Below is a copy of the letter we wrote to local Chamber of Commerce members in regards to the sales tax on computer services in Maryland:
In a November special session, the General Assembly approved raising the state sales tax from 5 percent to 6 percent and expanded it to cover computer services including data storage, disaster recovery, hardware and software installation and technical support. If not repealed, this tax will take effect in July and will put many Maryland businesses at a severe disadvantage. Not only will this harm Maryland’s burgeoning technology sector, but it will have an effect on all businesses that rely on these services, most likely creating inflation by driving up prices down the line.
Many small businesses will be unable to absorb the 6 percent tax and will use fewer services. This will ultimately hurt these businesses when they are unable to compete with companies from out of state who can still afford to properly maintain their technology infrastructures. Larger companies will be able to stop contracting for certain computer services and instead perform the work in-house. Companies with locations in other areas will avoid the tax entirely by having their non-Maryland offices hire non-Maryland vendors, or worse yet, close their Maryland locations. These actions will decrease demand for in-state computer services providers and send higher-paying technology jobs to other states, or even other countries.
By taxing technology services the state of Maryland is one step closer to taxing all services. I urge each and every one of you contact your legislators and let them know how you feel about this important matter. If you are unsure of who to contact or what to write you can visit http://www.fightthetechtax.com and click on the “Take Action” link. Here you will find a sample letter to email, and a link to a website where you can find out who your elected officials are.
I thank you in advance for your support in this matter.
Sincerely,
Chris Isham, Account Manager
MainBrain