Boston (WWLP) - The Massachusetts Senate voted unanimously to repeal a tech tax they approved over the summer.
The action follows public outcry from technology leaders who said the tax was too costly and confusing.
Senate President Therese Murray says members of the business community were for the tax before they were against it.
“We did everything we usually do. We contacted the experts in the field. They all agreed and we got letters of support and it wasn’t until DOR tried to collect it they realized that it was just too convoluted to try to do,” said Sen. Therese Murray (D-Plymouth).
The Department of Revenue has delayed collection of the tax that was to charge businesses a 6.25 percent sales tax on computer software services. It was expected to raise about $160 million in revenue for the state’s transportation needs.
Senate Budget Chief Stephen Brewer hopes to rely on state budget surpluses to make up for the lost revenue. He says, last year’s surplus exceeded $600 million.
“We are comfortable that we can address the needs of the programs that we have and if they are not tracking in that direction, we will take appropriate action to make sure that we have a balanced budget,” said Sen. Stephen Brewer (D-Barre).
Senate Republicans hope their Democratic colleagues take this experience as a lesson for the future.
“I am pleased that [Democrats] are choosing now to follow our lead and their eyes have been opened to the fact that we shouldn’t engage in taxing first and asking questions later,” said Sen. Bruce Tarr (R-Gloucester).
The tech tax repeal bill was approved by the Massachusetts House of Representatives on Wednesday. The legislation now heads to the governor’s desk where Governor Deval Patrick has indicated he will likely sign it. He has called the tax a “serious blot” on the state’s reputation as a tech hub.