Announced
during a press conference at Genuine Interactive, a leading interactive agency,
the proposed bill puts forth a targeted approach to repealing the largest and
broadest tax on computer and software services in the nation.
“We
can’t afford to penalize innovation and job creation in one of the state’s most
promising sectors if we hope to have the kind of robust economic recovery that
creates the jobs people need and the tax revenue state government depends on,”
said Senate Minority Leader Bruce Tarr (R-Gloucester). “The time is now
to change course from increasing taxes on productivity and focus on creating a
climate for job growth and reform and efficiency in our state’s operations.”
The
filing of legislation comes on the heels of the Massachusetts House and Senate
Republican Caucus’ statewide 2013 Technology Tax Business Roundtables. The
weeklong series of roundtable discussions conducted by Republican lawmakers
included conversations with technology industry professionals and
representatives from area chambers of commerce about the negative effects of
the technology tax. The roundtable discussions were initiated due to the fact
that Democratic leadership did not provide a public hearing to solicit public
testimony from those affected by the tax on software and computer services.
“Since
this reckless tax on the technology industry was approved, we have seen a
steady decline in business confidence within Massachusetts,” said House
Minority Leader Brad Jones (R-North Reading). “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, as well as other industries
who are suffering from the trickle-down effect of this careless revenue
mechanism. The way to encourage growth and development within the Commonwealth
is not through ill-conceived taxes, but through business-friendly directives and
initiatives.”
Republican
lawmakers highlighted the fact that the Commonwealth does not collect taxes on
any other service, and expressed fear that the computer services tax sets a
dangerous precedent for future efforts to tax other vital services. Furthermore,
House and Senate Republicans had each offered revenue-neutral proposals, which
if passed, would have avoided the implementation of the technology tax.
Industry leaders such as the Massachusetts Taxpayers Foundation and the
Massachusetts High Technology Council have repeatedly warned of the destructive
nature of the new tax which is slated to stifle the high-tech industry by close
to $500 million a year.
“Genuine
Interactive started off as a four person agency in 2005 and since then, it's
grown to a 100 person company,” said John Grayson, Chief Executive Officer
of Genuine. “This tax on technology services is negatively impacting the
business and is threatening the future of the entire technology and innovation
industry. Out-of-state vendors are seeing this as an opportunity to attract
businesses away from Massachusetts and that is going to affect the overall
economy of the Commonwealth. In a market where work is already being outsourced
to other countries, this puts yet another burden on the technology economy in
Massachusetts.”
Having been filed in both the House and Senate,
the joint legislation awaits assignment to a legislative committee.
