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Maryland To Tax Custom Programming and Computer Services

mcwop writes "Early this morning Maryland passed legislation to apply a new 6% sales tax to 'custom computer programming' and other computer- and hardware-related services. Computer industry groups lobbied hard against the measure to no avail. Purchasers of IT services may find that in-house IT and buying out-of-state become attractive options, as well as cutting money out of other projects."

395 comments

  1. buying out of state isn't an option by Anonymous Coward · · Score: 3, Informative

    since companies have to pay a use tax for those cases

    1. Re:buying out of state isn't an option by superwiz · · Score: 3, Interesting

      Funny how you said "cases". A friend of mine recently avoided most of the tariff for a computer he sent to Germany by declaring it as a computer "case". Yes, I know you meant something else. I am just wondering... what pun?

      --
      Any guest worker system is indistinguishable from indentured servitude.
    2. Re:buying out of state isn't an option by nurb432 · · Score: 3, Informative

      But moving out of state is an option.

      --
      ---- Booth was a patriot ----
    3. Re:buying out of state isn't an option by RareButSeriousSideEf · · Score: 2, Interesting

      I recently bid 5% over my nearest competitor on a somewhat lucrative project (by my standards) for a Maryland client. The competitor happened to be in-state for the client. I'm not in MD, and the (extremely price-sensitive) deal with the competitor isn't yet inked. I'll be giving them a follow-up call in the morning.

      Thank you, Maryland legislature! And to all you other MD-based purchasers of "custom computer programming," I'm as custom as you can get, I have good references, and I come with a built-in 6% discount. Hurry, availability is limited. ;-)

    4. Re:buying out of state isn't an option by RareButSeriousSideEf · · Score: 1

      Perhaps they have to pay a use tax for Custom Software. But if I write custom software for an IL distributor who "shrinkwraps" it for resale, then a MD firm can buy it out-of-state just like any other out-of-state software purchase. The fact that it's an obscure SKU never purchased by anyone else is no business of the State of Maryland as far as the IL distributor is concerned.

    5. Re:buying out of state isn't an option by petard · · Score: 1

      That would already require payment of the sales tax if purchased in state or the use tax if purchased out of state. The sales tax is being raised to 6% too. The big change is that many services (the main one of interest to the /. crowd being this one) are now being taxed as if they were goods for sale. So all you'd be doing is introducing extra effort for the same tax treatment.

      --
      .sig: file not found
    6. Re:buying out of state isn't an option by RareButSeriousSideEf · · Score: 1

      If time travel were a reality, I would go back & work my arse off to become a "founding father" just so I could enshrine a right to tax-evasion in the constitution. Any tax-paying entity, whether person or (shriek) corporation, would have a constitutional right to 75% of their earned income, period. It would be the problem of the overlapping taxing entities to sort out how the 25% was split up; once any income-earning entity could show that 25% was consumed by tax burden, they'd be consitutionally protected from any further government action against them -- city, county, state or federal -- as far as tax-evasion was concerned.

      But what do I know?

      Anyway, how well-defined are the "many services"? Well enough that the /. crowd can't find a workable shell under which to move the pea? (Why yes, that *is* a challenge, to be met by /.ers and defended against by asshat-sympathizing lawyers.) ;=)

    7. Re:buying out of state isn't an option by petard · · Score: 1

      I am intrigued by your ideas and would like to subscribe to your newsletter...

      Anyway, how well-defined are the "many services"? Well enough that the /. crowd can't find a workable shell under which to move the pea? (Why yes, that *is* a challenge, to be met by /.ers and defended against by asshat-sympathizing lawyers.) ;=)

      Actually, I need to correct myself. I just caught the late news (the situation has been changing rapidly up until about 4 hours before the law was signed) and it seems that computer services and real estate transfers were the only newly taxable services that got left in the final package. I'm not a Maryland resident, but live nearby and have been hearing a ton about this on the radio during my commutes. IT Operations, custom programming, systems integration, support services, disaster recovery services, hardware/software installation and computer repair all made it in. Landscaping, car washes, arcades, banking services, and management consulting all had better lobbies and got removed at the eleventh hour. Those were on the table when I heard the report yesterday. Perhaps an enterprising /.er could cast their computer services as simple tools of a management consulting business and get through that way? Or maybe server management software could qualify as an arcade by requiring you to defeat a boss every time you want to view a log?

      --
      .sig: file not found
    8. Re:buying out of state isn't an option by Quietlife2k · · Score: 1

      As I read it, the simplest way to avoid this tax is : 1) Switch to an open source license. 2) Do not charge for the code. 3) Charge only the time and effort in installation and configuration. 4) Profit ! All in all this may be cheaper than relocating for some companies.

    9. Re:buying out of state isn't an option by Anonymous Coward · · Score: 0

      As a former resident of Prince George's County, I'm glad I took this option.

    10. Re:buying out of state isn't an option by Red+Flayer · · Score: 2, Interesting

      Thank you, Maryland legislature! And to all you other MD-based purchasers of "custom computer programming," I'm as custom as you can get, I have good references, and I come with a built-in 6% discount.
      No you don't. They'll still need to pay Sales & Use tax on that; the difference being that they need to remit the tax themselves, rather than you billing them for it and remitting the tax.
      --
      "Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
    11. Re:buying out of state isn't an option by RingDev · · Score: 1

      And what's to stop them from creating new charges that are "non-taxes" to get around the 25% taxation issue? They could just claim that Social Security and Medicare/Medicaid contributions are non-tax contributions as well, and continue to tack on more 'non-tax' charges. But if you quash those, you'll have to be careful to avoid blocking State mandated child support, tax debt repayment, etc...

      I think it's a good idea, but it could use some beefing up, and with todays tax exemptions it could be somewhat easy to scam by dropping your taxable income low enough that the 25% is in no way representative of your actual gains.

      -Rick

      --
      "Most people in the U.S. wouldn't know they live in a tyrannical state if it walked up and grabbed their junk." - MyFirs
    12. Re:buying out of state isn't an option by ultranova · · Score: 1

      If time travel were a reality, I would go back & work my arse off to become a "founding father" just so I could enshrine a right to tax-evasion in the constitution. Any tax-paying entity, whether person or (shriek) corporation, would have a constitutional right to 75% of their earned income, period.

      All this would accomplish would be for the Congress to split hairs over the word "earn": sure, someone might have paid you some sum, but did you actually deserve to get it ? Oh, and your personal finances - including taxation and how much you have left afterwards - affect your ability to buy things from outside of your home state, therefore affect the interstate commerce, therefore are within the power of the Congress to decide.

      No matter what you wrote to the Constitution, in the end it is just a piece of paper, and can be worked around. Constitutional clauses are about as effective in the political realm as disabling right click with Javascript is on the Web.

      --

      Forget magic. Any technology distinguishable from divine power is insufficiently advanced.

    13. Re:buying out of state isn't an option by The+FNP · · Score: 1
      Buying out of state isn't an option, because the services will still have been performed _in the state_. That means that my PC repair company here in NC would have to charge this tax if we did work in MD(TWO STATES AWAY!)

      As the Parent says: Buying out of state isn't an option

      since companies have to pay a use tax for those cases
      The use tax would apply to the custom software development, and the local tax would apply to any out-of-state IT services vendors.
    14. Re:buying out of state isn't an option by RareButSeriousSideEf · · Score: 1

      Constitutional clauses are about as effective in the political realm as disabling right click with Javascript is on the Web.
      That metaphor is as sad as it is apt.
    15. Re:buying out of state isn't an option by ahodgson · · Score: 2, Interesting

      The founding fathers were willing to go to war over something like a 1% tax. They lived in an age where it would be impossible to imagine paying 25% taxes, let alone the 60% that is now common in the OECD. Virtually no one had that much surplus wealth; only the exploitation of free energy on a large scale, in the form of fossil fuels, enable that sort of excess now.

    16. Re:buying out of state isn't an option by Anonymous Coward · · Score: 0

      Rent office space across the border in Delaware and incorporate there. Since MBNA got bought out by BoA and has downsized... It'll be cheap.

      Easy corporate laws and No sales tax. :)

    17. Re:buying out of state isn't an option by mikael · · Score: 1

      Here's another article

      The tax, which political leaders said would net about $200 million annually, will apply to businesses that offer facilities management, custom computer programming, system integration, installation and maintenance. But it will not cover Internet access, computer training and telecommunications.


      So as long as some component of your project involves long-distance training over the Internet, you can rebrand your business product.

      --
      Vintage computer adverts: http://www.vintageadbrowser.com/computers-and-software-ads
  2. So... by jacobcaz · · Score: 4, Insightful

    So, no more development companies opening up in Maryland then? Smart move MD!

    1. Re:So... by Anonymous Coward · · Score: 0

      Out of state companies will probably be taxed for goods and services that they provide to companies and individuals doing business in MD.

    2. Re:So... by PocketPick · · Score: 4, Insightful

      This isn't an attack on a software or hardware end-product (those were already taxed at the point of sale). What it says is that computer services - PC repair, network consulting, customer support phone charges, etc... will be taxed like other services and products.

      And why should we be suprised by this?. The last time I took my car in for repair, I paid sales tax on part and labor. When I have my car parked Valet, taxes are factored into the the cost. And when UPS delivers a package for me, I pay tax on that too.

      Yeah taxes suck, but I'm more suprised to learn that it wasn't taxed for all these years, rather than that it's taxed now.

    3. Re:So... by Stamen · · Score: 4, Informative

      You payed "sales tax" on labor? Serious question, and perhaps that's how it works in your state. But in my state (CA), if you only provide services, without selling any product, you don't even have to get a seller's permit, as there is no taxes on services. I know because my company only provides services and no products.

    4. Re:So... by merreborn · · Score: 5, Informative

      And why should we be suprised by this?. The last time I took my car in for repair, I paid sales tax on part and labor. When I have my car parked Valet, taxes are factored into the the cost. And when UPS delivers a package for me, I pay tax on that too.


      In California, repair and installation labor is non-taxable.

      Point being, some labor is untaxed in some parts of the country, so this development may come as a surprise to some of us.
    5. Re:So... by nick_davison · · Score: 4, Insightful

      More likely...

      A mailbox is going to get opened in Delaware and a cell phone registered to that address, while everything else remains exactly where it always way.

      Why do you think just about every credit card and predatory lending scheme seems to get mailed to you from Delaware? Because they've figure out it's a great business model to take half the amount of tax on all of everyone else's dubious business whilst not having to support anything more than the name-only corporate HQs.

    6. Re:So... by PocketPick · · Score: 1

      Interesting...did not no that. In the state I'm from, typically sales taxes bis applied to any service where the goods provided has a sales tax. There are other services which are also subject to tax (it varies).

    7. Re:So... by letxa2000 · · Score: 1

      No taxes on services/labor in Colorado, either.

    8. Re:So... by Anonymous Coward · · Score: 0

      No, the proposal is that computer repairs, consulting, etc will be taxed *unlike* other services which are not currently taxed in maryland.

    9. Re:So... by jcr · · Score: 2, Insightful

      So, no new IT companies in Maryland, and out-of-state vendors will prefer to work for clients who aren't in Maryland.

      Yeah, the legislators have really screwed the pooch here.

      -jcr

      --
      The only title of honor that a tyrant can grant is "Enemy of the State."
    10. Re:So... by UncleTogie · · Score: 1

      Out of state companies will probably be taxed for goods and services that they provide to companies and individuals doing business in MD.

