tax may affect N.H. businesses

Wednesday August 21, 2013

CONCORD, N.H. (AP) -- A Massachusetts sales tax applied to computer software design services may affect some New Hampshire businesses with a presence in the state.

It took effect July 31. The 6.25 percent sales tax in Massachusetts now applies to "certain services relating to computer system design and to modification, integration, enhancement, installation, or configuration of standardized or prewritten software."

New Hampshire’s Business and Industry Association says the tax may inadvertently capture New Hampshire businesses with a presence in Massachusetts.

Businesses with a physical presence in Massachusetts providing services covered by the tax to Massachusetts customers may be subject to what’s become known as the "tech tax."

The association says says the definition of "a physical presence" may be as little as a single sales representative with a home office in Massachusetts. The association urges its members and any New Hampshire businesses, particularly businesses closer to the Massachusetts border, to seek outside advice and counsel if necessary.

"We want to make sure New Hampshire businesses are aware of this new tax and acknowledge that it could possibly impact where they choose to do business and from whom they choose to purchase goods and services," BIA President Jim Roche said.

Opponents of the tax in Massachusetts are pushing a 2014 ballot question that would repeal it. They call the new tax "a grave danger to the future of the innovation economy."

Supporters say the tax is narrow in scope and that they expect it to generate $161 million in new revenue.


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