New Massachusetts Tax On Computer Services Spawns Confusion

BOSTON (AP) — A new state tax on certain computer and software services appears to be causing confusion as businesses try to figure out just what exactly is supposed to be taxed.

The provision is one of several new taxes included in a transportation finance law approved by legislators last month.

According to the state revenue department, the state’s 6.25 percent sales tax now applies to “certain services relating to computer system design and to modification, integration, enhancement, installation, or configuration of standardized or prewritten software.”

The department says it is getting a lot of questions about what that all means and expects to provide “further guidance” in the future after taking public comment and meeting with affected industries.

Lawmakers have said they expect the tax to generate $161 million in new revenue.

Copyright 2013 The Associated Press.

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