      How? AFAIA, your sales tax is reported to the state and then collected in-state. What legal authority does Maryland have over the denizens of another state?

      None from what I can tell, but then again I'm definitely not lawyer-shaped.

      --
      Don't tell me to get a life. I'm a gamer; I have LOTS of lives!
    11. Re:So... by trolltalk.com · · Score: 1

      "In California, repair and installation labor is non-taxable."

      It will probably be taxed sometime next year or the year after. The alternative is California having its' credit rating downgraded, because of the huge (10 billion bucks) shortfall in taxation revenue, which is likely to grow to approximately $30 billion by 2009, as the rest of the mortgage resets, foreclosures, and reposessions work their way through the system.

    12. Re:So... by GateGuy · · Score: 4, Funny

      Maryland state motto...

      If you can dream it, we can tax it

      --
      Maryland State Motto: If you can dream it, we can tax it.
    13. Re:So... by eh2o · · Score: 1

      It's not the *only* alternative as there are lots of ways to tax things. Hopefully we won't be paying it off with a regressive tax such as sales tax, though that often seems to be the way things go...

    14. Re:So... by eh2o · · Score: 1

      So.... what state is that?

    15. Re:So... by YU+Nicks+NE+Way · · Score: 1

      Well, yes, but...the reason it isn't taxed at point of sale is because the resulting income is taxed (pretty steeply, FWIW). It's only in low income tax states (like my home state, FWIW, so I'm advocating that my own taxes be raised) that a professional services tax makes sense.

    16. Re:So... by Anonymous Coward · · Score: 0

      Correct, there is no *sales* tax on services in CA. But you do have to declare it as income come tax time. About 3% - 4% (iirc). (Still better than the fed rate of 25%-30% when you are self employed.)

    17. Re:So... by Z80xxc! · · Score: 1

      We don't have sales tax. Which is actually a bad thing - our schools, public safety, etc. could really use some more funding. (Living in Oregon)

    18. Re:So... by SMITHEE · · Score: 1

      Using the "parts and labor" analogy is useful in describing what often happens with software packages that are customized for a customer. Instead of charging, say, $5 for parts (the basic package) and $5 for labor, the software vendor charges $1 for parts and $9 for labor, thus avoiding most of the sales tax. In the case of the government customers that are common in the D.C. area, it is even worse. Many of the software packages typically sold to government agencies were originally developed in part with grant funds. Rather than risk potential fights over selling software that was developed with taxpayer money, a company can avoid that trouble and avoid all of the sales tax by saying that the software is free and the customization is $10.

    19. Re:So... by jrsumm · · Score: 1

      Mods... Mod this informative...

    20. Re:So... by yflicker · · Score: 1

      Actually, in MD, you don't pay taxes on car repair. They were debating whether to tax that, and decided against it. They were also debating whether to tax tanning salons, landscaping companies, property management companies, and they all got off the hook. So your claims are incorrect. And ditto to what the other guy said - you normally don't pay taxes on services.

    21. Re:So... by Anonymous Coward · · Score: 0

      My IT business in Utah has to charge sales tax on labor, we weren't and got audited, and had to pay back tax. Alot of my clients were shocked by the sales tax on labor.

    22. Re:So... by Anonymous Coward · · Score: 0

      Hey, thanks for signing your post. I had no idea who you were before.

    23. Re:So... by oddaddresstrap · · Score: 2, Informative

      I don't know about California, but in Washington (State), there's no sales tax on non-tangible services. However, the provider has to pay the Business and Occupation tax which, although it's usually less than the sales tax, is usually a few percent. And if you're starting a new business and don't check out the end of quarter tax forms, it can be a surprise that the state is going to take 2.5% of your gross income. It's a sales tax that is hidden from the purchaser. It would be better if the state was honest and just collected it straight up.

    24. Re:So... by trolltalk.com · · Score: 2, Interesting

      Sales taxes used to be thought of as regressive - but when you consider that, as Leona Hemsley said wrt income taxes - "taxes are for poor people", and how they have the $$$ to pay less than what would be considered "their fair share", a sales tax isn't all that regressive. After all, if they spend it, it will be taxed. When they buy a Rolex, they'll pay more tax than you will for your Timex.

    25. Re:So... by dbcad7 · · Score: 1
      Always bugged me..,
      food was non-taxable
      labor was non taxable
      but prepared food (food + labor) WAS taxable

      Now in a different state, and I am running into this scenario that makes no sense to a former Californian..
      Invoice has ..
      .....Goods
      .....Freight
      .....Tax on total of Goods + Freight (as opposed to just tax on goods)
      This makes no sense because that is a double tax.. right ?
      The supplier paid the tax on freight once (to UPS).. why am I paying it again (but higher) ?

      --
      waiting for ad.doubleclick.net
    26. Re:So... by Gumbercules!! · · Score: 1

      Ah, so you work for Duke Nukem Forever?

    27. Re:So... by Stamen · · Score: 0, Troll

      Was it that transparent?

      Now you know, we aren't trying to fix bugs or iron out gameplay, we are simply trying to avoid sales tax.

    28. Re:So... by WestCoastJTF · · Score: 1

      Exactly. In California, this might work, but on the East Coast, it's not like there aren't several other states a few minutes' drive from Maryland...

      --
      JTF: In your heart, you know we're right.
    29. Re:So... by theJML · · Score: 1

      Your first example sorta makes sense... When food is prepared, it's changed from a commodity to a product. Because it's changed and sold as a stand alone product that's been produced by a chef (even loosely using the word) it's got sales tax like any other product.

      The part that annoys me is that you'd then think that other raw commodities would carry this same privledge, but afaik none do. If I buy lumber, even in it's raw right-from-the-forest state, it has sales tax associated with it.

      Only 2 things are guaranteed, death and taxes.

      --
      -=JML=-
    30. Re:So... by alshithead · · Score: 1

      This is new for Maryland. Using the car repair scenario...labor is not taxed in Maryland, parts are. They also have other services in the queue for sales tax. They were also looking at tanning, landscaping, and video game arcades which are/were not currently taxed in the same way sales tax is applied on products.

      --
      I reserve the right to think for myself. Others' opinions are optional. Puppy on lap = typos...not illiteracy.
    31. Re:So... by eh2o · · Score: 1

      Regressive is a technical term that describes the function of individual contribution relative to total income. The other two types are progressive and flat. Sales tax is regressive. Even when rich boy buys a Rolex or a Lexus or whatever, the total tax paid relative to income is a smaller percentage compared to the other 98% of the population buying a Timex. Income tax is progressive, up to a point, and then flat.

      The fairness of each -- and how its structure relates to what it provides and who gets it, is a subject of debate.

      IMHO, wealth is created by standing on the backs of others. That isn't necessarily wrong per say, but I do think it creates a certain debt. However, one can notice quite readily that propositions that fund programs with sales tax (or bonds, but thats another subject), pass easily, while any increase in income tax is fought tooth-and-nail by ultra-wealthy lobbyists.

    32. Re:So... by trolltalk.com · · Score: 1

      Yes, I know the difference between regressive and progressive taxation levels. However, as I pointed out, what we thought was a regressive taxation policy isn't as regressive as we thought. The lowest income levels receive subsidies and benefits that offset much or all of the tax bite, so that even "flat" or "regressive" tax policies are not really. Its the middle class that gets it socked to them. Too "rich" to benefit from the breaks the poor get, and not rich enough to have the extra disposable income so that taxes are just another inconvenience. (People who complain about having to pay millions in taxes ... sheeh - I'd like to have that problem :-)

      Taxation should be treated the same as Willy Sutton said when asked why he robbed banks - "It's where the money is." Its only logical to tax those with more disposable income "disproportionately"; unfortunately, even a 50% tax on the ultra rich won't solve the nation's debt problems - there aren't enough of them. And taxing the ultra-poor at anything like the same rates is just mean, never mind that its also pointless - it would be literally "taxing them to death." A uniform sales tax has one benefit - the more you spend, the more you pay. As such its a flat tax. Include the freebies for the lower income groups in the calculation, and its actually slightly progressive (since their real net tax burden as a percentage of income is less than average, or even zero).

      Plus, a flat tax, no fancy loopholes, etc., is a lot easier to administer, and not as open to lobbying pressure.

    33. Re:So... by JavaRob · · Score: 1

      Correct, there is no *sales* tax on services in CA. But you do have to declare it as income come tax time. About 3% - 4% (iirc). (Still better than the fed rate of 25%-30% when you are self employed.) Sure, but that's not what the article is about. Income tax is the same for computer services and any other services -- you pay it federal, and probably in your state (unless they're one of the handful that don't have income tax, like Florida).
    34. Re:So... by yada21 · · Score: 1

      If the supplier paid the freight why is he invoicing you for it? Or to put it another way if he's invoicing you for it he didn't pay it, he's just passing it along.

      --
      I will have a sig when the market demands it.
    35. Re:So... by mabhatter654 · · Score: 1

      I would venture that the same sales tax exempt rules would apply as well. Much like if you purchase a computer as office equipment you pay sales tax, but if it is included as a capital project running a robot or such it typically does not have sales tax as you pay manufacturing taxes on it. You pay tax on BOXED software most of the time anyway. Like you said, several states are changing this to get some extra dime. Michigan recently made similar changes and I was surprised I WASN'T paying sales tax on things like car repairs and tanning etc.

      I don't think that closing the loophole will do any good because many of these businesses are so small it will cost more to account for the tax than they'll pay. Also, many of these are direct owners, so profits get taxed at personal income tax levels (25%) rather than sales tax levels, it would seem like double-dipping, but hey, it's taxes what is there to really like about it anyway?

    36. Re:So... by LaughingCoder · · Score: 1

      even a 50% tax on the ultra rich won't solve the nation's debt problems
      You are probably right, since the ultra-rich are already in a 35% tax bracket, so you can't squeeze much more out of that source. Plus, if you add in state and local taxes, social security, medicare, sales and property/excise taxes, the total tax bite probably blows right past 50% for many. BTW, did you know that the top 5% (by income) pay >54% of the federal taxes? http://www.infoplease.com/ipa/A0923085.html
      --
      The more you regulate a company, the worse its products become.
    37. Re:So... by Red+Flayer · · Score: 1

      This shows a very incomplete understanding of how corporate taxes work.

      Corps register in Delaware because their franchise tax is low and they have no corporate income tax. Franchise tax is unrelated to sales tax.

      HQ locations are irrelevant to where the corp is registered. It's quite legal to register your corp in DE, then have your HQ be in NY. There is no "name-only corporate HQ" in DE.

      Sales tax is based on where the service or goods are provided or delivered. If you have a firm in NY and you have sales in MD, you owe MD sales tax on those sales. You do not owe NY sales tax on those sales (with some exceptions -- if the tax on the component parts or services you took delivery of in NY would have been greater than the resale tax in MD, then you must remit the difference to NY on the component parts.

      Registering in DE means nothing in terms of sales tax.

      Some companies locate themselves out-of-state to get away with not paying sales tax, since it's harder for MD (to keep using that exmaple) to track down non-payors who are out of state. This is fraud, however, and your location doesn't change that fact.

      --
      "Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
    38. Re:So... by thogard · · Score: 1

      Europe and Australia use VAT and GST which are sales taxes on products and services. They are changed at every stage of the products development along with credits unlike the typical model in the US where wholesalers don't pay any sales tax but also don't sell to the general public.

