The General Assembly session will end in less than two weeks, on April 7.
Call your legislators today. Urge them to repeal the tech tax:
The News-Journal, a major daily paper in Wilmington, Delaware, examined the impact of Maryland's tech tax in a story in Sunday's edition entitled, "Md. sales tax could make Del. a refuge." The story begins:
"Maryland can be a nice place to live. But for some businesses, Delaware's looking better all the time.
"Lawmakers' efforts to impose a new sales tax on the computer services industry may have permanently tarnished Maryland's reputation among some small-business owners there, raising the possibility that they will simply pack up and relocate across the border."
Read the full story here.
An editorial in today's Wall Street Journal calls Maryland's tech tax "one of the most burdensome regimes in the nation on the growing industry."
The editorial goes to outline how the tech tax will harm the small businesses that drive Maryland's economy, "While larger companies may simply move their IT operations to other states, small businesses will lose money on tighter margins, or watch clients bring their IT services in-house."
Read the full editorial here.
The office of the Comptroller has released draft regulations and a frequently asked questions document regarding the computer services sales tax set to take effect on July 1. View them here.
We'll post more updates after we take a better look at them.
Here are a few YouTube videos from yesterday's rally. I found them via the Tech Council of MD's Twitter stream.
Tech Council CEO Julie Coons:
Chuck Kramer, CTO, Social & Scientific Systems:
David Eisner, President and CEO of Dataprise:
Whiteford, Taylor & Preston LLP and Watkins, Meegan, Drury & Company LLC will host a lively discussion about the tech tax and its implications at 3:30 p.m. on March 11 at 7 Saint Paul Street in Baltimore, 19th floor.
The event will be moderated by Heather A. James, Esq., chair of WTP's Government Contracts Section, and will feature remarks by Herman B. Rosenthal, Esq., chair of WTP's Tax Section; Tom Loveland, CEO of Mind Over Machines and president of the Maryland Computer Services Association; Michael T. Dillon, Esq., director of State and Local Tax for Watkins, Meegan, Drury & Company LLC, and a member of Fight the Tech Tax; and Karen T. Syrylo, CPA, the Maryland Chamber of Commerce's State Taxation Consultant.
An informal Q&A session will follow the presentations and the event will conclude with a networking reception. Over 100 individuals from the technology, corporate, and banking sector are expected to attend. RSVP to dhill@wtplaw.com.
Topics to be discussed include:
Hundreds of business people gathered in Annapolis yesterday to advocate the repeal of the computer services sales tax, which will take effect July 1.
"I think this is wonderful," Senate Deputy Majority Leader Rob Garagiola (D-Dist. 15) said. "I'm shocked, actually, by how many people are here."
A capacity crowd filled the Maryland Inn for a media briefing, where a group of business people outlined how the tax will impact Maryland businesses and the state's economy.
"Martek Biosciences is a $300 million biotech company in the State of Maryland. When we invest in information technology, we do it to improve our efficiency, to improve our effectiveness, and we do it to improve our competitiveness on a global landscape," said David Ronis, Martek's Chief Information Officer. "We have operations in four states around the country. I don't think legislators realize just how easy it is to relocate outside of the state."
"We have about 200 employees in Maryland in our Montgomery County office. We also have offices in California, Washington State, and we're about to open an office in Northern Virginia," said Gail Bassin, Chair of the Board/Treasurer of JBS International. "This use tax on IT services will definitely harm our business in Maryland."
Larry Letow, President and COO of Convergence Technology Consulting voiced his concern over the impact the tech tax will have on emerging technology companies. "The tech community is largely based on companies that started small and grew. We need IT companies, especially small businesses, to focus on growth, not to focus on survival."
Business people in attendance were also joined by a bi-partisan group of legislators, who vowed to work together to repeal the computer services sales tax.
"Legislators are going to have to find the courage to do the right thing here and repeal this tax, which never should have been implemented to begin with," said Del. Jeannie Haddaway (R-Dist. 37B). "We realize how important it is to your businesses. We realize the affect it's going to have on small businesses."
Lawmakers also urged business people to keep the pressure on their lawmakers. "I'm convinced that this type of event is the only type of activity that will convince the legislature and the executive branch to repeal this tax, House Minority Leader Del. Tony O'Donnell said. "We need you to continue to pump up the volume and continue to put the pressure on. We need your letters, your emails and your calls."
"You all need to keep the pressure on. How is it impacting your businesses? Are you making alternative plans of moving if this goes into effect? That's the kind of message that needs to be told to our legislators," Sen. Garagiola said. "I think it will resonate. I am hopeful that we will get a bill to the governor's desk. I'm committed to working hard to make sure that happens. You can count on my support. We're going to make it happen, but it's going to take your help and your support."
Help us keep the pressure on. If you haven't already contacted your legislators, please contact them today. You can also help by spreading the word to your colleagues and employees.
Photo: Sen. Rob Garagiola addresses the crowd during Save Maryland IT Day on Feb. 27. He is surrounded by legislators who support the repeal of the tech tax, including (L to R) Del. Shane Pendergrass (D-Dist. 13), Del. Donna Stifler (R-Dist. 35A), Del. Jeannie Haddaway (R-Dist. 37B), Del. Tony O'Donnell (R-Dist. 29C), and Del. J.B. Jennings (R. Dist. 7)
In a letter to the editor in today's Baltimore Business Journal (Feb. 22), Steve DelBianco, former director of the Virginia Economic Development Partnership, extends his thanks to the State of Maryland for passing the computer services sales tax.
"This proposed tax on computer services in Maryland makes it that much easier for Northern Virginia to compete with Maryland for any business that relies heavily on computer services, including financial services, health care and government contracting," he said.
DelBianco closes his letter by saying, "Let me extend my thanks to Maryland for giving a new advantage to the Old Dominion."
Read the full letter here.
As illustrated by reports in today's Baltimore Sun and last week's Baltimore Business Journal, competing states smell blood. Many Maryland IT companies have put expansion plans on hold. Some have already shifted expansion plans to other states. Many others have a list of unanswered questions about how the tax will be applied.
Barry Rascovar discusses the tech tax in his column, "Killing the golden goose," in today's Gazette of Politics and Business.
"If left unaddressed during the current legislative session, the damage done to this sector of the Maryland economy could be immense. The damage done to Maryland's business image will be long lasting."
To read the complete column, click here.
From today's Baltimore Sun editorial, "Paying For BRAC:"
"Meanwhile, if Maryland wants to offer a tax break to military contractors, the one on the top of the list should be to scrap the 6 percent computer services tax on businesses of all kinds. As it stands, the tax offers a significant incentive for firms serving Aberdeen Providing Ground (at least those with a substantial investment in computers) to locate in nearby Delaware or Pennsylvania."
Read the full editorial here.
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