Even though the state repealed the tax in late September, more than 250 vendors filed returns submitting nearly $800,000 in sales and use tax on computer and software services. Because the law was repealed retroactively to the date the tax took effect, vendors are entitled to a full abatement of those taxes which must be returned to the customer from whom the tax was collected.
The Department of Revenue set up a process to quickly process those claims in under a week, but, so far, only 30 vendors have submitted an application for abatement. With the December 31, 2013 deadline for filing an abatement for the computer services tax fast approaching, DOR is reminding vendors on how they can take advantage of the expedited process.
The application must be filed electronically at http://mass.gov/webfile where the vendor must:
1. log-in to their webfile for business user account
2. Select “File, Pay or Amend Returns”
3. Select “Amend a Return”
4. Click “Amend” for the period 8/31/13
5. Complete and submit the amended return
6. Print the confirmation page that results and fax to 617-660-7274 for expedited processing.
If requested by DOR, the vendor may need to provide supporting documentation that show the tax relates solely to software and computer services transactions. Refunds will not be issued until the vendor establishes that the tax has been repaid or credited to the retail customer.
Vendors who filed a return but did not remit the taxes they may have collected on computer and software services must also return the tax to the retail customer and file an abatement application to amend the return and show no tax on computer and software services was owed. Otherwise, the department may bill and initiate collection activity based on the inaccuracy of the return.