      Another thing that is done nearly every where is to include the tax in the advertised price. While it means a $1.99 item in most US stores will cost you closer to $2.20, in other places the sales taxes are hidden which I think results in them getting raised with little complaint from the tax payers. VAT in Europe is approaching 20% and New Zealand went from 12.5% to 15% with nearly no outcry. One other nice bit (for the tax collectors) is that only some ratios work well for doing the supply chain calculations so the rates tend to go from 10% to 12.5% to 15% because if they picked other numbers the merchants would get confused about rounding.

    39. Re:So... by EtherMonkey · · Score: 1

      Sales Tax, Gross Receipts Tax, Income Tax, Employee Tax, Capital Gains Tax, Excise Tax, Property Tax, Real Estate Transfer Tax; how many ways our government finds to tax the same money over and over again.

      --
      --- A man with a briefcase can steal more money, than any man with a gun. [Don Henley]
    40. Re:So... by Dog-Cow · · Score: 1

      That is illegal. One state cannot tax businesses in another state. That is exactly what the interstate commerce clause in the Constitution is about. MD is free to tax the businesses taking advantage of out-of-state services, however.

    41. Re:So... by Anonymous Coward · · Score: 0

      You are probably right, since the ultra-rich are already in a 35% tax bracket, so you can't squeeze much more out of that source. Plus, if you add in state and local taxes, social security, medicare, sales and property/excise taxes, the total tax bite probably blows right past 50% for many.

      It's a fallacy that the ultra-rich are in the 35% tax bracket. Although they are for their income, most of the money that flows into their pockets each year get taxed at the 15% capital gains rate, at least for the smart ones. Big real income people (sports and entertainment figures, mostly) do get hit hard if they don't defer their income, though.

    42. Re:So... by Tronster · · Score: 1

      Mods: Parent is "Insightful"? Actually parent is making some incorrect assumptions. (Please mod down.)

      Last two contracting gig I did (I have a programming consultant business in MD), I paid state and federal taxes on my hourly salary. When I charge a client a rate, I have figured taxes into my figure.

      What just passed is an additional tax; and IMO is an exorbitant amount of what I need to give up.

      Note:
      This is also the same tax on arcades and landscaping services.

      More Links on the subject:
      eweek allamericanpatriots

    43. Re:So... by emilper · · Score: 1

      Sales tax is regressive. Even when rich boy buys a Rolex or a Lexus or whatever, the total tax paid relative to income is a smaller percentage compared to the other 98% of the population buying a Timex. ... so, what is the reach guy going to do with the rest of his income ? Hide it in a big hole in the ground, or spend it too, paying the sales tax ?
    44. Re:So... by murderaliberal · · Score: 0

      This is typical for dumbocrats.

      --
      sig
    45. Re:So... by Doctor+Faustus · · Score: 1

      Serious question, and perhaps that's how it works in your state.
      It definitely varies by state. Michigan was due to have a new service tax beginning January 1, and I think it just got repealed because the rules on what was and wasn't taxed were just too complicated. Previously, no services were taxed.

    46. Re:So... by Anonymous Coward · · Score: 0

      It's more likely that it was paid.

    47. Re:So... by bensode · · Score: 1

      Funny how lawyer services were excluded for just about every other service now taxable in MD. So glad I left the state and went to southern PA.

      --
      "Keep at least 3-6 full bottles of hard alcohol on hand, a 2 week resignation notice,..." - Poetmatt
    48. Re:So... by dbcad7 · · Score: 1
      He is invoicing me for the freight to recoup the cost he paid for it. (or will pay once UPS or whoever invoices him)

      The point is.. UPS collects tax for shipping.. to pay it again is double taxation.. example...

      You sell me a carburetor for $ 200.00
      UPS charges you 5.00 plus .35 for tax to ship it to me.. 5.35 total

      Traditionally, the invoice is like this..
      ..Carburetor .... $ 200.00
      ..Freight ........$ 5.35
      ..Tax ............$ 14.00 (using tax on goods only)
      ..Total ..........$ 219.35

      Heres how it works the other way...
      ..Carburetor .... $ 200.00
      ..Freight ........$ 5.35
      ..Tax ............$ 14.37 (using tax on freight and goods)
      ..Total ..........$ 219.72

      So the state has collected .35 cents from him, and .37 cents from me, for the same shipping charge in the latter version.

      --
      waiting for ad.doubleclick.net
    49. Re:So... by dbcad7 · · Score: 1
      There are many strange oddities to the food business... for example...

      If I am purchasing cups for my restaurant, they are non taxable.. but napkins are.
      Food coloring is taxable.. don't ask me why, any other edible ingredient is non taxable.

      If you were in the construction business, I would guess that it would be possible to have a resale card, and not pay sales tax (passing it to your customer later)

      --
      waiting for ad.doubleclick.net
    50. Re:So... by aproposofwhat · · Score: 1

      This is fraud, however, and your location doesn't change that fact.

      Since when has tax evasion been the same as fraud?

      Fraud = obtaining something by deception.

      Tax evasion = not paying money the politicians have decided you should pay.

      Apples and oranges, my good man.

      --
      One swallow does not a fellatrix make
    51. Re:So... by shlashdot · · Score: 1

      "Sales tax is based on where the service or goods are provided or delivered."

      This can be a little fuzzier than that, although the government would like it to be that way. The reality is that it is not practical for every merchant to be a registered tax collector for every location where they deliver goods. If you have an office, you have to register as a tax collector. If you don't, you don't. If you're not registered as a reseller, it's kind of hard to collect sales tax.

      --
      Additional plugins are required to display all the media on this page.
  3. First Post! by Anonymous Coward · · Score: 1, Funny

    Great, now our politicians want outsourcing.

    1. Re:First Post! by night_flyer · · Score: 1

      you haven't been paying attention, have you?

      --


      Thanks to file sharing, I purchase more CDs
      Thanks to the RIAA, I buy them used...
  4. This is awesome. by Anonymous Coward · · Score: 1, Interesting

    I do custom programming work in Missouri. All you Maryland folks can call me for tax-free work.

    Oh, and congratulations to the Maryland government for chasing those pesky high-paying jobs out of your state. I'm sure your citizens will thank you.

    1. Re:This is awesome. by superwiz · · Score: 4, Insightful

      Hey, it's a lot easier to run on the platform of helping the poor if you have more poor.

      --
      Any guest worker system is indistinguishable from indentured servitude.
    2. Re:This is awesome. by Mr.+Slippery · · Score: 1

      I do custom programming work in Missouri. All you Maryland folks can call me for tax-free work.

      I'm sure we'll still be responsbile for paying the use tax, just as if we ordered goods from you. As our Comptroller's website explains:

      Every state that has a sales tax also has a use tax. Maryland's use tax protects Maryland businesses from unfair competition. Local businesses would be at a competitive disadvantage if consumers were entitled to a 5 percent discount on items purchased from out of state businesses.

      Of course, no one actually pays the use tax they owe on stuff they buy for personal use from out of state companies. (Most people probably don't even know they owe it.) But if I think I might lose a programming gig because someone thinks they have to pay tax if they hire me and not if they hire you, I'll be sure to set them straight.

      --
      Tom Swiss | the infamous tms | my blog
      You cannot wash away blood with blood
    3. Re:This is awesome. by the_humeister · · Score: 1

      And how are we supposed to call you since you posted as an AC???

  5. If they wanted to send all the programmers away... by filbranden · · Score: 1

    Well, if they wanted to send all the programmers away, they just did it. With all the outsourcing to India and out of US, it was already a problem to keep a job before that, now that they introduced taxes, it's just got a lot harder.

  6. Or just don't pay... by Unlikely_Hero · · Score: 0, Troll

    You could also just opt to not pay the tax.
    Yes it's illegal, but I posit the following:
    Who cares anymore?

    The law in this country has become a complete and utter travesty where you're a felon pretty much no matter what you do.
    Have someone write the code and pay them in cash.

    Or will it take people until they begin taxing air to do this?

    Gah, doesn't anyone have limits?

    Attn: Maryland State Government: Pull your heads out of your collective asses. You're not entitled to shit.

    --
    Happiness does not come from having much, but from being attached to little.
    1. Re:Or just don't pay... by TeraCo · · Score: 1
      You're not entitled to shit.

      Put your money where your mouth is and stop paying ALL your taxes. Fight the power!

      --
      Not Meta-modding due to apathy.
    2. Re:Or just don't pay... by UbuntuDupe · · Score: 1, Flamebait

      But if we simplify the tax code, that would benefit the rich! --- Actual barrier to reform.

    3. Re:Or just don't pay... by Unlikely_Hero · · Score: 1

      And hopefully by not paying, make the power collapse under its own grotesque weight. Worthless fuckers

      --
      Happiness does not come from having much, but from being attached to little.
    4. Re:Or just don't pay... by Unlikely_Hero · · Score: 1

      I would like someone to justify how that is a troll. I sincerely believe what I wrote above. If this offends you, that is not my fault.

      --
      Happiness does not come from having much, but from being attached to little.
    5. Re:Or just don't pay... by moderatorrater · · Score: 2, Informative

      I obviously didn't mod you, but I would guess it's because you are advocating that people do something which is illegal and illogical, since not paying taxes would be a very bad thing overall since I enjoy our social contract, corrupt as it is. You're also insulting to the government of Maryland, offensive in general and insulting of those who don't support your position. Insulting and offensive while lacking useful content isn't technically trolling, but it should be modded down and there's no option that fits, so the mod could have chosen troll because it fit the closest. Personally, I wouldn't have modded you down, but I don't think it's inappropriate.

    6. Re:Or just don't pay... by Unlikely_Hero · · Score: 1

      Thank you for the reply, I appreciate the speculations

      1. I don't think something being illegal has any kind of correlation to its morality or ethical standpoint and its only illogical if I agree that the social contract is desirable as it stands, you may enjoy the social contract but I think its corruption mandates its dismantling.
      2. Why is insulting a government a bad thing? Who can give me an argument that insulting a government is a bad thing unless the insult is malicious whereas I view it as legitimate.
      3. No one has a right to not be offended, I think my position, while perhaps offensive to some, is legitimate.
      4. I do not see where I insulted those who disagree with me.

      I do not think my comment deserved to be modded troll. I think the moderation was based on the opinion expressed and not based on the spirit it was given in, which was honest.

      --
      Happiness does not come from having much, but from being attached to little.
    7. Re:Or just don't pay... by trolltalk.com · · Score: 1, Insightful

      Perhaps the poster didn't express it properly, but part of the "social contract" that your tax-free programmer benefits from is:

      1. meat and other food inspections;
      2. a system of laws and courts;
      3. police and fire protection, disaster relief;
      4. roads, water and other infrastructure;
      5. basic education;

      Or we could have everyone do what you advocate, and stop paying taxes. Schools would close. Houses would be allowed to burn to the ground, whoever had the biggest gang would p0wn your shit, and could butt-rape your 5-year-old son (and you) without fear of any jail time, but that would be okay, because you'd be "stickin' it to da man!"

      Sales taxes are a relatively fair consumption tax, because past a certain point, you don't have to buy stuff. Someone who buys a $6,000 Rolex will pay more sales tax than someone who buys a $9.99 WalMart WallyWatch. It also encourages saving, which, considering the negative saving rate over the last decade, is something that is needed.

    8. Re:Or just don't pay... by marct22 · · Score: 1

      Simplying the tax code is actually not so easy. Base it on income? Then those of us who don't earn wages (cashing-out of stocks isn't a wage) avoid this tax. Flat tax? Punishes the poor. Opening exemptions for the poor? Also opens loopholes. Use an AMT-type of tax? If not done properly (index to inflation), then more of us gets hit by it each year. As you plug more and more loopholes and correct any inequities (someone gets taxed too much, be they the poor, some industry unfairly punished, some lobbyist throws extra money around to entice favorable taxes for their clients), your tax code gets more and more complex.

