Mass. Tech Tax Opponents Worried Tax Will Stick Around To Save Face

When asked if they thought Massachusetts' infamous tech tax would be repealed, opponents of the tax say they are worried the tax's supporters would rather hold onto the widely criticized tax on software services than face an uncomfortable conversation about flip-flopping on the issue in the next election.

The tax, which extends Massachusetts' 6.25 percent sales tax to software services provided to businesses in the state, has angered businesses across the state and the country. However, despite the growing number of businesses rallying together against the tax, which went into effect July 31, legislators who opposed the tax from the start are uncertain others will switch to their side.

"I would be shocked if the leadership thought it was a good idea to repeal a tax if it got passed," Rep. Matthew Beaton said.

[Related: Mass. State Rep: 10 Reasons I Opposed The Tech Tax, And Still Do ]

Beaton, along with 36 other legislators in the state House and Senate, voted against the tax before it became law as part of a bill to fund state transportation. There are 200 members in the House and Senate combined, most of whom are Democrats. Only five Democrats voted against the tax, while only one Republican voted for it.

"I think, politically, this puts the Democrats in a very awkward position. The tech tax is becoming extremely unpopular, so now they've voted for the tech tax," said Rep. Peter Durant, who voted against the tax.

Durant, a Republican, said that he doesn't anticipate the Democrats supporting a repeal of the software services portion of the bill because it would make it a bigger issue in the next election. He said that it would be easier for them to defend sticking with the tax than justifying backtracking on the issue.

"It's really a bad issue for Democrats going into 2014. For them, voting-wise, election-wise, it would be more damaging for them to repeal it," Durant said. "I wouldn't anticipate it being repealed by the legislature."

If it is not repealed by the legislature, there is a ballot petition before the state attorney general that could put the issue on the 2014 ballot. Beaton said that if the issue were put to vote before the Commonwealth, its repeal would be "almost automatic."

However, Beaton said that would not be the end of the fight. He said the legislature has a history of not enforcing passed ballot initiatives that it doesn't believe are favorable. He cited a ballot question from 2000 in which voters approved an initiative to lower the state income tax from 5.95 percent to 5 percent. The legislature overrode the issue and stopped the tax from lowering below 5.3 percent. Beaton said he worries that history would repeat itself with this tech tax.

"The problem about the ballot initiative, for me, is that Massachusetts has a history of passing things through a ballot initiative and the legislature overrides it," Beaton said.

There is already a measure proposed by Democratic state Sen. Karen Spilka to repeal the tax; however, it is a long process to get it through the legislature. Going forward, all of the legislators CRN spoke with said that they expect the issue to be on the Massachusetts ballot in Nov. 2014 if it is not repealed before then.

PUBLISHED AUG. 28, 2013