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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. 

Source: Network Computing

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RE: Heh
By JediJeb on 3/26/2013 5:42:06 PM , Rating: 2
but the primary one is that incomes/cost of living are lower there and under our progressive tax brackets, that makes a significant difference.

But what makes the cost of living cheaper say where I am in Kentucky versus what it is on Connecticut? Why should a house I can buy here for $90,000 cost nearly $250,000 there? The lumber costs the same, the pipe and electrical wire costs the same, what runs the costs up so much? I bought an 800sqft log cabin on 3 acres of ground here for $42K, how much would that cost in New York or Mass?(oh and my property tax is about $800/year or 0.019%)

I know a lot of people here still believe in the philosophy of "if you don't work you don't eat". Not to say we push people out on the street who don't have a job, but many who do qualify for assistance refuse to take it because to them it is demeaning. These people would rather live within their means than to mooch off the government. Sadly though that standard is beginning to fall away and be replaced by the same "give me what I am owed" attitude in most other places.

Someone above listed funding public schools as the reason to keep their state income tax. Here we fund it mostly through property tax at the county level, with some coming from the state and federal levels, but most is local. I can say the quality of education here is still quite high, but back when I was in school and we had even less funding, my 8th grade class had 12 kids in it, we had no kindergarten or head start and yet out of those 12 kids, one is a chemist, one a chemical engineer, one a machinist, one a welder, one a nurse, one manages a large department store. We didn't have TVs or internet or even computers in our classrooms, but we did actually learn and most went on to achieve quite a bit in life. What percentage of students now will go on to be successful versus the percentage that will end up taking the handouts and sitting at home? Maybe the reason government budgets are to large is because of things like focusing on how much money we can spend on education instead of how good of an education can be given to the students. More expensive education does not always equal better education.

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