Senator Defends 'Yes' Vote On Massachusetts Software Services Tax

Despite calls for its repeal, Democratic Massachusetts State Sen. James Eldridge stood behind his decision to vote for the state's new software services tax but added he was also looking into complaints from his district.

Businesses that deal in software services have been up in arms since the July 31 extension of the 6.25 percent Massachusetts sales tax to their services performed in the state, which is the highest such state tax on software services in the nation. A petition filed last week intends to add the issue to the November 2014 ballot in hopes of repeal.

Democratic Sen. Karen Spilka Thursday submitted a bill to the state legislature to reverse the tax after originally voting in favor of it.

Eldridge said the tax was created, along with increases in taxes on cigarettes and gas, to raise funds for transportation and the fiscal year 2014 budget.

[Related: What Do You Need To Know About The Massachusetts Software Services Tax? ]

"It's not just as simple as to say, 'Well, let's repeal this tax.' As a legislator it's important to make sure the revenue is there to support the things important for my constituents," Eldridge said. "It's not being fiscally responsible to just eliminate a source of revenue."

The House voted 123-33 and the Senate voted 35-5 to pass the transportation bill. Other requests for comment from legislators who voted for the bill were not returned, including multiple requests to Sen. Stephen Brewer, Chair of the Senate Ways and Means Committee.

Eldridge was part of an original proposal, called An Act to Invest in Our Communities, which would have raised the income tax, doubled personal tax exemptions and raised capital gains taxes. At around the same time, an alternative tax, similar in content to the one now in place, also was proposed. The tax originally was vetoed by Gov. Deval Patrick, who thought it did not raise enough revenue, and then overridden by the legislature into law.

"It's important to keep in mind going into this session there was a pretty overall commitment not only from legislature and the governor, but also from key transportation advocates, including the business communities, that we needed to increase revenue to upgrade our transportation infrastructure," Eldridge said. "Going into this session there was a pretty clear consensus that we needed to raise revenue."

Eldridge said that he would have preferred the package he originally supported, but many of his colleagues were uncomfortable raising the income tax and felt more at ease raising revenue through increasing taxes on goods and services.

"That's certainly a very different proposition than what I was advocating for. But what happened within a couple months is that most of the legislature recognized that we needed to raise revenue, that was the cause of more of my colleagues supporting it," Eldridge said. "In the end I did vote for it because we did need to raise $6 million for transportation and this was the tax package before us."

NEXT: Eldridge Looks To Businesses For Next Steps

Eldridge said that he had received many calls and emails from concerned business owners in his constituency and, if he hadn't already responded to them, he hopes to get to them all soon.

"It's too early to say what other action will happen, but I do think the calls and actions from constituents and business owners has definitely gotten our attention," Eldridge said. "I haven't made a decision on how to go forward, but certainly the calls I'm getting I'm taking very seriously."

Some of the outcry over the tax is in reference to the lack of a public hearing for the bill. While Eldridge agreed that this was a mistake on the part of the legislature, he said that businesses had plenty of time to approach their representatives as it was proposed in February. He said he couldn't recall anyone reaching out to him with concerns prior to his vote for the tax.

"I think it's important for all of us, as citizens, as voters, as residents to get engaged in the political process, to advocate," Eldridge said, adding "I'm glad to see it happening now."

While he maintained that he is working to inform himself more about the concerns of the community, Eldridge said that he stands behind his decision for the time being. He asked business owners to remember the need to upgrade Massachusetts' transportation network, and that the money has to come from somewhere.

"The question is: If it's not this tax, then which tax would they prefer?" Eldridge said. "I do think at the end of the day there needs to be some source of revenue to pay for transportation and the state budgets."

PUBLISHED AUG. 16, 2013