Not On Our Watch – An Insider’s Perspective to the Technology Tax

By State Representative George N. Peterson, Jr.

Geroge PetersonToo often do I encounter an eye roll or a scoff when I, or my Republican colleagues in the Massachusetts State House, voice my opposition to a tax increase. This either has to do with being a Republican in Massachusetts, or the fact that people automatically assume Republicans are going to be against any sort of increase in revenue. However, there is often a method to our madness, and the technology tax is a perfect example.

If you care to join me for a trip down memory lane, I would like to take you back to April when Governor Deval Patrick released his $1.9 billion transportation finance proposal. In this proposal was a tax on the bread and butter of the Massachusetts economy – the technology sector. As soon as my Republican colleagues and I discovered this ill-conceived and ill-timed tax on certain software services, we began to raise the red flag.

Unfortunately in Massachusetts, numbers in the Legislature don’t favor Republicans. We knew we had our work cut out for us, but we also knew that in a state which thrives on the services rendered by the high-tech industry, this tax would not only stifle the Commonwealth’s entrepreneurs, but would have a detrimental trickle-down effect on residents and customers alike. We were determined to have our voices heard on behalf of the technology industry and the taxpayers of Massachusetts.

Our opposition was vehement and our effort was relentless. In early April, the Republican Caucus in the House of Representatives went as far as to propose an alternative transportation plan. However, unlike previous proposals which relied heavily on tax revenue, the legislation offered by House Republicans was free from any attempt to raise taxes on Massachusetts residents. Again, back to the numbers game, our proposal was defeated. While this was another loss for the taxpayers and technology sector, we would not be deterred.

Later in April, a $500 million transportation plan offered by the Speaker of the House and the Senate President was adopted in the House of Representatives. The plan, opposed by Republicans, included the tax on the innovation economy. After being adopted in the Senate, and some back and forth with the Governor, the transportation finance legislation was signed into law, and the tax on the high-tech industry was complete – or so they thought.

Republicans were persistent in our opposition to the technology tax. Just because it was signed into law did not mean we were going to give up. We immediately went back to the drawing board, and in early August embarked on a series of eight technology tax business roundtables. Announced as part of a concerted effort by the Massachusetts House and Senate Republican Caucuses to repeal the crippling technology tax at the legislative level, the weeklong series of roundtable discussions included conversations with technology industry professionals and representatives from area Chambers of Commerce.

Upon completing our roundtables, House and Senate Republicans held a press conference at Genuine Interactive, a leading interactive agency, to unveil legislation to repeal the Democrat-approved job-killing computer services tax. The legislative measure, which contains the same language as the ballot question recently approved by Attorney General Martha Coakley, is just the latest effort the minority party put forth to eliminate this unprecedented tax.

Earlier this month, in a complete 180 from April, the Governor, Speaker of the House, and Senate President announced their intention to join the Republican Caucus, and repeal the technology tax. This epiphany from Democratic Leaders is a testament to the hard work of legislative Republicans, the technology sector, and citizens from around the Commonwealth. Our voices were heard – a tax on the technology sector is reckless.

The next time Republicans stand up to a tax increase don’t automatically roll your eyes; we are probably on to something!

State Representative George Peterson, Jr. (R-Grafton) serves as the Assistant House Minority Leader in Massachusetts. He represents the 9th Worcester District which includes the towns of Grafton, Northbridge, and Upton.

Rep. George N. Peterson, Jr.
House Assistant Minority Leader
State House, Room 124
Boston, MA 02133
T: 617-722-2100
F: 617-722-2390
George.Peterson@mahouse.gov

legislative aide: David Muradian
David.Muradian@mahouse.gov

The Tech Tax Repeal – Awakening Small Tech Businesses

Small tech companies, entrepreneurs, and freelancers = tech lords (aka the new Tech Lords, according to the Globe) ~ who knew?

Massachusetts Tax Tech Law

But first, two important notes:

• The collection deadline for the tech tax has been extended to Oct. 20th.
See info here.

• The repeal is not final. It is very important to stay in touch with your legislator and ensure it is successfully voted down. If repealed, maybe we can all convince customers to spend that money on additional services vs. getting refunds!

So, how did the repeal effort get as far as it has? There were many different angles and many different people who put pressure on the issue. It was truly a situation where the sum of the parts made the difference – no one person or event caused the tax to topple.

