Wednesday, November 21, 2007

Local IT industry up in arms over new taxes

As of Monday morning, legislators agreed to levy a 6% tax rate on “computer support services, data center support, custom programming, consulting and disaster recovery services.”

I know, that’s not news to you.

What is, is this: the state’s IT industry (along with small local businesses and workers) is angrily asking, “What gives?”

After all, “The IT industry is ... helping to maintain the competitiveness of Maryland’s businesses.” So says Roger Cochetti, a director at the Computing Technology Industry Association.

Roger keeps going, telling InformationWeek:

"Just at the time that most cities, states, provinces, and countries around the world are encouraging the computer industry to locate there, the Maryland Assembly and Governor chose to discourage the computer industry from locating and providing services in the 'Free State," he said.

Cochetti said the tax could encourage Maryland IT users to outsource computer services.... He called the move one of the "least informed and most harmful actions ever undertaken by the Maryland State government."

Do you think that more companies will keep IT in-house to avoid paying these taxes to local outside vendors? Or outsource operations? Would you?

-JACKIE SAUTER, Multimedia Editor


Jerry said...

The friends I have who freelance as programmers (living in New England or Oregon) either already have marketing plans to market to specific sectors in Maryland, or are in the process of creating them. That includes mass mailings, emails, phone calls, and new marketing pages specifically discussing the cost savings to be had by outsourcing.

They want to thank you for the work!

Anonymous said...

The local industry could have probably prevented the tax if the many companies were an organized unit with a lobbyist or lobbyists monitoring bills that would affect them. My guess would be that the other groups that were potentially affected had lobbyists on hand to influence the legislature.

Is that the way it should be? No. Is that the reality? Seems to be.