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Massachusetts Sales and Use Tax Change to Computer Software Services

July 31, 2013

Computer System Design and Customization of Prewritten Software Services become taxable.

As a result of newly-enacted legislation in Massachusetts, the sales and use tax law was amended to apply tax to the following services:

  1. Computer system design
  2. Modification, integration, enhancement, installation or configuration of prewritten software. These taxable services may also be described as customization services to prewritten software.

The effective date of the law change is July 31, 2013.

The Mass Department of Revenue issued “Technical Information Release (TIR) 13-10” dated July 25, 2013. The release provides initial guidance on the new statutory changes relating to definitions & rules, imposition of sales tax, calculation of use tax liability and filing of tax reports. You can read the release from the Mass Department of Revenue for more details. The Department anticipates further guidance in the near future.

The new Massachusetts sales tax legislation on computer and software services raises many questions. If you need assistance or guidance, please contact Paul McVay or any member of our State and Local Tax Group at or call 888-KLR-8557.

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