House Republicans Propose Repealing Tax On Computer Services

The efforts to repeal the sales tax application on computer services have numerous co-sponsors, including a handful of Democrats. The press release reads as follows:

Media Release

January 30, 2008

Contact: Carrie Simons-Sparrow, 410-841-3401
Shannon Oxley, 410-841-3401

House Republicans Present Alternatives to Computer Services Tax

Annapolis – House Republicans today outlined a plan to repeal the expansion of the sales and use tax to computer services. The Republican proposal does not require replacement with revenues from other taxes nor does it require shifting the tax burden to local government.

“The expansion of the sales and use tax to computer services was one of the more egregious examples of the get-it-done-quick attitude that permeated the Special Session”, said Minority Leader Anthony J. O’Donnell. “It was pushed through in the dark of night, without any public input. The citizens most impacted were never given the opportunity to voice their concerns”.

The sales and use tax was expanded to include computer services during the Special Session in November and is set to go into effect July 1. There are several bills aimed at repealing the tax including HB 187, HB 253, and HB 326.

“Over the last several weeks there have been several other taxes floated as alternatives to the computer services tax”, said Minority Whip Christopher B. Shank. “These have included everything from an increase in the alcohol tax to an increase in the gasoline tax. We are confident that the computer service tax can be responsibly repealed without backfilling with additional taxes.”

The Department of Legislative Services (DLS) has estimated $200 million in revenues from the sales tax expansion. Members of the House Republican Caucus worked with DLS budget analysts to identify $203 million in spending reductions.

“Maryland continues to have a spending problem rather than a revenue problem and this was not remedied during the Special Session”, said Delegate Gail Bates, the Ranking Republican on the House Appropriations Committee and the lead sponsor on HB 187. “Reasonable spending reductions can completely negate the need for the computer services tax.”

“The computer services tax sends the wrong message at a time when we are trying to promote Maryland as a leader in the knowledge-based economy”, said Assistant Minority Whip Jeannie Haddaway, the lead sponsor on HB 326. “These are high paying jobs in a clean industry that is not confined by geographic borders. Their business can be conducted from anywhere in the world and we simply cannot afford to lose them.”