Here’s my story, and the perspective I had:

THE ALARM SOUNDS

Andy Singleton, a client and CEO of Assembla, brought this up to me in July. Andy went on to have a critical role as unofficial spokesperson and showing a great ability to cut to the most critical and damaging aspects of the tax. The Governor of Florida’s letter to business owners showed that the tax could be used as a weapon against Massachusetts. Reputational damage was immediate.

THE THREE PRONGS OF ATTACK

The effort to gain a repeal quickly formed into three efforts:

  • The ballot initiative, led by MA High Tech Council and Massachusetts Taxpayers Foundation – highly professional representatives of bigger businesses. The ballot initiative put pressure on the legislature and Governor, ensuring the issue would be central to the 2014 elections.
  • The injunction, this was led by SPARK Coalition President Joe Baz and Scott Foster, an attorney from Springfield. The SPARK coalition started as loose group of tech business owners, and formalized into a 506c6 to be able to push the injunction. This threat put another strong wall of pressure against the legislature and Governor.
  • The repeal efforts. This was initiated by Senator Spilka and pursued aggressively by both the now-awakened tech community and the Republicans (who were always against the tax).
    • The tech community looked at this as a non-partisan issue; it was about making the state great, not politics.
    • Senator Spilka noted that if 5 people contact a legislator, it is considered a high number. Our goal was to get that number much higher.
    • Numerous tech companies chipped in with help – it was effectively a 24×7 very hard-working, loosely organized volunteer effort. The revolutionary militias came to mind because what we lacked in knowledge and resources we made up with hustle. I cannot speak highly enough of the people I was fortunate enough to meet and work with.
    • The Republican caucuses made it clear this would become a major rallying point for them, and keep the issue in the news.
    • MA High Tech Council provided guidance about the political landscape and kept the issue in the press.

THE TURNING POINT

Governor Patrick came back from the Labor Day holiday and immediately called together legislative leaders to deal with the rising tide of protest. The leadership position at that point was behind “repairing” the tax by asking the Department of Revenue to make clearer and more limited rules for its application.

Industry representatives were saying it could not be repaired, and when people actually looked at the details of tax, they tended to agree. Plus, there were issues of “reputational damage”.

Mike Widmer of the MA Taxpayers Association had a study showing that MA had the highest tax rate in the nation for IT services. Patrick by that time was considering “repeal and replace.”

We are on the verge of winning and stopping this horrendous tax and blot on the innovation economy in Massachusetts. There were so many people and so many moving parts, it’s very difficult to say what, if anything was the most effective – other than the power of it all together.

It is very important to stay in touch with legislators and to ensure that the vote goes through successfully.

GOING FORWARD

Before this, I pretty much viewed politics as something to avoid – occasionally watching as sport. Now I see that has to change, but how? The community tech entrepreneurs is now asking the same thing. Should they lobby? Educate? Ensure their voice is heard?

The techtax had fatal flaws because it was designed by people with no knowledge of software. It’s critical that people who really understand software are at the table as future policy is set. It’s also clear that connection of the small tech companies, freelancers, and entrepreneurs to existing organizations and chambers needs to be improved.

FINAL NOTE

I would like to thank both Representative Patterson and Senator Moore for being responsive – I initially sent an email, not expecting a response, but got personal ones. It was pleasant to see that my voice could be heard.

I learned a very valuable lesson there. I also especially appreciate the initiative and leadership that Representative Peterson and Senator Spilka showed around getting the tax repealed.


Jim Henderson is the founder and CEO of The Exemplary Group, as well as moderator and contributing blogger for Chief Executive Boards International. He has helped numerous founders and executives navigate and execute solutions to
their most challenging people, product, and pipeline issues.

He moved to Grafton last year and currently spends most of his free time enjoying time with his wife and 11-month old son.

He is a career software entrepreneur, having bootstrapped a company into the Inc. 500 as one of America’s fastest growing company. Jim can be reached at 774-545-5184.

Facebook Advertising Options that will Amaze You!

Facebook Advertising can work, if you consider it part of your marketing strategy. For a product or service launch, for example, Facebook advertising should be a part of your promotion, but not the whole shebang. Word of Mouth is probably still the biggest promoter 😉

However, Facebook advertising should be in every businesses toolbox!

Here are a few of Facebook’s advanced options that will give you the best bang for your advertising dollar.

