GBC panel urges key Assembly committees to repeal computer services tax

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Donald Fry (left); Larry Fiorino; Drew Krimski testify before Senate Budget & Taxation CommitteeGreater Baltimore Committee president and CEO Donald C. Fry and CEOs from two GBC-member IT firms March 12 told members of the House Ways and Means Committee and the Senate Budget and Taxation Committee that a pending 6 percent sales tax on computer services will cripple Maryland’s IT industry and cost the state jobs.

Joining Fry to testify in support of bills that would repeal the computer services tax were GBC board member Drew Krimski, president and CEO of The ACI Group, and Larry Fiorino, president and CEO of G.1440. 

In hearings before standing-room audiences of IT executives and employees, both CEOs told lawmakers that IT businesses operate on narrow profit margins and that they would not be able to absorb the new tax.  Nor would their customers absorb the tax.  Instead, customers would take their business to other more competitive firms elsewhere, the CEOs said.

As a result, many Maryland-based IT firms would move to neighboring states and IT jobs would be lost in the process, they said.

“With the click of a mouse, the contracts we work on will leave this state,” said Fiorino. “If the work leaves Maryland, the workers will leave Maryland.”

“When a state tax threatens to take away half of my profits, I can take my business to another state and service my customers very easily,” Krimski said.

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