[jbooth]

MA is actually in the lower third of states both in terms of their income tax rate (5.3%) and sales tax rate(6.25%). They could increase one or both of those by a small amount, raise a ton more money and still be a low-tax state, without getting into crazy crap like this.

[twoodfin]

But it's in the top fifth of per capita tax burden:

http://taxfoundation.org/article/state-tax-collections-capit...

Part of that is having both a sales and an income tax. Some states have one or the other.

[jbooth]

Apples and Oranges. I'm talking rates, you're talking dollars. People in MA make and spend more money than people in Alabama, so you'd have a higher per-capita tax burden even with lower rates in MA.

Per capita income minus dollars taxed or the ratio of the two might be a better measure than either of ours for what you're trying to get at.

Point being, the rates are low and could easily be added to without dumb-ass industry specific things like this.

[bostonpete]

Whether the sale of customized software is subject to sales tax or exempt, you're going to have "industry specific things like this".

This sort of software is in something of a hazy middle ground between shrink-wrapped software on the shelf and IT consulting services. Taxing it may seem dumb to us when compared with other states, but probably seems like a reasonable move to at least consider to most.