Maryland’s tech advocates breathed a collective sigh of relief as the House of Delegates on April 5 officially killed the 6 percent sales tax on computer services that the General Assembly had hastily enacted during last November’s special session.
The House passed legislation to repeal the tax, Senate Bill 46, without amendments by a vote of 93-44. The Senate had passed the repeal bill on March 31 by a vote of 30-7.
Governor Martin O’Malley signed the repeal into law on April 8. The computer services tax would have taken effect on July 1.
The Greater Baltimore Committee and a number of its members were active participants in a campaign by many business advocates for the tax’s repeal — all of whom warned lawmakers that the tax would cripple Maryland’s IT industry and cost the state jobs.
The GBC hosted a news conference prior to General Assembly hearings, launched a web ad campaign, created a Web site, issued radio commentary, and employed other electronic communication tactics to convince lawmakers that they had made a mistake in November when they passed the tax.
While supporting the tax’s repeal, GBC president and CEO Donald C. Fry was, nevertheless, critical of lawmakers’ decision to take $50 million annually from the state’s Transportation Trust Fund for the next five years as part of its plan to compensate the General Fund for revenue they think will be lost by not having the computer services tax.
“We need to remember that every dollar siphoned from the Transportation Trust Fund adds to the congestion and pollution problems of the state. In the Baltimore area alone, drivers spend almost 60 million hours annually sitting in traffic. This wastes 40 million gallons of fuel each year, raising the total cost of congestion to more than $1 billion a year,” Fry said. “For a state that has articulated its vision of becoming increasingly environmentally sensitive, making a decision that would directly increase congestion is totally inconsistent.”
“The Transportation Trust Fund is not the state’s cookie jar where we store our extra cash,” he said, vowing that the GBC “will continue to advocate for stronger funding for roads, transit, port and airport facilities in the state.”