EagleTribune.com, North Andover, MA


September 28, 2013

Column: How tech tax was repealed and what's next

The business community is hard pressed to get a break. The Legislature is like a cook and the business community is a lobster in a pot of warm water. Slowly, the water gets hotter and the lobster keeps saying, “It’s not so bad,” but suddenly, the lobster is cooked.

For months, the Legislature was debating how much to raise taxes. In the end, legislators passed several new and higher taxes including a perpetual increase to the gas tax and a new 6.25 percent sales tax applied to computer software services without a single public hearing. Only 33 representatives and three state senators, approximately 18 percent of the Legislature, voted against the tax hikes.

But a small group of business owners and entrepreneurs didn’t let the hot water cook them; instead they learned how to turn on their own heat. Joe Baz lives and works in Cambridge, and since 2004, he’s been a business owner.

Baz first heard about the tax on Aug. 2 and quickly realized his company had no authoritative guidance on how to comply. His options were limited; if he were to try to comply, he could be sued by his clients for overcharging them on a tax that isn’t supposed to be collected or he could face stiff penalties or even up to five years in prison for not complying. Baz is right to think the tech tax is egregiously unfair to businesses in the respect that it was vague, obfuscated from the public during its creation and debate and put businesses at a permanent disadvantage with those in neighboring states, which he competes with.

When I asked Baz to describe his interaction with lawmakers, it was mixed. On the one hand, he had conversations with state Sen. Karen Spilka, D-Ashland, and state Rep. Ryan Fattman, R-Sutton, who were both extremely helpful and empathetic to his situation. On the other hand, the legislators who represent his hometown, state Rep. Marjorie Decker, D-Cambridge, and state Sen. Patricia Jehlen, D-Somerville, never returned his calls.

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