Five Reasons to Repeal the Tech Tax
Our coalition is seeking to repeal the computer services sales tax because:
The Tax Stifles Economic Development and Job Creation: Maryland spends millions of dollars annually to attract and expand technology companies and jobs. 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 and harm Maryland's economic development goal of maintaining a high-tech knowledge economy and workforce. The tax has already caused companies to cancel planned expansions.
The Tax Damages Maryland's Competitiveness: Only a handful of states tax computer services. Enacting this tax would make Maryland's business climate and tax structure uncompetitive with other states. Maryland companies will source their computer services acquisitions to other states or relocate in order to stay competitive.
The Tax Hurts Small and Growing Companies: This new tax will especially harm small businesses that consume and provide computer services. While many large companies hire employees to perform the services taxed by the new law, most small businesses hire outside service providers. In addition, many of Maryland's computer services providers are themselves small businesses – often women and minority-owned – with relatively small profit margins.
The Tax Harms Important Growth Industries: Industry sectors important to Maryland's economy, like bioscience, financial services, health care, higher education, and government contracting, rely on technology services to drive innovation and stay competitive in a global marketplace. The tax will divert BRAC contractors to non-Maryland locations.
The Tax Will Be an Administrative Nightmare: Applying the sales tax to computer services will cause confusion for Maryland businesses and tax administrators. The tax has proven to be difficult to administer in states that have passed similar laws. That's why several states have repealed the tax.
Download our Five Reasons Flyer here (pdf)
Another major reason we should oppose this tax is that: Indirectly small businesses are forced to out source their work and inturn we will lose jobs in maryland.