    9. Re:Or just don't pay... by UbuntuDupe · · Score: 1

      Yep, exactly my point: you don't want the tax code to be simplified because then you couldn't punish the rich as easily. And next you're going to complain about how much tax accountants and tax attorneys make, and how programmers are teh oppressed! Go fig. Just, go fig.

    10. Re:Or just don't pay... by sauge · · Score: 2, Insightful

      1. meat and other food inspections;
            2. a system of laws and courts;
            3. police and fire protection, disaster relief;
            4. roads, water and other infrastructure;
            5. basic education;

      -----

      1) Haven't been paying attention to the news with all the food poisoning, out-of-country dangerous foods, and recalls eh?

      2) Two letters: O J

      3) The fat cats always threaten the population with basics being effected. Meanwhile, the portion of the budget we don't see grows with the size of their offices and staffs. I have yet to see a city manager take a salary cap or reduction.

      4) Tell that to Minnesota. Careful on the bridges.

      5) Right now instead of using taxes, they are using private loans to pay those rising tuition rates.

      We all rent from the government anyway. Try not paying your property taxes - you will find out who the landlord is real fast. Heck, they even tax the toilet paper you wipe your butt with around here.

      But, we won't do anything until it finally all falls apart.

    11. Re:Or just don't pay... by st0rmshad0w · · Score: 1

      Yeah that complicated tax code is why Warren Buffett pays 17% while his secretary pays 30%. Even HE doesn't agree with it.

      And you mentioned attorneys, go figure legal services STILL aren't subject to this expanded sales tax, while my clicking buttons on a virus scanner or install wizard somehow is.

    12. Re:Or just don't pay... by Unlikely_Hero · · Score: 1

      thank you sauge, I feel the same way
      Other people living on soil claimed by the American Mafia
      We are being scammed.

      --
      Happiness does not come from having much, but from being attached to little.
    13. Re:Or just don't pay... by clay_buster · · Score: 1
      This is of course utter nonsense. Why did the legislature single out computer services but leave others untouched? It had nothing to do with fairness and everything to do with the size of the pot and the relatively disorganized nature of the opposition. They proposed a tax on auto repair and it was heavily lobbied against.

      Maryland aggressively competes with Virginia for IT companies and IT jobs. Most of the good work is already in Virginia and this is just going to make it more so. It will pretty easy for the few decent (large) MD in-house and custom IT shops to move across the river. Its not like they have factories to move.

    14. Re:Or just don't pay... by Anonymous Coward · · Score: 0

      Oh I don't Know About all that.... I think my second amendment rights would have something to say about it. I already live in the most dangerous city in America.

      Besides, I can smell my own milk to see if its good enough to drink. The goverment is nothing but a bunch of crooks, who have turned their public service in to an industry. Ironically, they get pretty health care benefits, too.

    15. Re:Or just don't pay... by trolltalk.com · · Score: 1

      And you think it would be better if there were no oversight? No CDC? No accountability? No accreditation of engineers? No standards for materials?

      Instead of complaining about city managers' salaries, do something - run for office. Its not that hard or that expensive. I've done it 3 times - so far I'm 0 for 3, but it was still a worthwhile experience, and it made a small difference.

      BTW - basic education is still supported by taxes last I looked. If you want to go private, you're free to do so and pay extra, but that's your decision.

    16. Re:Or just don't pay... by jonsharpie · · Score: 1

      Unfortunately your post is less than "insightful" if not wrong. Your statement "tax-free programmer" is hardly tax free. He's not benefiting from the service not being taxed, it is the consumer that is benefiting. The tax law just means that the programmer will have to add on tax to the total bill. With all of the ways that money is taxed there's no need for more taxes, just better management. When they buy pencils for $4.00/each that is an absurd waste of money. If anything else we need more responsibility in government rather than more taxes. Re: your point about saving? How? Are you referring to an income tax rebate that people get at the end of the year? That doesn't have to do with sales tax. You never get sales tax back.

    17. Re:Or just don't pay... by TeraCo · · Score: 1

      For further examples of when the 'a superpower collapses under it's own grotesque weight', please review the fall of the Soviet Union. I'm not convinced you really want that at a local level.

      --
      Not Meta-modding due to apathy.
    18. Re:Or just don't pay... by trolltalk.com · · Score: 1

      And when Virginia makes the same tax grab? Its not like anyone to want to leave money on the table - not with deficits climbing.

    19. Re:Or just don't pay... by Kadin2048 · · Score: 1


      And when Virginia makes the same tax grab? Its not like anyone to want to leave money on the table - not with deficits climbing.

      Not going to happen in VA. The state is a lot more conservative and anti-tax than VA, and many more big software companies have big presences there, particularly in northern VA. (Although most of the development business is all public-sector stuff, where the client is the Federal government and would be exempt anyway.)

      I would expect to see much higher real- and personal-property taxes, and maybe personal and corporate income taxes, before you see a tax on services in VA. The politicians are stupid, but they generally know not to shit where they eat, and messing with the consulting or software industries would definitely qualify as taking a dump in the trough.
      --
      "Ladies and gentlemen, my killbot features Lotus Notes and a machine gun. It is the finest available."
    20. Re:Or just don't pay... by Unlikely_Hero · · Score: 1

      the soviet union was set up quite differently (albeit with about the same level of concern for the average person), so I don't think it would exactly happen the same way. Also I don't see it ending any other way to be honest. What do you expect; the US government to suddenly become uncorrupt and practice wise spending/fiscal policy? I sure don't. The people in power are going to run the country into the ground; so why lie to myself that it's not going to end that way? It's not if I want it to happen its that its going to and Id rather it just happen and be done with.

      --
      Happiness does not come from having much, but from being attached to little.
    21. Re:Or just don't pay... by trolltalk.com · · Score: 1

      You need more taxes, not less. The states and local governments are in the hole for trillions, the feds for 9 trillion plus another 50 trillion for future social security and medicare/medicaid.

      Artificially lowering taxes increases spending and decreases savings, as people take advantage of the lower taxes to buy - same as artificially low interest rates caused the housing bubble.

      Like anything else, a too-low rate now, in relation to obligations, means more pain further down the road.

      Paying back all this mess would require each family to pay $31,000 per year, for the next 75 years. Your grandchildren are going to have to pay for your "largesse" - self-indulgence - in not setting tax rates that would put the system on a viable fiscal footing.

    22. Re:Or just don't pay... by trolltalk.com · · Score: 1

      So what happens when the feds have to ram through a VAT (Value-Added Tax) in 2010 because of the deepening financial crisis?

      If you think what the US is in is a financial crisis now, you haven't seen anything yet ... analysts are divided between this being the second or 3rd inning, but they all agree its only be beginning, and are now making direct comparisons with the Great Depresseion, in terms of the long-term impact of the housing bubble collapse on the US.

      They won't have a choice. Even if they decide to default on the debt (which isn't really an option anyway), they'd still need to go to a VAT on all goods and services, as anything else will just result in more lobbying by each side who doesn't want their particular ox gored.

      Besides, as you indirectly point out, if they don't squeeze it out one way, they'll squeeze it out another. When push comes to shove, and the bills have to be paid, and there's no more credit available, they'll tax anything they can, voters be damned.

    23. Re:Or just don't pay... by narsiman · · Score: 1

      Thanks for identifying all the exceptions to the norm. All the other hard working government employees can get back to work now. Your pay is your reward and you will be smitten no matter what you do. Much of these troll mongers should visit a 3'rd world nation to really understand what a functional government means.

    24. Re:Or just don't pay... by marct22 · · Score: 1
      Since when did I say I wanted to punish the rich? Or complain about how much tax accountants/attorney's make? I have no idea how much they make, and I guess I don't really care. I have no desire to become one, perhaps if they made a million dollars I might...

      People have been paying taxes probably ever since our ancestors abandoned the hunter/gatherer mode of existence. We all hate paying taxes, but they do pay for vital services that you or I individually would not want to pay for. Why should I want to pay for pothole repairs in front of your house? Why should you pay firefighter's salaries in my neighborhood? Taxes pay for our soldiers and equipment, the roads we drive on, the schools that educated us, the infrastructure that businesses use so they can employ us, forests and parks we can enjoy (or exploit), etc. There's always something you or I can't see value in that other's do (sports stadiums, art museums, geological studies, surveying, food inspectors, IRS, etc.), but all play a role.

      Don't like certain tax laws? Then complain to your Congressperson. They write the laws that change the equations governing how this person gets taxes vs. that person. Why does Warren Buffett play less tax proportionally than his secretary? Is that right? Just because you are rich, does that also entitle you to play less in taxes than us grunts who keep you rich?

      Mind you, I am not arguing that we need to tax the rich until they are poor, that would be stupid and counterproductive, and harmful to America. But somewhere, there should be a balance between the two absurd extremes (rich-taxed-until-poor vs. rich-pay-no-tax-at-all-because-they-are-rich). And that balance will shift around as new ways of making money/avoiding taxes are discovered.

    25. Re:Or just don't pay... by HornWumpus · · Score: 1

      The feds will print money and pay their bills while simultaneously shrinking their debt (via inflation) which is mostly at a fixed rate.

      Better to keep you assets in the form of some gold and rural real estate but mostly in steel and copper jacketed led. It is going to be very ugly when the great unwashed realize that their SSI (social security disability is where all the welfare cheats live these days) check won't pay for jack shit anymore.

      The fact that Europe has the same unfunded retirement system problem doesn't make the Euro look any better in the long term. There you've got dozens of nations that own printing presses for the same currency.

      --
      John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
    26. Re:Or just don't pay... by trolltalk.com · · Score: 1

      Not everyone has gone wacko. For example, Canada's retirement fund is on an actuarily sound, fully funded basis for the next 75 years. AND they just reduced the federal GST tax from 7% to 6%, since the overall federal debt has gone down enough (after running more than a decade of surpluses) to "give up" some of the tax.

  7. Its not that far of a drive to Deleware by vertinox · · Score: 4, Insightful

    I don't see why this tax would do anything other than push computer related jobs out of the state and/or overseas.

    --
    "I am the king of the Romans, and am superior to rules of grammar!"
    -Sigismund, Holy Roman Emperor (1368-1437)
    1. Re:Its not that far of a drive to Deleware by King+Louie · · Score: 2, Informative

      Actually, it already has. the area around Reston / Herndon Virginia (perhaps 20 miles from Maryland) is a huge IT hub. It's the Silicon Valley of the East coast. Why so many high-tech companies? Because Virginia doesn't see a corporation as a cash cow to be milked to death (at least, not yet).

    2. Re:Its not that far of a drive to Deleware by Mr.+Slippery · · Score: 1

      Why so many high-tech companies?

      Because twenty years ago - before the First Tech Bubble - that was farmland.

      D.C. is a natural hub for business, but the area north of D.C. was already developed, occupied by defense and aerospace contractors and old guard tech companies.

      --
      Tom Swiss | the infamous tms | my blog
      You cannot wash away blood with blood
  8. So is this good or bad for coders? by phorm · · Score: 4, Interesting

    In one case, it adds to the cost of hiring a contractor, thus raising the price of short or quick contract work (bad for contractors). On the other hand, hiring an in-house IT guy to do coding (which I'd assume isn't taxed beyond normal income taxes) may seem better, which perhaps means more permanent jobs.

