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Tax On Computer, Software Services Turning Into Political Kryptonite

BOSTON (CBS) --- A little-noticed part of Beacon Hill's recent tax hikes to fund transportation is suddenly getting plenty of notice.

Not since 1990, when a sweeping expansion of the sale tax caused a huge political upheaval before it was finally scrapped, has anyone seen anything like it.

The new tax on computer and software services is also turning into political kryptonite.

Now, a key supporter of the tax wants to repeal it.

People are not happy with Sen. Karen Spilka's support for the tax package and the first-ever application of the state sales tax to computer and software services.

It's forced the state revenue department to issue scores of clarifications and releases.

"DOR will not take a heavy hand in enforcing this law during this transition period," said Department or Revenue Commissioner Amy Pitter.

Spilka has changed her mind since supporting the tax, saying;

"It became clear to me that it was confusing, it was unclear."

Prompting Spilka, who happens to be running for the congressional seat being vacated by Ed Markey, to file a bill repealing the brand-new tax.

"However well-intentioned it may have been, it wasn't fully clear to some of us the impact that this would have," said Spilka.

Chris Anderson, President of the Mass. High Tech Council says it wasn't thought through.

"This was the result of somebody with an old tax policy trying to fill a budget gap in the name of transportation without thinking through the impact on the small and medium-sized businesses," Anderson said.

So Anderson is leading a move to scrap the tax through a question on the Nov. 2014 ballot.

"This is an issue that will re-galvanize the employer community in a way that we haven't seen in a number of years," he said.

Three of Spilka's competitors in the Democratic Primary for Congress also voted for the software tax.

Senators Will Brownsberger and Katherine Clark now back repeal and representative Carl Sciortino says he's undecided.

Middlesex County Sheriff Peter Koutoujian says he wouldn't have supported the tax.


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