Why computer services? Why not tax something no one likes - radio and TV ads
Massachusetts Introduces Software Service Tax
51–60 of 85 posts
Re: Massachusetts Introduces Software Service Tax
#52Earlier quoted context omitted.
There are as many tax systems as there are tax jurisdictions. And this is one of the main problems. Not only are governments (local, state, federal) trying to find creative ways to siphon money from the private sector, but the inherent nature of software services make this impossible to manage or track. What's wrong with allowing a company to charge $1 for their software, then $100k for customization? Yes, it's a sal…
@nknighthb, I can't seem to reply to your last comment, but I'm curious... why are sales taxes "regressive evils?" The more you consume, the more you pay (at least for physical products). This makes sure everyone has skin in the game. I would argue that an income tax is a moral "evil", but realize we're way past ever abolishing it. There's no inherent reason a governing power should ever know how much income you prod…
HN delays reply links based on how deeply nested replies are. Though you can find your way around that...
A regressive tax has a specific definition. It's a tax whose effect is to take a greater percentage of income the poorer you are. Sales taxes, like all flat taxes, are inherently regressive. If I make $10,000/year, all of it is getting spent, which means that less any exemptions (which vary by state, but may include things like staple foods), an 8% sales tax eats 8% of my income.
If I make $100,000 year, I may well only spend half of that, which means only 4% of my income is taken.
This is evil in general because I believe, as you clearly do not, that "governing bodies" are simply instruments of civilized society, and those making the most money are reaping the greatest rewards from that society, and should be required to contribute back a correspondingly greater amount.
But it is especially evil because if I'm making $10,000, I'm just trying to survive, and the sales tax makes that harder, while if I'm making $100,000, I'm way past survival, and well into luxury territory.
Re: Massachusetts Introduces Software Service Tax
#53Taxachusetts...
Re: Massachusetts Introduces Software Service Tax
#54Earlier quoted context omitted.
You guys pay 13% every time money exchanges hands? Does that include when you eat a restaurant, and if so, do you also tip the waiter?
You realize that in most of the U.S. you pay sales taxes on restaurant food and tip the waiter, right? In some states groceries are exempt from sales tax, but restaurant food is not exempted by any state (except in the trivial sense in states that don't have a sales tax at all).
New Hampshire even has a special sales tax just for restaurant food (despite not having a general sales tax).
Re: Massachusetts Introduces Software Service Tax
#55Earlier quoted context omitted.
The name of the country is United States of America. So it was formed that way - each of the original 13 states got together to form a more perfect union. But each of the 13 states retained some autonomy including ability to levy tax within the state for various means or purposes. Been that way ever since. Can't see a national tax - our culture would not allow it.
You mean like the national income tax?
That money funds the Federal government.
Completely different.
Re: Massachusetts Introduces Software Service Tax
#56Why do all the American states have different taxes? Here in Australia we have 10% GST (Goods and services tax). So wherever you're from in the country you can expect both goods and services to be priced the same. So much simpler for the average consumer!
The name of the country is United States of America. So it was formed that way - each of the original 13 states got together to form a more perfect union. But each of the 13 states retained some autonomy including ability to levy tax within the state for various means or purposes. Been that way ever since. Can't see a national tax - our culture would not allow it.
There is a national tax on gasoline.
Re: Massachusetts Introduces Software Service Tax
#57According to a friend of mine who is relatively knowledgeable about this law, it was originally intended to target enterprise companies that were essentially selling software for next to nothing and then charging like mad for the "installation and configuration" to avoid sales tax. The wisdom of even that approach is debatable, but the actual language of the law is far from conveying that intent and is a total, indec…
>intended to target enterprise companies that were essentially selling software for next to nothing and then charging like mad for the "installation and configuration" to avoid sales tax. Such is what happens you impose high tax rates: people relabel transactions so they fall outside the tax. The. You have to issue new rules that try to make the relabeling not work. Then, the regulation books start to explode in leng…
Or you could just implement sensible taxes in the first place, e.g. by not exempting ‘services’ from a (then-renamed) ‘sales tax’. It is rather easy to have a loophole-free tax on sales and services, unless you have specific requirements not to charge X, Y and Z because A, B and C – then it quickly can get complicated if people try to squeeze W and V into X and you have to build up regulation books :)
Re: Massachusetts Introduces Software Service Tax
#58This has disturbing implications for the rest of the country. What happens if the developers of Massachusetts just roll over and give the state hundreds of millions of dollars of extra revenue? What message does that send to other states?
Your profile indicates that you live in NY. That state already charges a sales tax on the pre-written portion of software-services sales. So I'm not sure on what basis you suggest people should move out of MA in protest at such a tax. Are you planning to move out of NY to protest it?
Re: Massachusetts Introduces Software Service Tax
#59Earlier quoted context omitted.
The name of the country is United States of America. So it was formed that way - each of the original 13 states got together to form a more perfect union. But each of the 13 states retained some autonomy including ability to levy tax within the state for various means or purposes. Been that way ever since. Can't see a national tax - our culture would not allow it.
There is a national tax on gasoline.
The gas tax is a use tax which has been federally acceptable (interstate highway). Income tax required a constitutional amendment.
Re: Massachusetts Introduces Software Service Tax
#60In the state of Vermont where I live our legislature introduced and passed a similar bill several years ago, under nearly identical circumstances. Nestled into another bill, the state house inserted and passed a sweeping tax on "Cloud Services" which affected all software delivered to the end user via the internet.
The real salt in the wound for businesses was that the tax was going to be retroactively applied to the previous four years of revenue. This would have driven a fair share of our fledgling technology sector out of business almost immediately.
Thankfully, our Governor did not agree with the way the tax was passed into law, nor how it was applied. He first delayed and eventually removed the tax all together.
When politicians sneak revenue draining taxes into the business market like this, without public comment or discussion, it makes me truly concerned that they are simply self interested.
Hopefully the Massachusetts state house will pull their heads out of the sand and clear up the confusion with their constituents. Maybe by next election cycle, those affected will let their feelings be known in the polls.