    Stupid taxes are still stupid, but is this one good or bad for the IT sector in general?

    1. Re:So is this good or bad for coders? by bahwi · · Score: 1

      Not everyone wants a permanent position, contractors are not necessarily unhappy or those who have been laid off, some of us do this for a living and enjoy it. It is a permanent job, just not for everyone. It's good bad, in which it changes the playing field and is bad in some circumstances, and good in others(permanent job). Unfortunately, I can't see it being very good because of 49 others states, india, russia, and others.

    2. Re:So is this good or bad for coders? by moderatorrater · · Score: 1

      Overall it's bad for the programming sector in the US. Whether you prefer contracting or employment, it doesn't change the fact that it also encourages the companies to go overseas. Also, it encourages less programming in general. This is overall bad for the IT sector.

    3. Re:So is this good or bad for coders? by letxa2000 · · Score: 1

      Stupid taxes are still stupid, but is this one good or bad for the IT sector in general?

      Does it matter? I don't trust the legislature to make consulting/full-time decisions for the sector. That should be decided by the employees and employers.

      Taxing should be used to raise the absolute minimum for legitimate and constitutional government functions, not for social engineering. Taxing something is always a bad idea. The only possible exception to this is tariffs on imported goods, in some cases, to compensate for reciprocally high tariffs of the other country in question, or for inequivalent labor/environmental regulations that put them at an unreasonable advantage when compared to domestic companies that have to worry about those things.

      Other than that, it is absurd to think that taxing something will actually help it in the market.

    4. Re:So is this good or bad for coders? by Watson+Ladd · · Score: 1

      How do you like those 16-hour workdays in unsafe conditions then?

      --
      Inventions have long since reached their limit, and I see no hope for further development.-- Frontinus, 1st cent. AD
    5. Re:So is this good or bad for coders? by letxa2000 · · Score: 1

      I don't. I said that compensating for that is the only exception, where using taxes for social engineering is reasonable.

    6. Re:So is this good or bad for coders? by moderatorrater · · Score: 1

      Strikes and unions have been more effective than regulations at keeping people out of unsafe conditions. My dad is an electrical engineer who works 12 hour days on salary without any overtime pay. The lineman that work under him earn roughly the same amount of money, but they also get overtime and better benefits because they have a union and are have gone on strike before.

    7. Re:So is this good or bad for coders? by Bluesman · · Score: 2, Insightful

      Good or bad depends on who you are. What's meaningful to discuss are the effects of this tax. Maryland IT in general is now 6% less productive, overnight.

      This will factor into the "cost of doing business." Some number of employers who would have paid for services before will now either do without or look somewhere else where they don't pay the 6% penalty, ultimately they'll do without the productivity boost they previously would have had.

      Those are the facts, it's simple supply and demand. What can be argued is that this money will be better off in hands of the Maryland government than being used to make Maryland business more productive. That's a judgement call. You can also argue that the higher tax will drive business out of Maryland and essentially provide little to no (or even a negative) revenue boost.

      I used to do web development as a side job in Maryland for a few small businesses. They could pay very little, so I'd do for them what they could afford, and they were fairly happy with what I could provide. I was happy enough with what they could pay.

      A 6% sales tax means that it's no longer worth it for me to do any work in Maryland. The companies I provided services to will be hard pressed to find someone who will work as cheaply as I did, so they'll likely keep going with what they've got, hoping it doesn't break substantially. The state of Maryland will lose the tax it used to receive from the work I did there.

      While my individual contribution is a drop in the bucket, I'm sure this particular circumstance will repeat itself many times.

      --
      If moderation could change anything, it would be illegal.
    8. Re:So is this good or bad for coders? by Bluesman · · Score: 1

      "The state of Maryland will lose the tax it used to receive from the work I did there."

      Sorry to reply to my own post, but this requires clarification. Simply being in Maryland and doing work meant that I'd be paying other taxes -- eating, buying supplies, etc. There was no direct sales tax on the work I did.

      --
      If moderation could change anything, it would be illegal.
    9. Re:So is this good or bad for coders? by funaho · · Score: 3, Interesting

      A 6% sales tax means that it's no longer worth it for me to do any work in Maryland

      And this is where the real victims will be, those of us who do programming work on the side for some extra income. The hassle of getting a tax ID (which might require setting up a real company), collecting and passing on sales tax to the state is pretty big when all you had to do previously was declare a couple thousand extra dollars on your income taxes at the end of the year. The big consulting companies will complain about it, but in the end they'll just keep on rolling. The little guys will get rolled over.

      Michigan (which is where I live and work) recently passed a large tax law change that will charge 6% sales tax on consulting services, among many other things such as massage services (yeah you'll pay 6% on your happy ending!) I'm still trying to decide if its worth the hassle anymore.

    10. Re:So is this good or bad for coders? by Bluesman · · Score: 2, Interesting

      There are even additional hassles. I'm no longer a Maryland resident, but I'd probably have to file a non-resident income tax form at the end of the year just to pay this tax.

      Previous experience shows that when you file such forms, the state of Maryland tries to tax your entire income for the year, not just the income you earned in Maryland. Simply submitting the form opens you up to all sorts of legal hassles and inquiries from an extremely incompetent government agency. When I lived there, I had such a problem with one of my tax forms that took over a year to correct.

      No thanks.

      --
      If moderation could change anything, it would be illegal.
    11. Re:So is this good or bad for coders? by Attila+Dimedici · · Score: 1

      And this is where the real victims will be, those of us who do programming work on the side for some extra income. The hassle of getting a tax ID (which might require setting up a real company), collecting and passing on sales tax to the state is pretty big when all you had to do previously was declare a couple thousand extra dollars on your income taxes at the end of the year. The big consulting companies will complain about it, but in the end they'll just keep on rolling. The little guys will get rolled over.

      The little guys will just drop off the books entirely. Many of them will still do the work, only now it will be cash payment. Then they won't report it on their federal or state income tax reports. My suspicion is that this will be a "revenue neutral" tax increase.
      --
      The truth is that all men having power ought to be mistrusted. James Madison
    12. Re:So is this good or bad for coders? by Mr.+Slippery · · Score: 2, Informative

      I'm no longer a Maryland resident, but I'd probably have to file a non-resident income tax form at the end of the year just to pay this tax.

      Nope. Completely different tax, completely different forms.

      --
      Tom Swiss | the infamous tms | my blog
      You cannot wash away blood with blood
    13. Re:So is this good or bad for coders? by Facekhan · · Score: 1

      I would suggest that this just evens the scales more or less for hiring someone as an employee vs a 1099 or through another company. Part of the motivation could be the very prevalent practice of companies ignoring IRS rules to hire employees as contractors or hiring someone through another company that hires the person as a 1099 contractor. It cost's the state money when people don't get hired as employees and receive company benefits.

    14. Re:So is this good or bad for coders? by Fallen+Kell · · Score: 1

      They want their 6% from the multi-millionaire masseuse that work(ed) at Google... Seriously now, they want their cut too.

      --
      We were all warned a long time ago that MS products sucked, remember the Magic 8 Ball said, "Outlook not so good"
    15. Re:So is this good or bad for coders? by bmartin · · Score: 1

      I used to work as a consultant for a gigantic multi-national IT corporation. It's a big money-sink. The bulk of profits end up going to the consulting company. Ignorant non-IT companies end up paying much more than they should for labor.

      Case and point, one of my former co-workers made $45K starting out. His employer stationed him in NYC. He worked for a client there doing mainframe maintenance at about $160/hr (about $320K/yr). The client wasn't able to determine when he was at work and when he wasn't. His company sometimes billed the client while he wasn't even there, so they undoubtedly made more on him than that.

      That means the company made about $275K/yr off of this guy (minus the benefits he received). That's $275K the client would've saved, had they hired him directly.

      This is what happens when forego traditional interviews and rely on a third party to staff your IT department. I wager that cutting down on consulting will put more money in the pockets of both permanent employees and large corporations.

      --
      "You could almost look at defense of Microsoft as a form of the Stockholm syndrome." -neapolitan
    16. Re:So is this good or bad for coders? by thePowerOfGrayskull · · Score: 1

      Previous experience shows that when you file such forms, the state of Maryland tries to tax your entire income for the year, not just the income you earned in Maryland. Simply submitting the form opens you up to all sorts of legal hassles and inquiries from an extremely incompetent government agency. When I lived there, I had such a problem with one of my tax forms that took over a year to correct.

      Holy crap, I thought that was just me. When we lived in an apartment there for six months, they tried to claim that we owed taxes on an entire year. Went so far as to put a tax lien on the house we moved into in another state.

      Like others here, I had been doing some small projects on the side for MD businesses; with this, it's no longer worth it. I have no interest in getting involved in paying /any/ kind of tax (even though sales is unrelated to income) to the MD government again, after that fiasco.

    17. Re:So is this good or bad for coders? by forrestt · · Score: 1

      This works for the little guys that only do work for home users or small mom & pop business, but the little guys that actually work for a medium to large businesses won't likely be able to work under the table. The businesses will want to take the expense deduction for the payment.

    18. Re:So is this good or bad for coders? by b0s0z0ku · · Score: 1
      The hassle of getting a tax ID (which might require setting up a real company), collecting and passing on sales tax to the state is pretty big when all you had to do previously was declare a couple thousand extra dollars on your income taxes at the end of the year.


      At least in New York State, getting a tax ID and sales tax certificate of authority is a matter of filling some forms out online. Takes about 15 min, no more. And sales tax is filed quarterly on a shortish form, so if you keep good books, it shouldn't take you more than a half hour per quarter.


      -b.

    19. Re:So is this good or bad for coders? by CommanderData · · Score: 1

      Exactly, I'm one of the little guys and I do some contracting with large, multi-billion dollar companies. There's no way I'm getting cash payments out of them, and no way they would allow payment to slide "under the table" without reporting to the goverment every penny paid out.

      --
      Urge to post... fading... fading... RISING!... fading... fading... gone.
    20. Re:So is this good or bad for coders? by Anonymous Coward · · Score: 0

      And this is where the real victims will be, those of us who do programming work on the side for some extra income. ... The big consulting companies will complain about it, but in the end they'll just keep on rolling. The little guys will get rolled over.

        Yeah, this is a frequent outcome of government regulation -- what should be surprising to some of the vulgar libertarians here is that this kind of regulation is often written by representatives of the affected "big companies", as a means of wiping out smaller competition. Effectively, if you get enough of these barriers to entry, you legally cartelize the industry and can then maximize your profits without running afoul of anti-trust law.

    21. Re:So is this good or bad for coders? by Watson+Ladd · · Score: 1

      Well, corporations were good at preventing unions from forming until the government stepped in and said workers had a right to organize. Regulations have some advantages over unions(all employers get affected, no lengthy battle to cooperative bargaining), and some disadvantages (slow to change) but both are tools workers used in their battle to get some recognition.

      --
      Inventions have long since reached their limit, and I see no hope for further development.-- Frontinus, 1st cent. AD
  9. Why? Government jobs are onsite, that's why by gelfling · · Score: 5, Insightful

    You can't move an awful lot of government programming offsite. It's where it is. There is a gigantic amount of government work in MD so the state sees a big juicy way to tax the Federal government (and itself) to suck some money into their own pockets.

    1. Re:Why? Government jobs are onsite, that's why by Gr8Apes · · Score: 1

      You can't touch federal programs. The federal government can't be taxed by states.

