BOSTON (WWLP) - Massachusetts Taxpayer Association President Michael Widmer is sounding the alarm on new business taxes set to go into effect Wednesday that tacks on the state's 6.25 percent sales tax on all computer software and system upgrades.
"All of those investments to improve productivity and generate growth are going to be taxable. Clearly that means every industry is going to face increased taxes," said Widmer.
Widmer says the new business tax penalizes all companies across all sectors, especially the state's software innovators. He warns that the tax makes Massachusetts a less competitive state to do business and will ultimately result in job losses. Governor Deval Patrick is surprised by Widmer's position as the MTA has been generally supportive of tax increases to provide funding for transportation overall.
"I don't think it's that and they didn't think it was that until the eleventh hour. I think like with every change in the tax laws, every change in regulation or law that effects businesses we want to watch it as we go along," said Patrick.
The Department of Revenue will release new regulations on the new business taxes in mid-October. In the meantime, businesses are confused as to whether they may be obligated to pay these new taxes.
"More and more companies are realizing they may owe this tax but there's no guidance at this point from the Department of Revenue …and so there is just massive confusion and concern," said Widmer.
Opponents of the new computer software service tax plan to rally support from the state Legislature to have the tax repeale