Power Editor

There is an area in Facebook called the Power Editor. Once logged into Facebook, just go to facebook.com/powereditor. If you have never run an ad of any kind, you might not see the Power Editor until you create an ad. It’s a little clumsy getting around in that area at first but the possibilities are powerful.

I’ll be covering Power Editor in the BVCC 2 hour advertising seminar coming up September 18th. It’s at the BVCC office or virtual, so well worth the $49 for chamber members, or $69 for non-members. And it will be recorded for you.

Custom Audience

You can upload your own customer email list to Facebook and your list will be compared to their database. A custom audience is created, unique to your account, to reach out to those same people on Facebook. So you can target them both in your email and on Facebook. It’s said to take 12-16 touchpoints for a person to take action.

When I uploaded my FBSmarty email list, Facebook was able to get an 80% match. That’s more than I anticipated!

Similar or Lookalike Audience

Taking that custom audience you just created, you can now have Facebook create a Similar audience so you can reach a whole new batch of people with the same personality, activities, locations, etc. as your list!

similaraudience500

Partner Categories

This is where we can target databases of partners outside of Facebook and combine that with our Custom or Lookalike audiences. As an example, what if you wanted to target farmers, or management, or homemakers? That’s one of hundreds of options.

partner-1

How about targeting Purchase Propensity. Here’s their data on people likely to buy a new vehicle!

purchasepropensity

These are features that used to be available only for big money advertisers. Facebook has made this available to all of us.

What Kind of Budget do I Need?

There really is no minimum or maximum. You can set it for a day or a lifetime campaign budget.

As an example of a campaign I am running right now, we are spending $10 a day until October 20th for our CommunicateFullCircle course being offered. And here is a picture of the demographics we have chosen for this targeted campaign. These will change frequently during the campaign but we are starting with this.

demoforonead

Boosting

You can also choose to simply click on the Boost button on your Facebook page under a post. That option allows you to increase the reach of that post significantly but it is not as powerful as choosing your criteria in the ‘back-end’.

For more information on Social Media Techniques, sign up for our newsletter. We send out tips every week. Easy to absorb tips for your small business.

Michelle Fontaine
FBSmarty and Social Media by Michelle

Creating Art from the Beauty of the Valley – Guest Post from Alternatives

Artist Linda Sinacola

Artist Linda Sinacola

We all know just how beautiful the Blackstone Valley is – particularly in the fall. Well, from September 27-29 the gorgeous scenery that we sometimes take for granted will be inspiring the twenty renowned painters who will be participating in Alternatives’ premiere Blackstone Valley Plein Air Arts Festival. The artists will be competing for cash prizes and their work will be judged by noted artist and author, Charles Movalli.

“Plein Air” means open air, especially daylight in the outdoors, and the artists will be painting at various locations throughout the area. Maps will be available showing the sites where the painters are most likely to be, giving the public the chance to “look over the shoulders” of some really remarkable talented artists at work. What a great opportunity for the budding artists, or just art enthusiasts, among us.

Artist Michael Graves

Artist Michael Graves

In addition to the main contest, there will also be a “Quick Draw Contest” at Riverbend Farm in which the artists will only have 3 hours to complete a plein air painting on site. Talk about pressure!!

The three day extravaganza will culminate with a reception and fundraising auction of the works created at Alternatives’ Whitin Mill (50 Douglas Road in Whitinsville) beginning at 6:00 PM on September 29. A portion of the proceeds will benefit Alternatives’ programs for individuals with psychiatric disabilities.

For more information, including a list of the participating artists and examples of their work, go to www.AlternativesNet.org/events/plein-air or call Tom Saupe at 508-234-6520.

Artist Gerard Blouin

Artist Gerard Blouin

We are really excited about this Festival and can’t wait to have all of this creative energy gathered together in the Valley. Please mark your calendars. We’d love to see you there.

The Festival is being hosted by Alternatives and ValleyCAST. But we couldn’t have done it without our terrific sponsors: Emerson Investment Management and the Worcester Telegram & Gazette. A very heartfelt thank you.

Karen Goldenberg
Director of Marketing and Development, Alternatives
50 Douglas Road, Whitinsville, MA 01588
508-266-6544

Alternatives is a non-profit human services agency currently serving over 2000 adults with developmental and psychiatric disabilities in 55 residential, employment and day programs throughout Central Massachusetts. For more information about Alternatives please visit our website at www.alternativesnet.org or call us at (508) 234-6232.