FIGHT THE MARYLAND TECH TAX

Maryland IT Companies are in the fight of their life... This tax could force companies out of the state or seriously effect their survival...

Maryland’s Computer Services Tax www.fightthetechtax.com
Tech Council of Maryland leading the fight to repeal

During the November 2007 special session the Maryland General Assembly enacted legislation to expand the state’s sales tax to computer services. Effective July 1, 2008, Maryland’s 6 percent sales tax will apply to computer services, including:

Computer facilities management and operation; Custom programming; Computer system planning and design that integrate computer hardware, software, and communication technologies; Computer disaster recovery; Data processing, storage and recovery; and Hardware or software installation, maintenance, and repair.

To view enacted language, click here.

This new law hurts businesses of all sizes and industries throughout the state. It creates a business climate and tax structure for Maryland businesses that is less competitive with other states. Only a handful of other states tax computer services. The technology industry is part of the economy that Maryland should be trying to grow, not discourage. Click here to learn what you can do to help us repeal the computer services sales tax.

Talking Points
Maryland spends millions of dollars annually to attract and expand technology companies. Computer service companies employ 68,000 Marylanders, with an annual payroll of $5.2 billion, paying wages nearly twice the statewide average. Imposing a sales tax on these activities will jeopardize these jobs.

Taxing computer services makes Maryland's business climate and tax structure less competitive with other states, including Virginia. Only a handful of other states tax computer services.
Maryland businesses will pay the majority of this $200 million computer services sales tax. The recent special session resulted in more than $800 million in new business taxes.
Expanding the sales tax to computer services hurts small and growing companies. Large companies hire employees to perform many of the services outlined in the bill. Small businesses are more likely to hire outside companies to perform these services, and, therefore, would be more likely to pay the proposed sales tax.

Maryland-based companies with multi-year computer support contracts will have to bear an unanticipated 6 percent reduction in revenues.

This new tax on computer services could jeopardize BRAC jobs that would have relocated to Maryland. Maryland-based subcontractors will face a 6 percent price disadvantage when bidding to participate on federal contracts.

There is a reason most states do not attempt to impose a sales tax on services. It is very difficult to administer. Applying the sales tax to computer services is confusing for Maryland businesses and has proven to be legally problematic in states with similar laws.