Bryley Basics (in 100 words): Mass. enacts sales tax on Computer Services

Massachusetts is now one of the few states collecting sales tax on services; the 6.25% tax targets specific computer system design services as of July 31st.

The legislation was approved July 24th, 2013 with the intent to tax customization services; the relevant, broadly worded phrases:

  • “’Computer system design services’, the planning, consulting or designing of computer systems that integrate hardware, software or communications technologies…”
  • “…modification, integration, enhancement, installation, or configuration of standardized software.”

See Section 48 and Section 49 of Chapter 46 of Massachusetts Session Laws at for details.

Fortunately, this legislation was followed on July 25th with guidance from the Massachusetts Department of Revenue (DOR) in Technical Information Release (TIR) 13-10, which helped to narrow the discussion with these clarifications:

  • “…generally intending to tax software services that modify, enable, or adapt prewritten software to meet the business or technical requirements of a particular purchaser and to operate on the purchaser’s computer systems…”
  • “…may also be described as customization services with respect to prewritten software.”

TI 13-10 also provides guidance on sourcing; when the tax would be applied if the provider or consumer occupies multiple tax jurisdictions.  TIR 13-10 is available at