The Patrick administration is mulling a repeal of the controversial software tax that has threatened Massachusetts' reputation as a tech hub — but only if Beacon Hill leaders can find another way to raise the revenue, according to the state's top economic development official.
"We're actively considering that the tax ought to be replaced with something else that could generate a comparable amount of revenue," Greg Bialecki, secretary of Housing and Economic Development, said yesterday of the debate concerning the software services tax, which has spawned potential ballot initiatives, phone-line protests and a statewide outcry from the tech industry.
"It's not an easy question," Bialecki said. "There are no taxes or other ways to raise revenue that we can think of that are easy and popular."
Gov. Deval Patrick and top Democratic lawmakers took heat from business leaders during a 90-minute, closed-door meeting this week. The business bigwigs, Bialecki said, made it very clear the tax "simply cannot be clarified" and that the Department of Revenue's efforts to sort out its implications are "not going to be the fix."
Repealing the tax — which imposes a 6.25- percent tax on everything from website design to application work — is now on the table even as administration officials are still working to "interpret" the tax for businesses.
The hitch is finding another way to generate the $161 million the state is counting on from the tech tax to put toward transportation projects. Past Patrick proposals, including changing the income tax code, have admittedly "come and gone," Bialecki said.
"We are open to ideas," he said. "We are working with the parties ... to see if there's an alternative way to raise that revenue that has less of an effect on the issues that we care about."
Republicans, meanwhile, are pushing to repeal the tech tax, sparked by GOP gubernatorial hopeful Charlie Baker, who condemned it this week.
Beacon Hill minority leaders Brad Jones and Bruce Tarr plan to unveil new legislation Monday.
Some Democrats, including state Sen. Karen Spilka — who is running for U.S. Sen. Edward J. Markey's vacant congressional seat — have already changed their tune, saying they now want to kill the tax, after they pushed it earlier this year.
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