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In the second legislative move against the tech tax, Massachusetts Republicans announced Monday their intention to file legislation to repeal the tax.
The announcement, given at a press conference at Genuine Interactive in Boston, comes just two weeks after the caucus held a series of roundtable discussions to learn about the pressures the tax has been putting on local software services businesses.
"Fixing it is unacceptable. Replacing it is unnecessary. [The Republicans] think the clear-cut solution to this problem is the outright repeal of this wrong-headed, misguided tax on the software innovation economy and if let stand as a tax on services will become the thin edge of the wedge to tax other services in the Commonwealth," said House Minority Leader Brad Jones at the event.
Jones said non-tech companies should join the effort against the tax as well because they could be next if the tax is seen as precedent.
The legislation will be modeled to mirror the language used in the petition to put the repeal effort on the November 2014 ballot.
"This has been a confusing enough situation," Senate Minority Leader Bruce Tarr said. "We don't need to have multiple versions of this legislation on the table. We need to have one, and we need to pass it."
Genuine Interactive CEO John Grayson said he has been forced to freeze the invoicing of his clients for two weeks as his company works to figure out what should be taxed and what should not.
"It's putting us at an economic disadvantage. It will strengthen the companies' positions who are trying take business away from Massachusetts and just make it hard to grow a business for someone who wants to stay in Massachusetts," Grayson said.
The Republican bill would be retroactive, meaning the taxes that businesses are currently struggling to figure out would be refunded. The tax went into effect on July 31, just a week after the state legislature passed it into law. Since it was passed, the tax has thrown the state into a flurry of confusion as businesses accuse the tax of being vague and too broad and work to figure out what it means.
However, Andrew Faria thinks it might be too good to be true. The CEO of iMedia Solutions and a leader in the Spark Coalition fighting for the repeal of the tax, Faria thinks that even though the legislation seems promising, it will not work to repeal the tax.
"We're hearing from the leadership in the State House and the Senate that they're not going to budge," Faria said.