Massachusetts Tax Proposal Could Affect Cloud Computing Services
March 26, 2013 7:16 AM
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State of Massachusetts may impose a tax on website design and other services
The governor of the state of Massachusetts has proposed a new tax within the state that could apply to cloud-based services. If the Massachusetts state legislature approved the governor's plan, the state tax on "canned software" would be expanded covering some elements of cloud computing.
The proposal is for a tax of 4.5%, which is lower than the state 6.25% sales tax. The tax plan does call for an exemption for people that store music or digital books on the cloud. According to members of Governor Deval Patrick's administration, the tax would bring in an estimated $265 million during 2014.
"We need our tax code to catch up with the way that technology is affecting everyone in their daily lives," said David Sullivan, legal counsel for the Executive Office for Administration and Finance in WBUR's story.
The tax expansion would cover custom-designed software and some services that run in the cloud. The custom software design services would include things such as website designs, Java software, PHP coding, and other custom software coding. The tax expansion would also apply the 4.5% tax to the cost of hosting a website and bandwidth needed to operate the website.
Some of the details on the service are still unknown. However, if the tax applies to hosting, bandwidth, storage, security, and other services it would potentially be applied to anything a company uses is not hosted on the premises.
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3/26/2013 11:09:41 AM
What State are you from?
Don't get me wrong I don't like to pay more taxes, and I am not sure about this proposal being put here in this article.
Also a lot services that are offered in States like NY and MA are not offered in a lot of places in the South particularly places with no state income taxes that's just a fact! you look at programs for disables individuals, to substance abuse etc There is no way around it, it's like night in day.
3/26/2013 12:05:34 PM
Have you seen the quality of public higher ed in states like MA or NY vs Virginia or Texas?
Let me know when UMass gets even a $1 bil endowment.
3/26/2013 12:13:15 PM
Well, when you pay people to be disabled or addicted to drugs, you will get more of them. I believe that the number of people getting disability from the feds is 16 million. States actually employ private firms to try to get their residents to move off of welfare (state funded) to disability (federally funded). The firms get a few grand per person they shift. The feds don't really complain, they want this situation since now these "disabled" people are dependent on the federal money and will keep those in power that promise to keep the gravy train rolling.
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