News Massachusetts to Tax Software Development

Massachusetts to Tax Software Development

Beginning July 31, most software developers and consultants in Massachusetts will have to add a 6.25 percent state sales tax to their invoices. According to the state Department of Revenue, the tax applies to “computer system design services and the modification, integration, enhancement, installation or configuration of standardized software.”

Some worry that the broad language of the bill means it could apply to cloud computing, open source software or third party components. According to Michael J. Widmer, president of the Massachusetts Taxpayers Foundation, “This is the most far-reaching software services tax in the nation.”

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