Parts of a large tax bill enacted to pay for transportation needs in Massachusetts are now the focus of separate repeal efforts. Petitions were filed with the Massachusetts attorney general today to begin a process that could put the repeal initiatives on the 2014 state election ballot.
A coalition of more than 20 business leaders from some of the state’s biggest companies, including Staples Inc. and Boston Scientific, signed the petition that seeks repeal of the recent expansion of the state’s sales tax to computer software services.
Jeff Cuiffreda, president of the Affiliated Chambers of Commerce of Greater Springfield, who is one of the signers on the petition, said the so-called “tech tax” is onerous.
State officials say expanding the 6.25 percent sales tax to computer services such as building websites and modifying software will bring in $162 million annually. But that estimate is in dispute, partly because regulations about collecting the tax won’t be issued by the Massachusetts Department of Revenue until October.
Michael Widmer, president of the Massachusetts Taxpayers Foundation claims the state will rake in $500 million a year from the new tax.
The computer software services sales tax was part of a nearly $2 billion tax bill filed last winter by Governor Deval Patrick. But it appears to have flown under the radar for months on Beacon Hill as the legislature rejected much of what the governor proposed and crafted a $500 million transportation finance package.
Democratic State Representative Stephen Kulik of Worthington, vice-chairman of the Ways and Means Committee, said there is a lot of misinformation being spread about the tax. He said it will bring in money to pay for road repairs and for regional public transit systems- investments that benefit the business community.
Another part of the $500 million transportation finance package is being targeted by activists. A petition was filed Wednesday to repeal automatic future increases in the state’s gasoline tax that are tied to the rate of inflation. Rep. Kulik points out there are a lot of things, such as Social Security benefits, that are indexed for inflation.
Barbara Anderson, executive director of Citizens for Limited Taxation said the gas tax could go up by double digits someday without anyone voting on it.
If the state attorney general’s office determines the tax repeal initiative petitions are permitted under the state constitution, the sponsors would then need to collect just under 69,000 certified signatures of registered voters to get on the 2014 ballot.