RE: Technical Information Release (TIR)13-10

On July 25^th 2013, Massachusetts legislature signed TIR 13-10 into law.  

We are writing to make you aware of a recent change in the Massachusetts tax code that will affect your information technology services unless your organization is exempt from sales tax.

To paraphrase TIR 13-10, effective July 31, 2013, will require IT Services and Software companies in Massachusetts “to apply the sales and use tax to certain technology services relating to computer system design and to modification, integration, enhancement, installation, or configuration of standardized or prewritten software.”

Basically, this means that any project work performed for Information Technology purposes will now be subject to a 6.25% tax, along with the following services:

• VDI Hosted Desktop
• Anti-Virus Protection
• Autotask Administrative Fee
• Desktop Monitoring Services
• Email Archiving
• Email Encryption
• Hosted Blackberry Service

• Hosted Desktop Services
• Hosted MS Exchange Services
• MDM (Mobile Device Management)
• SPAM Filtering
• VM Server Hosting
• Webhosting
• Workstation Monitoring Services

If you have locations in multiple states, your organization may also be exempt if you qualify for "Multiple Points of Use" status as outlined in Form ST-12.

This law is expected to be amended over the next few months and NSK Inc will keep you updated on any changes.  In the meantime, reach out to your congressman to voice your displeasure for being taxed on these services! 

If you wish to submit comments or suggestions regarding the application of sales and use taxes to these computer/software services, please send them to rulesandregs@dor.state.ma.us.

Please contact us with any questions or concerns you may have.

CLICK HERE for a link to the release associated with this new policy.

Other References:

http://www.thestateandlocaltaxbuzz.com/2013/08/sales-tax-on-computer-design-software.html

http://www.mass.gov/dor/businesses/help-and-resources/legal-library/tirs/tirs-by-years/2013-releases/tir-13-10.html

The Boston Chamber of Commerce supports this repeal also: