In a major reversal, Massachusetts legislative leaders are calling for the repeal of an unpopular 6.25 percent sales tax on business and software services.
It’s almost unheard of for the legislature to pass and then repeal a significant tax like this. The computer services tax was passed in July over the objections of some in the business community. The lobbying grew fiercer over the summer, convincing the governor and then the legislative leaders to reconsider the tax they initially supported.
House Speaker Robert DeLeo and Senate President Therese Murray made the announcement at a hastily called press conference:
“There were folks from the industry and many folks from the business community who are here today, who expressed a grave concern that we were sending a message to the innovators across this country and across the world for that matter that Massachusetts may not be the place to be.”
The tax was supposed to help pay for major transportation improvements. Speaker Deleo said he won’t propose any new taxes to replace the lost revenue – about $160 million a year… and would try to use a budget surplus to make up the difference.
The full legislature could vote to repeal the tax within weeks. This move comes just a couple of days after Governor Deval Patrick back-tracked on his support for the tax.
