Tax Article - Software Programs Delivered in Intangible Form to Be Taxed in Massachusetts

Governor Romney’s FY2006 Budget proposes to close a loophole and charge a sales tax on canned software that is downloaded from the internet, or software that is installed by an outside consultant who retains the CDROM or Disk. Currently software bought in a tangible form (ie CDROM from a store) is subject to sales tax. This new legislation is going to tax both intangible and tangible purchases of software as part of the Governor’s loophole closing initiative. This proposal is intended to generate $50 million for the state in FY2006. 

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