Massachusetts Repeals Tax on Computer System Design Services and the Modification of Pre-Written Software

DALLAS, Oct. 2, 2013 /PRNewswire/ -- On September 27, 2013, Governor Deval Patrick signed into law Massachusetts House Bill 3662 ("H.B. 3662"), which repeals the Commonwealth's sales and use tax on computer system design services and the modification, integration, enhancement, installation, or configuration of pre-written software recently implemented by House Bill 3535 ("H.B. 3535"). H.B. 3535 became effective July 31, 2013, a mere 58 days ago. The repeal applies retroactively to July 31, 2013, with companies required to return to customers any sales tax collected for these services.

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The Massachusetts Senate voted unanimously for the repeal, and the House of Representatives had only a lone dissenter. The Legislature originally passed the law by overriding the Governor's veto of H.B. 3535 by a vote of 123-33 in the House and 35-5 in the Senate. The tax on computer system design services and the modification, integration, enhancement, installation, or configuration of pre-written software was expected to raise $160 million for the Commonwealth's transportation systems and projects.

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Jeremiah T. Lynch

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