[mjn]

I don't disagree with the macro point, but if you don't like this particular tax, Texas would be a poor choice of alternatives, because it already applies sales tax to an even broader class of software services than MA is now doing. For example, even hosted services like SaaS are covered under the Texas taxable-services definition, in cases where Texas has sales-tax jurisdiction (e.g. your business has an Austin office, and you have clients in Houston).

See section Data Processing Services here: http://www.window.state.tx.us/taxinfo/taxpubs/tx96_259.pdf

Examples of data processing include ... web hosting, web site creation and maintenance; data storage, including offsite backup of electronic files; conversion of data from one type of medium to another... . Data processing services providers include sellers of software as a service and application service providers.

That would, for example, mean that a service like Tarsnap or Heroku would be subject to Texas sales tax, if they had a Texas nexus for sales-tax purposes, which isn't the case in Massachusetts even under the new law.

[arohner]

I disagree, because in Texas, the sales tax is significantly more clear who is affected. "You have an office in Texas, you pay tax" is pretty simple.

[jeremybencken]

'data processing' is still unclear for many. I'm in Austin and last month I had a graphic designer/front-end programmer add sales tax to an invoice because he thought he had to.