I got this from a member of the Maryland Tech Council, which is
opposed to the recently voted 6% computer tax. Am passing it on for
those who are affected, and still want to make an effort to get the
tax repealed.
/gayley
--
--
Gayley Knight
Mother Geek Productions <MotherGeek.com>
By, For & About Women Radio <bfawomenRadio.com>
Join the conversation at http://businessherway.blogspot.com/
American Women in Radio and Television-NCAC, Board
Business and Professional Women/MC, Board
National Assn. of Women Business Owners-Nation's Capital Chapter, Board
-------- Original Message --------
Subject: TCM Member Alert -- Opposition to the Six Percent Sales
Tax on Computer Services in Maryland
Date: Wed, 28 Nov 2007 16:01:40 -0500
*** TECH COUNCIL OF MARYLAND MEMBER ALERT ***
*Opposition to the Six Percent Sales Tax on Computer Services in
Maryland*
* *
The following is the Tech Council of Maryland’s Legislative Member Alert
regarding the Computer Services Sales Tax. If you would like to read
our press release on this issue, please click here
<http://www.techcouncilmd.com/press11_28_07.htm>.
*_What is the Tech Council of Maryland’s position?_*
The Tech Council of Maryland (TCM) strongly opposes the sales tax on
computer services that passed during the 2007 special session of the
Maryland General Assembly with no hearings, no notice and no opportunity
for public comment. Repeal of this tax is a top TCM policy priority.
***_What computer services are taxed?_*
During the 2007 special session, the Maryland General Assembly passed SB
3 – /Tax Reform Act of 2007/. This bill extends the 6% sales tax to
computer services including computer facilities management and
operation, custom computer programming, computer system planning and
design that integrate computer hardware, software and communication
technologies, computer disaster recovery and data processing, storage
and recovery as well as hardware or software installation or maintenance
and repair. This provision is effective July 1, 2008 and sunsets June
30, 2013.
*_Whom can I contact to express my opposition to this tax?_*
TCM recommends that you contact members of the Maryland General Assembly
who represent where you live and work. Senators and Delegates need to
hear from the people who are impacted by a sales tax on computer
services. Let them know that you oppose this tax and urge them to fight
for its repeal. To find out who represents you in the Maryland General
Assembly, go to http://mdelect.net <http://mdelect.net/> or contact
Brian Levine, TCM’s Director of Government Relations, at 240-243-4044 or
[EMAIL PROTECTED] <mailto:[EMAIL PROTECTED]>.
*_What are some talking points?_*
· This tax makes Maryland’s business climate and tax structure
less competitive than that of surrounding states.
· This tax is extremely confusing for Maryland businesses and
has proven to be legally problematic, causing a litany of lawsuits in
Connecticut, the only state with a computer services tax.
· This tax was passed in virtual secrecy with no deliberation or
opportunity for testimony. Such a massive change in tax law should be
carefully debated in public hearings and opportunities for comment and
education.
· This tax harms Maryland’s economic development goals to create
and maintain a high-tech knowledge economy.
· Virtually no services are taxed in Maryland except for
computer services. That is poor and illogical tax policy.
· This tax is particularly burdensome for small companies that
do not utilize in-house computer services.
* Purchasers of information technology services may find that
in-house IT and buying out-of-state become attractive options, as
well as cutting money out of other projects.
* Companies will struggle with the decision to charge their
customers with sales tax, thus being uncompetitive with
out-of-state businesses, or to lose significant profits as they
absorb the cost of the tax for their clients.
_Do other states tax computer services?_
* Connecticut is the only other state that has a sales tax on
computer services, but their tax is 1% while Maryland’s is 6%.
There are lawsuits against the tax pending in Connecticut.
* In the past, three other states - Florida, Pennsylvania and Texas
- applied the sales tax to computer services, but each state
later
repealed the tax.
* Florida repealed its services tax after only three months.
* Pennsylvania repealed their computer services tax because they
found it unworkable and extremely difficult to administer.
_What does the actual language of SB 3 say?_
Article – Tax – General (11–101.)
“Computer service” includes:
(i) computer facilities management and operation;
(ii) custom computer programming;
(iii) computer system planning and design that integrate computer
hardware, software, and communication technologies;
(iv) computer disaster recovery;
(v) data processing, storage, and recovery;
(vi) hardware or software installation, maintenance, and repair.
“Computer service” does not include:
(i) Internet access, as defined in the federal Internet Tax Freedom Act;
(ii) typing or data entry on word processing equipment;
(iii) computer training;
(iv) the installation, maintenance, or repair of tangible personal
property other than computer hardware or software that includes
computer hardware or software as a component part;
(v) a service otherwise described in paragraph (1) of this
subsection that is provided as part of or in connection with:
1. Electronic fund transfers, financial transactions, automated
teller machine transactions, or other banking or trust services;
2. Business management, account management, personnel, payroll,
employee benefit, or other administrative services;
3. Educational, legal, accounting, architectural, actuarial,
medical, medical diagnostic, or other professional services; or
4. Telecommunications services.
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