The Appellate Tax Board recently ruled that a business qualified as a manufacturer and a corporate excise reduction because it was engaged in selling remotely accessed software, not providing a service.
Why This is Important… Massachusetts tax law provides state and local tax benefits to companies that qualify as manufacturers. Decades ago, Massachusetts subjected software to sales tax, making software writers eligible to qualify for manufacturing status. This case clarifies that standardized software provided over the Internet subject to sales tax also qualifies the provider as a manufacturer. The fact that a physical package is not created and sold is not material as long as what is being sold is subject to sales tax and is standardized.