      --
      The cesspool just got a check and balance.
    2. Re:Why? Government jobs are onsite, that's why by Anonymous Coward · · Score: 0

      You can tax the pieces that go into it. You think federal employees don't pay state taxes?

    3. Re:Why? Government jobs are onsite, that's why by glitch23 · · Score: 0

      You can't move an awful lot of government programming offsite.

      Yeah we can't move it offshore nor just simply offsite to workers' homes because the information is sensitive in many cases. That rules out telecommuting for some people (both gov't and contract people).

      --
      this nation, under God, shall have a new birth of freedom. -- Lincoln, Gettysburg Address
    4. Re:Why? Government jobs are onsite, that's why by Tiro · · Score: 1

      You idiot, the US Federal Government would be immune to all of these taxes, including services purchased from contractors or companies in the state. This legal precedent goes all the way back to McCulloch v. Maryland, 17 U.S. 316 (1819).

    5. Re:Why? Government jobs are onsite, that's why by zarqman · · Score: 1

      yes it can. i worked for a computer shop in new mexico in the 90s. for transactions with various departments of the federal government, we charged them taxes for services, but not parts. only the parts were exempt.

      --
      geek friendly VPS's and free API enabled DNS : zerigo.com
    6. Re:Why? Government jobs are onsite, that's why by zarqman · · Score: 1

      back in the 90's i worked for a small computer shop in new mexico. new mexico taxes everything, including services. several other states do this also. so, it was usual to charge our customers tax for both parts and labor. when it came to the federal government, we couldn't charge them tax for the parts, but we did for labor.

      --
      geek friendly VPS's and free API enabled DNS : zerigo.com
    7. Re:Why? Government jobs are onsite, that's why by Anonymous Coward · · Score: 0

      Not uncommon for laws to contradict ... So let's say that a consultant doing a fed. contract is based in MD. MD demands their 6% flesh of the contractor. The 'State' is not taxing the fed ... the consultant is in this case. If they can't do a 'tax' markup, then they just raise their fees by 8% (have to cover overhead on the tax). That ... or they get snubbed out of business (See all of the posts about why this is bad for programming business in MD).

      As a programmer in MD, I'm glad to be an in-house programmer. Maybe I can justify a 4-5% salary hike out of this. After all .... was I contracted out, it would be an additional 6%! :p

    8. Re:Why? Government jobs are onsite, that's why by usrerco · · Score: 1

      > a big juicy way to tax the Federal government (and itself) to suck
      > some money into their own pockets.

      IANAL, but I don't think states can tax the US government.
      I suppose it depends on the specifics of the situation.

      The following page is a Washington state page, but it seems to refer to
      federal law that may apply to all states, not sure:
      http://apps.leg.wa.gov/wac/default.aspx?cite=458-20-190

      "(1) Introduction. Federal law prohibits Washington from directly imposing taxes
      upon the United States."

      "(3) Prohibition against taxing the United States. The state of Washington is prohibited
      from imposing taxes directly upon the United States."

    9. Re:Why? Government jobs are onsite, that's why by sushibot · · Score: 1

      No, no, no. I don't care what state, the Feds will be exempt from all state taxes; not-for-profit private, quasi-governmental and government entities would also be exempt.

      In Texas, sales tax is charged whenever there is an "end product" involved. The way the law reads, we are to not charge tax on work like discovery, project management and design, but actual development work is taxed if it produces an "end product."

      -G

    10. Re:Why? Government jobs are onsite, that's why by Anonymous Coward · · Score: 0

      The Federal Government and State of Maryland are...

      TAX EXEMPT

      so they're not getting any revenue from the state or feds.

    11. Re:Why? Government jobs are onsite, that's why by samHead · · Score: 1

      I'm a Maryland resident. Maryland based companies do suck in money from the federal government via Information Technology work and now this work will be taxed by the state. I think our local politicians saw this as an opportunity to make some cash off the feds and just couldn't resist implementing a bad idea. This now becomes another example of how Maryland's state government is unfriendly to business.

  10. Neil Stephenson is laughing somewhere... by Orthuberra · · Score: 1

    As freelance coders such as Hiro Protagonist move underground, while the government falls apart.

  11. IOW by WindBourne · · Score: 1

    Maryland gets you coming or going. I wonder what those congresmen do to the hookers

    --
    I prefer the "u" in honour as it seems to be missing these days.
    1. Re:IOW by Sponge+Bath · · Score: 4, Funny

      I wonder what those congresmen do to the hookers

      Pay them with your tax dollars. That's a fact.

    2. Re:IOW by Paco103 · · Score: 5, Funny

      I wonder what those congresmen do to the hookers
      The same thing they do to their constituents. . . .
    3. Re:IOW by rivaldufus · · Score: 3, Funny

      Not me - I specifically wrote in "not to be spent on hookers" on my last check to the IRS.

    4. Re:IOW by Fulcrum+of+Evil · · Score: 1

      they've also gotta buy blow.

      --
      "We returned the General to El Salvador, or maybe Guatemala, it's difficult to tell from 10,000 feet"
    5. Re:IOW by smittyoneeach · · Score: 1

      I wonder what those congresmen do to the hookers

      Request you elaborate on the difference.
      --
      Get thee glass eyes, and, like a scurvy politician, seem to see things thou dost not.--King Lear
    6. Re:IOW by iminplaya · · Score: 1

      They pay them?

      --
      What?
    7. Re:IOW by FooAtWFU · · Score: 2, Insightful

      Not me - I specifically wrote in "not to be spent on hookers" on my last check to the IRS.
      Money is fungible. So they'll just take the $N allocated to hookers from your check and spend it on Pork instead, then take $N from the Pork fund and use that instead.
      --
      The World Wide Web is dying. Soon, we shall have only the Internet.
    8. Re:IOW by renegadesx · · Score: 1

      They hire hookers for hookers?

      --
      Make SELinux enforcing again!
    9. Re:IOW by penix1 · · Score: 3, Informative

      There's a recursive joke in there somewhere...

      --
      This is a sig. This is only a sig. Had this been an actual sig you would have been informed where to tune for more sigs.
    10. Re:IOW by Anonymous Coward · · Score: 3, Funny

      In Other Words, Open Source/Free Software becomes an even better bargain! 6% tax on $) expense is $0 tax.

    11. Re:IOW by Fulcrum+of+Evil · · Score: 1

      nah, custom development still gets charged at $60/hr, give or take.

      --
      "We returned the General to El Salvador, or maybe Guatemala, it's difficult to tell from 10,000 feet"
    12. Re:IOW by SonicSpike · · Score: 1

      With the exception of Ron Paul.

      --
      Libertas in infinitum
  12. One more positive for packages by Maxo-Texas · · Score: 1

    You don't pay a custom programming tax on "Word" or "Windows" or "Linux" and probably not for "Infinium" or "TMS" or "PKMS".

    So this will be another factor boosting the use of packages by companies.

    Given the enormous crunch coming for labor in general and programmers in particular, this is pretty much a nail in the coffin for one sector of business in that state. And as some companies successfully use packages, that will be used a model for other companies elsewhere.

    --
    She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
    1. Re:One more positive for packages by Mr.+Slippery · · Score: 1

      You don't pay a custom programming tax on "Word" or "Windows" or "Linux" and probably not for "Infinium" or "TMS" or "PKMS".

      Uh, no. You pay sales or use taxes on them.

      --
      Tom Swiss | the infamous tms | my blog
      You cannot wash away blood with blood
  13. buying out-of-state might not help by stomv · · Score: 1

    if they structured it anything like the sales tax, then there's an accompanying "use tax" of equal percentage. Generally speaking, states charge x% tax on anything purchased in the state payable at the point of sale, but also charge x% on the dollar value for all items purchased out of state and brought into the state, payable on tax forms. If they set up the same plan in this case, than buying out-of-state merely delays the tax due date by some time interval less than a year but doesn't change the amount owed.

    1. Re:buying out-of-state might not help by moderatorrater · · Score: 1

      Usually companies pay more for custom programming than they do for pre-packaged code, and they perceive themselves to be paying less for out-of-country programming. It's just another cost to hiring someone that companies won't want to pay.

  14. Idiocy like this... by SputnikPanic · · Score: 5, Insightful

    ... is the price that we Marylanders have to pay for returning one-party rule to the state. This tax is part of a $1.3 billion tax package that our "rock star" governor called a special session to get. In addition, he just increased the sales tax by 20 percent, an increase that disproportionately impacts poorer folks, the very people who the governor and his party keep telling me they deeply care about.

    1. Re:Idiocy like this... by Anonymous Coward · · Score: 0

      In addition, he just increased the sales tax by 20 percent

      Better work on that 'framing the language of debate' a bit more.

      Everybody reading that thinks 'boy is this guy trying to make a 5->6% move sound like a bigger deal than it is'.

    2. Re:Idiocy like this... by INT_QRK · · Score: 1

      Its the price we pay for our failure to pay attention to state and local politics, because national politics gets all of the media coverage. A while back when Comrade O'Malley proposed the tax grab (of which this discussion only covers a very small part) I took the time to download my state Senator and three Delegate's email addresses (yes, MD works different from national two Senator and one Congressman model). I've voice my concerns regularly, but of course, with one party domination (Democrats) what do they care? My personal strategy from now on is to reflexively vote against every incumbent at the state level unless I have specific reason not to.

    3. Re:Idiocy like this... by letxa2000 · · Score: 1

      is the price that we Marylanders have to pay for returning one-party rule to the state.

      Out of curiosity, then, is this the brainchild of the Democrats or the Republicans?

    4. Re:Idiocy like this... by ScrewMaster · · Score: 1

      You know, at some point in the distant past that question actually had relevance. Nowadays, they're all on the take and want nothing more than to increase their take.

      --
      The higher the technology, the sharper that two-edged sword.
    5. Re:Idiocy like this... by Detritus · · Score: 1
      They also doubled the tobacco tax to $2 per pack of cigarettes, another tax that disproportionately affects low and middle-income residents of Maryland.

      Who voted for these weasels? It wasn't me. Of course, the thought of cutting spending never entered their tiny little brains.

      --
      Mea navis aericumbens anguillis abundat
    6. Re:Idiocy like this... by letxa2000 · · Score: 2, Insightful

      They "take" from special interests, usually not from government coffers. I can't imagine how taxing labor is in the interest of either party, although it does sound like something Democrats would do due to their lack of understanding of economics. Republicans overspend because they're addicted. Democrats do it because they think it's actually a good idea.

    7. Re:Idiocy like this... by superwiz · · Score: 5, Insightful

      Like I said in a previous post, it's a lot easier to run on the platform of taking care of the poor if you create more poor.

      --
      Any guest worker system is indistinguishable from indentured servitude.
    8. Re:Idiocy like this... by Detritus · · Score: 1

      There is only one party, comrade. The ballot in the last state election reminded me of the USSR. For most offices, the choice was between voting for a Democrat, usually the incumbent, or not voting for anyone.

      --
      Mea navis aericumbens anguillis abundat
    9. Re:Idiocy like this... by tkrotchko · · Score: 3, Interesting

      "'boy is this guy trying to make a 5->6% move sound like a bigger deal than it is'."

      Yeah, how dare he do the math and quote the correct percentage increase.

      --
      You were mistaken. Which is odd, since memory shouldn't be a problem for you
    10. Re:Idiocy like this... by SputnikPanic · · Score: 1

      Out of curiosity, then, is this the brainchild of the Democrats or the Republicans?

