The Massachusetts Senate and House of Representatives have voted to override a veto from the Governor and enact legislation that imposes a sales and use tax on computer system design services and the modification, integration, enhancement, installation, or configuration of standardized software, effective July 31, 2013. 

"Computer system design services" refers to the planning, consulting, or designing of computer systems that integrate computer hardware, software, or communication technologies, and that are provided by a vendor or a third party. The tax does not apply to data access, data processing, or information management services.

Presently the tax is unclear and complex. In addition, computer services and data processing are abstract and hard to define. This makes the boundaries of the tax both blurry and uncertain. Rest assured that Gray, Gray & Gray is  currently reviewing the language of the final bill and  awaiting additional legislative guidance so that we can better determine the impact for our clients.

As always, if you have any questions, please feel free to contact Gray, Gray & Gray's Tax Department at (781) 407-0300.