The state’s computer software industry wasn’t paying much attention to politics when a tax impacting its members was passed into law this summer, but they are paying attention now. And to give credit where it’s due, they picked up the political game pretty quickly.
Governor Deval Patrick’s call for a repeal of the new 6.25 percent sales tax on business and software services signaled its end Wednesday, and on Thursday, House Speaker Robert DeLeo and Senate President Therese Murray declared that it would be repealed. The tax, which was designed to raise as much as $161 million to be used for transportation improvements, went through the lengthy legislative process largely unnoticed but a firestorm erupted when it was passed into law.
The software industry cried foul, arguing that it was being taxed to pay state transportation costs that it is not incurring. Florida used the law’s passage to try to recruit companies affected by the tax, raising concerns that other states would follow suit and the tax could weaken a thriving Massachusetts industry. Business groups, including the Berkshire Chamber of Commerce, came out against the law, and a proposal to put repeal of the tax on the ballot in November of next year quickly gained momentum. The industry proved surprisingly adept at applying political pressure, winning key allies, and getting its word out through the media.
While the law is finished, an issue remains. Governor Patrick wants the lost revenue to be made up while Mr. DeLeo stated that he is "emphatically" opposed to passing any new taxes to replace the revenue and Ms. Murray is in apparent agreement. That is the popular stance, but it also means that they are emphatically opposed to making the desperately needed transportation upgrades the lost revenue would have financed.