Una red social para el cambio social

Local computer software-development companies are watching closelyCOMPAQ Presario A970ED CD DVD Drive as discussion at the State House starts this week on Governor Chafee’s plan to overhaul the state sales tax. At issue is whether their industry, which state leaders have identified as one of the keys to rebuilding Rhode Island’s stagnant economy, will be subject to the governor’s proposed 6-percent tax on services. State officials maintain that services provided by computer and software consultants will not be affected by the proposal, though the administration does propose collecting sales tax on mass-produced software that is distributed electronically. “Generally, we areCOMPAQ Presario A970EF CD DVD Drive trying not to tax those knowledge economy-based businesses and those professional services and consultant services businesses,” said Paul L. Dion, chief of the Office of Revenue Analysis at the state Department of Revenue. He has said that proposed language that would have imposed a 6-percent tax on services provided by “software publishers” will be struck out in future amendments. That language, Dion said, was “mistakenly” included in the governor’s proposal. “We were writing this bill under pretty tight deadlines.” But software developers and consultants — including former gubernatorial candidate and Moderate Party founder Kenneth J. Block — say they have yet to receive a definitive answer from the administration. Allan Tear, owner of The Aptus Collaborative, a Providence-based firm that helps companies launch new products and services, says the concern is that Chafee’s plan would put local companies at a “significant disadvantage” with their competitors when vying for large, out-of-state contracts. “You’re taking about potentially adding 6 percent to a $25,000 to $100,000 project,” he said. Dion said that computer-software companies would be affected by the proposed sales-tax changes only ifCOMPAQ Presario A970EE CD DVD Drive they created and sold software aimed at a broad audience. “If you write a program like Microsoft Excel and sell it to a bunch of companies, then, sure, that falls into that category,” he said, pointing to proposed language that would tax so-called “pre-written computer software.” Custom software created for a specific client would not be subject to the tax under the proposal, he said. Dion says this would bring Rhode Island in line with the majority of states. As of 2007, at least 29 states, including Massachusetts, Connecticut, Maine and Vermont, taxed prewritten software that’s distributed electronically or by “load and leave,” as Chafee proposes. (All states with a sales tax, including Rhode Island, already tax prewritten software sold in a hard-copy format.) But Block, who lost toCOMPAQ Presario A970EG CD DVD Drive Chafee in a November and is president of Simpatico Software Systems, said that consultant work done by software developers and programmers could still be subject to the 6-percent sales tax if the state considers it “temporary help services,” which is another category of services that the governor proposes to tax. “I’m 99-percent sure — with the caveat that I’m not a lawyer — that that’s not the case,” Dion said in response. “That statute deals with staffing agencies, and I don’t believe [Block’s company is] a staffing agency.” Chafee proposes lowering the state sales-tax rate from 7 percent to 6 percent and adding a number of currently exempt items to the tax, including services such as landscaping, dry cleaning and haircuts. He also proposes a new 1-percent sales tax on some currently exempt goods, like clothing, water and coffins. House and Senate finance committees have scheduled hearings on the plan for Wednesday and Thursday.