someone to figure it out is impossible. If they just charged a fixed rate for everything it would at least not so heavily favor big business over small compani…
> software for cheap and then make the service contract expensive
If the software is cheap, it is expensive to service it.
Re: The Massachusetts Software Tax
#48Is there a reason this article doesn't mention what the actual tax rate is? According to other articles, it's 6.25%, but that omission from this article seems glaring.
Is it because that number is perceived as low, and mentioning it undermines the argument of how dire opponents think it is?
(Genuinely asking, not trolling; my employer is almost certainly going to be hit by this tax.)
Re: The Massachusetts Software Tax
#49Unfortunately Mass. has unfunded pension liabilities exceeding $20 billion (not including municipalities), and unfunded health care liabilities exceeding $45 billion (including municipalities. At the same time, states will have to deal with the new normal, which is lower economic growth indefinitely and lower returns on invested assets. As a result, states will ratchet up taxes to cover their increasingly untenable b…
It isn't a foregone conclusion that states and other governments must increase taxes. If there's less money to go around, they could always spend less money.
I'm not trying to make a political point, but there are certain states where the knee-jerk reaction is all too often to increase taxes - or to tax unpopular things like cigarettes - rather than take a look at the budget and see if there's a middle ground.
Re: The Massachusetts Software Tax
#50Earlier quoted context omitted.
> Anyone working in the IT industry who sells software or related services to any business that has any office in Massachusetts. So no, it applies if your client is located in the state.
It doesn't (and can't, unless Congress changes the law) override the basic requirement that Massachusetts can only require you to collect sales tax if you have a Massachusetts nexus establishing jurisdiction. However if you are 1099 consulting for an MA client, in many cases that will establish an MA nexus, so this will apply to many consultants who have MA clients. On the other hand if you purely operate a website w…
What if you are a SquareUp.com and you send hardware to your customers that enables the out-of-state hosted service? Even if the hardware was free to the customer, as I read the new law in the context of real property that establishes nexus, simply having hardware in the state establishes nexus.