      In this case, this is the Democrats' baby, but I have to agree with another reply here that the question is beginning to lose relevance. Anytime one political party controls all the reigns of government, it just gives that party a green light to go to excess. Republican, Democrat, local, state, federal -- none of that seems to matter. The particular brand of excess differs with the parties, but the tendency to strong-arm their respective agendas is the same.
    11. Re:Idiocy like this... by Anonymous Coward · · Score: 1, Insightful

      They also doubled the tobacco tax to $2 per pack of cigarettes, another tax that disproportionately affects low and middle-income residents of Maryland.

      I end up having to pay their medical bills, so fuck 'em. I hope it goes to five bucks a pack.

    12. Re:Idiocy like this... by ScrewMaster · · Score: 1

      That's a decent analysis, actually. I'll buy that. My point is that from the perspective of how my tax bill keeps increasing, it doesn't seem to matter which group of bloodsuckers is in power.

      --
      The higher the technology, the sharper that two-edged sword.
    13. Re:Idiocy like this... by galego · · Score: 1

      The previous senator (retired .... can't even remember his name now) never replied to my follow-up question as to what guarantees there were with Social Security. I wrote in favor of partial privatization of SS accounts. The initial reply I got was FUD about the stock market. My return question was (in more elaborate terms ... and some crayon pictures to help him out; well, no crayon pictures, but maybe it would have helped ...) "OK, So tell what certainty and guarantees I will have with SS as it stands?" [sound of crickets still chirping].

      Sadly/ironically, I've had my head so buried in code lately, that I didn't even have time to notice this one, otherwise I would have written in.

      I've not been impressed with O'Malley. Yes, I get to complain, because I did vote ... and not for him.

      --

      Que Deus te de em dobro o que me desejas

      [May God give you double that which you wish for me]

    14. Re:Idiocy like this... by Mr.+Slippery · · Score: 1

      ... is the price that we Marylanders have to pay for returning one-party rule to the state.

      While I'm not happy with one party rule, Erlich did nothing during his term to address the structural deficit (though he rode high on tax revenues from the real estate bubble).

      increased the sales tax by 20 percent, an increase that disproportionately impacts poorer folks

      They did increase the sales tax, but they also lowered income taxes on low earners. How it balances out is a matter of debate.

      --
      Tom Swiss | the infamous tms | my blog
      You cannot wash away blood with blood
    15. Re:Idiocy like this... by Mspangler · · Score: 1

      Is it idiocy? The economy is shifting from goods to services. To tax only the (physical) goods while letting the services off free keeps putting more of the tax load on less and less of the economy.

      Typically, "the rich" use more services than the poor, so that would increase the overall "take" as well, and in a non-regressive manner when compared to a high tax on goods.

      I'm actually surprised the politicians haven't figured this out before.

    16. Re:Idiocy like this... by Ogre332 · · Score: 1

      Finally, someone else in MD that didn't vote for O'Malley.

      --
      Shut up brain or I'll stab you with a Q-Tip. - Homer Simpson
    17. Re:Idiocy like this... by Moridineas · · Score: 1

      Out of curiosity, then, is this the brainchild of the Democrats or the Republicans? Hah, there mere fact that you had to ask shows just how far the GOP has fallen from its glory days!

      And how far the Democrats have yet to fall?
    18. Re:Idiocy like this... by Mike_ya · · Score: 1

      One reason Erlich was elected was that he was pro-slots which never passed in the democratic controlled General Assembly.
      The revenue generated from slots would have gone a long way to addressing the structural deficit.

      Slots go on the ballot next year. They are looking at 5 or so potential locations including one in Baltimore City, but not at Pimlico, the one place slots are really needed the most. That is if horse racing is important to ya.

      So glad I moved out of that state 6 years ago.

    19. Re:Idiocy like this... by log0n · · Score: 1

      O'Malley's a complete asshole. Most of the state didn't really know about him before he was elected. I'm in Baltimore and it's a f*cking dumpster thanks to O'Malley's "mayorship" (is that a word?). And now he's doing it with the state.

      He ran on an anti-slots campaign to beat Ehrlich, but as soon as he took office he did a complete 180 and pushed through (in a special session bypassing citizen/constituent oversight) legalization of slot machines. And along with that a ridiculous amount of new taxation focused almost exclusively on the service and small-business industries. I don't care about the slots, it's about all his blatant lying. He's killing the independent businessman in Maryland, and his other policies are insuring no larger/established corporations are going to want to EVER relocated and base themselves here.

      Maryland already has one of the highest costs of living in the US.. not far behind Los Angeles and NYC. And it's getting much worse. A LOT of people are considering their options for relocating.

      For those who don't know, Gov. O'Malley just forced upon the citizen of Maryland the BIGGEST state tax hike in the history of the United States of America. $1.7 BILLION tax hike for 2008.

      He's a crook and liar.

    20. Re:Idiocy like this... by GottMitUns · · Score: 1

      Exactly, Democratic party always hurts ALL of society rich and poor.

    21. Re:Idiocy like this... by Mr.+Slippery · · Score: 1

      Pimlico, the one place slots are really needed the most. That is if horse racing is important to ya.

      It's not. Cutting subsidies to this dying industry would be an excellent step toward fiscal responsibility.

      Slots are no solution. The argument is that they bring tourists, but if it works Pennsylvania and Virginia and other states will follow until nobody has to leave their home state to gamble, and it becomes just another lottery - a tax on Marylanders who are either bad at math or have poor impulse control. (Except that unlike the lottery, this primarily enriches private interests of the owners of the handful of locations where slots will go.)

      --
      Tom Swiss | the infamous tms | my blog
      You cannot wash away blood with blood
    22. Re:Idiocy like this... by slapout · · Score: 1

      Generally, on slashdot (and digg), if they're complaining about politics, but don't mention a party, its the Democrats. Most people here seem to be left leaning and therefore don't want to say anything negative about the most left leaning party. They'll try to cover it up by saying things like 'yeah, well, both parties are just as bad'. If ya hang around long enough, you start to see thru it.

      --
      Coder's Stone: The programming language quick ref for iPad
    23. Re:Idiocy like this... by Anonymous Coward · · Score: 0

      Indeed. The citizens of Baltimore were faced with a 73% rate hike for electricity.

      Mayor Mc Muscles ran on protecting the citizenship from the increase.

      He gets voted in as Governor, takes a real look at the numbers, talks to a few members of the PSC and then informs us that he just can't do it.

      Sorry!

      We get a 73% rate hike.

      Liar. He panders to the ill-educated ill-informed and those already sucking on the government teat and they vote the bastard in.

      Fuck him.

    24. Re:Idiocy like this... by Doctor+Faustus · · Score: 1

      Like I said in a previous post, it's a lot easier to run on the platform of taking care of the poor if you create more poor.
      And you got a +5 insightful for both. That's a pretty good trick.

    25. Re:Idiocy like this... by LeafOnTheWind · · Score: 1

      A key House committee and the Senate have endorsed O'Malley's proposal to increase the sales tax from 5 to 6 percent and to apply it to a number of services that are now exempt. But the chambers are interested in taxing different services. The Senate bill passed yesterday would apply the levy to computer services and video arcades. Landscaping had been included but was removed after a public outcry. The House Ways and Means Committee, meanwhile, approved a provision yesterday calling for the taxation of auto repairs and an array of other repair services. http://www.washingtonpost.com/wp-dyn/content/article/2007/11/09/AR2007110901244_2.html?nav=rss_metro&sid=ST2007110902532 20%? Truth sucks, doesn't it.
    26. Re:Idiocy like this... by Anonymous Coward · · Score: 0

      He meant that the new tax rate is 20% greater than the prior tax rate, not that sales tax increased by 20%. Put another way, 6% is 120% of 5%, thus the 20% increase.

      - T

  15. Taxes suck by Fuzzums · · Score: 1

    But they help to pay for infrastructure, education, healthcare and maps and such.
    For the future of our children.

    --
    Privacy is terrorism.
    1. Re:Taxes suck by Unlikely_Hero · · Score: 1

      I question whether they pay for the future of anyone's children.
      The healthcare system and educational system in this country are horrifically mismanaged and our infrastructure is aging and in some cases crumbling.
      Maybe some taxes go to keep these services up to token levels but I think the rest lines corrupt individual's pockets

      --
      Happiness does not come from having much, but from being attached to little.
    2. Re:Taxes suck by Anonymous Coward · · Score: 0

      Got to call bullshit on this. What taxes do, in this case, is generate a bigger fund so that the idiots don't have to pay as much attention to what they are doing, when they spend the money. You won't see an improvement in any of these areas, you'll see more spending for scratch-my-itch projects.

  16. Say goodbye to... by DrPeper · · Score: 0

    Say goodbye to your many of your businesses Maryland.

    1. Re:Say goodbye to... by DrPeper · · Score: 0

      And say goodbye my proper english, apparently as well!

      I meant to say "Say goodbye to many of your businesses Maryland."

  17. It's not a sales tax if it applies to services by GnarlyDoug · · Score: 1, Interesting
    If the tax is being applied to services like computer programming, then it is no longer a 'sales' tax. It's effectively a income tax. No goods changed hands here, this is work for hire and services. What next for MD? 'Sales' taxes on mechanics and plumbers?

    To sum up, less attractive to business, higher cost of living, more of the economy goes underground and out of the tax system, precident of selecting specific service industries to be taxed at special rates and the corruption that will engender, and overall economic damage to MD. Brilliant.

    1. Re:It's not a sales tax if it applies to services by Anonymous Coward · · Score: 0

      What next for MD? 'Sales' taxes on mechanics and plumbers?
      Last time I had a plumber out, I had to pay tax... why should programming be any different?
    2. Re:It's not a sales tax if it applies to services by kmarshallbanana · · Score: 1

      Ok, there seems to be a major misunderstanding of the difference between a sales tax and an income tax here. A sales tax is paid on all sales (of both goods and services) and therefore is levied on revenue. An income tax on the other hand is paid only on profit(as dividends/appreciating shares) and wages, that is on revenues minus costs. Hence in this case it is not an income tax. To illustrate why you want it applied to goods and services I give you the example of choosing between buying some computer program and getting it custom programmed for you. If the sales tax is only applied to one or the other then your choice will be 'distorted' towards the other item, hence you want it applied to both.
      To quote wikipedia (http://en.wikipedia.org/wiki/Sales_tax): A sales tax is a consumption tax charged at the point of purchase for certain goods and services ...Ideally, a sales tax is fair, has a high compliance rate, is difficult to avoid, is charged exactly once on any one item, and is simple to calculate and simple to collect. [Emphasis added]
      In summary, yes any decent sales tax will be levied on mechanics and plumbers!

    3. Re:It's not a sales tax if it applies to services by 77Punker · · Score: 1

      Services do pay sales tax. I work in a restaurant, and it pays sales tax. Trust me on this one, I've had an accounting class.

    4. Re:It's not a sales tax if it applies to services by webmaster404 · · Score: 1

      Because programming is producing a "good" not a service, sure they are preforming a service in say programming a shell script but the end result is a shell script, thats my first answer. My second answer is because if the US keeps embracing anti-tech measures with the DMCA, international treaties and now this, they are going to lose jobs to people in Europe, Canada and India who will just use SSH or other means to access computers and fix them remotely.

      --
      There is no "disagree" moderation, and troll, flamebait and overrated are not valid substitutes
    5. Re:It's not a sales tax if it applies to services by GnarlyDoug · · Score: 1
      you're correct, I was thinking that sales taxes mainly applied to goods, not services. Thank you for the correction. Since that is the case though it should also apply to groceries, utilities, banking services, business to business transactions, wholesalers, and all other transactions where money moves and a good and/or service is applied if we're going to be 'fair' about it.

