Budget Amendment ID: FY2022-S3-109

OTH 109

Remote Software Tax Clarification

Mr. Crighton moved that the proposed new text be amended by inserting after section 17, the following 2 sections:-

SECTION XX. Section 1 of chapter 64H of the General Laws, as so appearing, is hereby amended by striking out the definition of "sale and selling" and inserting in place thereof the following definition:-

"Sale" and "selling", include (i) any transfer of title or possession, or both, exchange, barter, lease, license, rental, conditional or otherwise, of tangible personal property or the performance of services for a consideration, in any manner or by any means whatsoever; (ii) the producing, fabricating, processing, printing or imprinting of tangible personal property for a consideration for consumers who furnish either directly or indirectly the materials used in the producing, fabricating, processing, printing or imprinting; (iii) the furnishing and distributing of tangible personal property or services for a consideration by social clubs and fraternal organizations to their members or others; (iv) a transaction whereby the possession of property is transferred but the seller retains the title as security for the payment of the price; (v) a transfer for a consideration of the title or possession of tangible personal property which has been produced, fabricated or printed to the special order of the customer, or of any publication; (vi) the furnishing of information by printed, mimeographed or multigraphed matter, or by duplicating written or printed matter in any other manner, including the services of collecting, compiling or analyzing information of any kind or nature and furnishing reports thereof to other persons, but excluding the furnishing of information, which is personal or individual in nature and which is not or may not be substantially incorporated in reports furnished to other persons, and excluding the services of advertising or other agents, or other persons acting in a representative capacity, and information services used by newspapers, radio broadcasters and television broadcasters in the collection and dissemination of news and excluding the furnishing of information by photocopy or other similar means by not for profit libraries which are recognized as exempt from taxation under section 501(c)(3) of the Federal Internal Revenue Code; (vii) the performance or receipt of services, for a consideration, excluding (a) services performed by an employee for his employer whether compensated by salary, commission, or otherwise, (b) services performed by a general partner for his partnership and compensated by the receipt of distributive shares of income or loss from the partnership; and (c) the performance of services for which the provider is compensated by means of an honorarium, or fee paid to any person or entity registered under 15 USC 80b-3 or 15 USC 78q-1 for services the performance of which require such registration, for services related thereto or for trust, custody, and related cash management and securities services of a trust company as defined in chapter 172; and (viii) a sale within the meaning of subsections (i) to (vii) facilitated by a marketplace facilitator.

SECTION XY. Said section 1 of said chapter 64H, as so appearing, is hereby further amended by striking out the definition of "tangible personal property" and inserting in place thereof the following definition:-

''Tangible personal property'', personal property of any nature consisting of any produce, goods, wares, merchandise and commodities whatsoever, brought into, produced, manufactured or being within the commonwealth, but shall not include rights and credits, insurance policies, bills of exchange, stocks and bonds and similar evidences of indebtedness or ownership. For purposes of this chapter, ''tangible personal property'' shall include gas, electricity and steam. A transfer or license of standardized computer software, by virtual, electronic, telephonic or other means and including the transfer or license of the right to use standardized computer software that is remotely hosted, shall also be considered a transfer of tangible personal property. The commissioner may, by regulation, provide rules for apportioning tax in those instances in which software is transferred for use in more than one state.