[skrebbel]

Wow, so if I run a SaaS from, say, the Netherlands, I'm going to have to pay Massachusetts some kind of extra income tax? What if I don't even know where my customers reside?

The US just became a little more EU. Congratulations!

EDIT: I meant 'import tax' where I wrote 'income tax'. Sorry for the confusion.

[mjn]

It's not an income tax, it doesn't apply to hosted services, and it doesn't apply to companies not doing any business in Massachusetts.

The people this impacts are those currently consulting for MA clients in a capacity that was not considered software sales previously, but now might be. For example, if you sold an analytics package in boxed software, that was always clearly a "sale" and is unchanged. But if your business is based around, for example, having a free SaaS analytics service, along with an offer that enterprise clients can pay you to get a self-hosted version installed on their own servers, that has typically been treated as consulting in MA, but is being reclassified as selling software. The theory is that you are basically selling software (a copy of the analytics package), not really consulting, and the fact that you didn't put it in a box with a bar code is irrelevant. The complaints are largely based around the vagueness of the definitions and the short notice of implementation.

[kalleboo]

It only applies if your company has a physical presence in Massachusetts (shop or office). State taxation is the same reason Amazon avoid putting warehouses in certain states, since it means they have to start collecting sales tax on everyone in that state. As long as they stay out of the state and do all their dealing across borders, they're don't have to collect the sales tax.

[metaphorm]

sales tax, not import tax. the tax is implied internally as well, not only to transactions from foreign businesses.