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Deval Patrick Changes Course, Abandons Tech Tax

Convinced a tax on technology services would do harm to Massachusetts' reputation for innovation, Gov. Deval Patrick withdraws support for the measure.

by / September 11, 2013
Massachusetts Governor Deval Patrick Flickr/Nathan Ouellette/Governor's Office

Heeding cries from the technology community, Massachusetts Gov. Deval Patrick announced Tuesday, Sept. 11,  that he has withdrawn his support for a controversial tax on technology-related services, according to a report in The Boston Globe

Originally proposed by Patrick in January as a way to fund improvements to the state's decaying transportation infrastructure, the tax was subsequently passed by the state legislature. It would attach a 6.25 percent sales tax to things like software modifications, program configuration and website development.

Technology leaders argued that despite the tax's economic consequences, it also threatens Massachusetts' stature in the country and the world as a place that embraces forward-thinking technology practices.

“It’s time for it to go,” Patrick told the Globe. “I’m persuaded that the impact to our reputation is too problematic. We’ve worked really, really hard to establish ourselves as an innovation hub in the world, and we ought not do anything that compromises that.”

An alternative funding source for transportation projects, cited as a priority for Patrick's second term, has not yet been identified.

Andy Singleton, president of Assembla Inc., a software company in Needham, Mass., applauded Patrick's revised position on the tech tax. “Almost everyone who has looked closely at this law now realizes it’s a bad law. Everyone realizes the tax needs to be repealed. It can’t be replaced.”


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