Mass. Governor Patrick Signs Repeal of “Tech Tax”

After saying he hoped he wouldn’t be asked to sign a bill repealing the sales tax on technology services without replacement revenues in place, Governor Deval Patrick did just that Friday. When asked how to plug the resulting estimated 160 million dollar hole in the budget, Patrick says he’s already made numerous suggestions and now it’s up to the legislature.

“We’ve met with them together with the industry, leaders in the industry made a whole lot of suggestions and the leadership kept taking things off the table,” says Patrick. “I think it’s on them now to come up with a way to plug the hole. Now the good news is that revenues are performing well so far this fiscal year, but it’s early.”

Still lawmakers hope that growth in tax revenues beyond budget expectations so far will go a long way towards making up for lost revenue. The initial measure which passed would have placed a tax on certain segments of the computer service industry. But eventually Patrick and Democratic legislative leaders were persuaded after the tax was signed into law that they should repeal it, with Patrick saying it represented a “serious blot” in a state known for hosting a significant technology sector.