      The other aspect of this is that it will make outsourcing very expensive. Anyone hiring out contracters to do thier programming will suddenly pay a lot more. So small businesses will be hurt a lot more by this tax than larger ones will be. Yeah, that's fair. Let the larger companies with the resources to have in-house programming teams pay less in taxes than the small businesses and individuals who need to contract the work out. If we really wanted to make it 'fair' then shouldn't the in-house programmers have to pay sales tax on their salary? After all they're still charging for a service. The fact that they entered into a private contract to be an employee should let them escape paying sales tax on the services they provide when someone else doing the same work as a contracter or a small business has to charge thier customer an extra 6% sales tax for the same work? I don't see how that is 'fair'. Seems to single out the self employed programmer and software houses for hire to me. Given that the self employed already also pay more in other taxes such as social security, it seems that sales taxes are just another way to help create a situation that favors large corporations.

    6. Re:It's not a sales tax if it applies to services by innocent_white_lamb · · Score: 1

      Because programming is producing a "good" not a service,
       
      And the plumber installing your new toilet is doing exactly what that's different than you installing my new software? One way I get something I can flush, the other way I get something I can count the flushes with.

      --
      If you're a zombie and you know it, bite your friend!
    7. Re:It's not a sales tax if it applies to services by kmarshallbanana · · Score: 1

      Thats true on the inhouse versus external programmer point. The one thing that does help avoid this situation is that many sales taxes are set up so that all non-final goods (like steel, plastic, most programming etc.: as opposed to final goods like tvs, radios, google search) basically pay that sales tax initially and then get it refunded at tax time so for example since programming is generally an input it is likely that the sales taxes paid will be refunded at the end of the tax year. The ways they generally try to set up the system is so that at the end of the day most transactions between firms don't get sales taxed while those to customers will be taxed. (Otherwise you get what is called cascading, that is the magnification of the size of the sales tax because it applies, for example, first to steel, then to engines, and then again to cars). This should help to avoid the incentive you mention of otherwise trying to do everything inhouse.

  18. Saskatchewan by innocent_white_lamb · · Score: 1

    We have had 5% Provincial Sales Tax on computer programming services in Saskatchewan for a few years now. And the 6% Federal GST as well.

    --
    If you're a zombie and you know it, bite your friend!
    1. Re:Saskatchewan by otis+wildflower · · Score: 1

      And that's why when I think of a dynamic high-tech destination, I think "Saskatchewan".

    2. Re:Saskatchewan by innocent_white_lamb · · Score: 1

      Actually, you might be surprised. There is actually a reasonable-sized IT industry here. Relatively speaking, of course.
       
      It's my understanding that we have some of the cheapest, most reliable and "best" Internet access anywhere in North America -- almost every small town with a population over about 300 or 400 people has high-speed unlimited DSL service available from Sask Tel for about $45 per month.

      --
      If you're a zombie and you know it, bite your friend!
    3. Re:Saskatchewan by otis+wildflower · · Score: 1

      Fair 'nuff, but with taxes like that it's likely jobs will be elsewhere, such as Vancouver (all I ever saw was Windoze work there though) or Calgary (visualization ftw).. I mean, you look at, say, western NY.. Tons of universities, lots of connectivity, but WTF are the good tech jobs? Only things keeping that area afloat are NY state subsidized jobs and cross-border shopping.. And the people who refuse to move or who can't sell their houses for enough $$$ to live anywhere else in the country. But those folks' kids are by and large not coming back..

  19. daydreaming by oliphaunt · · Score: 4, Funny

    If only there was some way to write the code out-of-state, and then transfer it to the buyer in Maryland... ... like a big series of tubes ...

    --




    Humpty Dumpty was pushed.
    1. Re:daydreaming by ScrewMaster · · Score: 1

      If only there was some way to write the code out-of-state, and then transfer it to the buyer in Maryland... ... like a big series of tubes ...

      Yes, well ... that's the thing isn't it. Nobody is saying that custom programming cannot be done via outsourced projects (I've done a few jobs that way and it's unlikely I'll ever do it again.) What is relevant is that States claim they want to keep good jobs in-state for their residents. I mean, those are the people whose best interests the Legislatures are supposed to serve. Then they pull crap like this which obviously has the express purpose of encouraging the export of said jobs to other States or even overseas so the whole country loses out. Why does it seem that the United States is deliberately shooting holes in both feet? Good job, Maryland. Makes me regret that I spent the first eleven years of my life there. Of course, odds are they need the money to pay for educating and caring for their illegal alien population, and if thousands of programmers and tens of thousands of businesses get shafted, who really cares?

      Also, you have to realize that outsourcing custom development is no panacea, and is fraught with problems. I've been doing this for twenty-seven years now, and no matter what anyone tells you, you're much better off having your hired programming talent able to come in and deal with your people and products directly. Sending code via The Tubes(tm) just doesn't cut it, because there are substantial hidden (and not so hidden) costs that are involved when dealing with non-local development staff. Frankly, it sucks, you don't get to know the people and you have no idea if you can trust them, or they you. Don't undervalue the power of personal relationships and face time when it comes to the contracting game. The Internet is simply no substitute for that, and never will be.

      Furthermore, if you do what I do, which is write real-time data acquisition and process control systems, you really can't do it remotely. You have to work with the equipment, have to be on site. Sure, you can fly someone in to do the work, but that just adds to your costs and adds to your deadlines when you could have just hired a competent developer who lives in the vicinity. Worse, when you need support and your programmer is a few thousand miles away ... well, now things get really expensive. Nobody with half a brain (or any understanding of the consequences) really wants to outsource: the only benefit is financial and that is by no means guaranteed. Odds are you won't get better quality code, and God help you if you need maintenance.

      I'm sorry to say it but in this regard, my home State is full of little red ants. I'm damned glad I don't live there anymore. Idiots.

      --
      The higher the technology, the sharper that two-edged sword.
    2. Re:daydreaming by Mr.+Slippery · · Score: 1

      and then transfer it to the buyer in Maryland... ... like a big series of tubes ...

      And then the buyer pays the use tax. So where's the difference (other than that use taxes are easier to cheat on)?

      --
      Tom Swiss | the infamous tms | my blog
      You cannot wash away blood with blood
    3. Re:daydreaming by Red+Flayer · · Score: 1

      Just in case you were thinking of committing tax fraud...

      Sales and Use tax is not assessed in the location where the good is created, it is taxed in the location that it is delivered (sales tax) or used (use tax).

      --
      "Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
    4. Re:daydreaming by Anonymous Coward · · Score: 0

      Sales and Use tax is not assessed in the location where the good is created, it is taxed in the location that it is delivered (sales tax) or used (use tax).

      And that is why it should be hosted on a server in another State! :-)

  20. Yay Maryland! by Bluesman · · Score: 5, Insightful

    Having lived and owned a home for nearly ten years in Maryland, one of the most taxed states in the nation, this doesn't surprise me in the least.

    It's one more reason for those heavily dependent on government services to flock to and continue to live in the state, and those who are actually productive to leave. And it's a downward spiral, they'll kill their small businesses and find new things to tax when they can't balance the budget for the umpteenth year in a row.

    But the people of Maryland will keep voting the same bozos into office that will continue this spiral. Watching the election ads there was hilarious -- they catered to imbeciles like I've never seen -- and it worked.

    Hell, it's a microcosm for our entire stinking, failing republic-turned-democracy.

    Man, I'm bitter. But who wouldn't be?

    --
    If moderation could change anything, it would be illegal.
    1. Re:Yay Maryland! by rm999 · · Score: 1

      I think you exaggerate, Maryland is one of the wealthiest states in the country. Ignore Baltimore, and it really is near the top. Taxes don't attract anyone to Baltimore (most people who depend on the services there were born and raised in Baltimore). But strong school systems and good government services do attract people who contribute to the state.

      Yes - taxes can hurt industry, but Maryland is doing great the way it is (ignoring Baltimore!)

    2. Re:Yay Maryland! by thethibs · · Score: 1

      Maryland—Welcome to Canada!

      --
      I'm a Programmer. That's one level above Software Engineer and one level below Engineer.
    3. Re:Yay Maryland! by Bluesman · · Score: 3, Insightful

      Admittedly I haven't been keeping up with recent Maryland history, as further research indicates they had a budget surplus of $1.3 billion last year. I'm assuming that didn't go to paying off the overall state debt, as they're facing just as huge a shortfall this year.

      Reading more into it, apparently their large surplus was from the booming real-estate bubble. This matches my experience, making a huge profit on the house I bought there before selling at the peak of the market.

      Interestingly, the housing bubble was fueled by massive speculation and ridiculous lending practices, hurting a lot of poor people. Where did this surplus money come from? Well, ultimately, from the Fed which will continue to bail out mortgage lenders. See that dollar's value plummet? Add that to the hidden taxes imposed on every citizen of the country, including those in Maryland who are probably struggling to remain solvent in the disastrous housing market.

      So how rich a state is Maryland really? Were it not for a constant, massive infusion of federal dollars, the state would collapse, starting with Baltimore. Who pays for massive infusion of federal money? The rest of the country.

      Maybe it will continue, maybe it won't. A good long term plan would include measure to make the state of Maryland self-sufficient, but this isn't politically advantageous there. Kind of like the U.S. as a whole.

      This whole house of cards will come crashing down, hopefully not as quickly and as soon as it should.

      --
      If moderation could change anything, it would be illegal.
    4. Re:Yay Maryland! by Moridineas · · Score: 1

      I love comments like "ignore Baltimore" ... Baltimore is what--some 2 million people? That's a pretty large chunk of the state to just ignore! I'm not sure if this is some kind of coded racism or not?? But I've heard statements like yours from a lot of people I know living in MAryland...

      I think MD does have one of the highest, if not the highest, median per capita income. Many of the north east state are right up there--the cost of living is so high that it's a somewhat misleading number. I live in northern virginia and from what I can tell, Maryland is more expensive to live in than VA. I recently moved here from farther south, and with a salary well above what I was making, I can afford much less of a house, pay way more taxes, etc.

      My question is, why should we "ignore Baltimore" --aren't all of those taxes supposed to be helping people? Are they not working?

    5. Re:Yay Maryland! by cain · · Score: 1

      Baltimore's population is 650,000 people. The state of Maryland, the richest state in the country (median income $65,000) is home to 5,600,000 people. The state's poverty rate is 7.8%, the lowest in the nation. I think Maryland can survive a "20% increase" in sales tax. It'll be an even better if all the stingy people outraged by this leave. More good stuff for those who stay.

    6. Re:Yay Maryland! by Moridineas · · Score: 1

      Thanks for correction re: Baltimore's population--I was thinking Metro Baltimore, but the 650k number is really the one that should be discussed--we're still talking over a tenth of the state's population in one city though.

      I find it ironic that you reply to my post, but did you actually READ it? You do the same exact same thing the parent does, ignore Baltimore. The poverty rate in Baltimore according to US census site is 22.9% -- higher than New York City. As I mentioned in my post, the cost of living in Maryland is fairly high--housing costs very high, etc. As far as I know (and please, correct me if I'm wrong) poverty rates are calculated to a national standard--with MD having higher median income and higher cost of living, even the poor are going to be paid more--of course there is going to be a lower poverty rate.

      Not to mention that fact that all your taxes have gotten yourself the #2 murder rate in the country in Baltimore !

      I'm not trying to argue that MD is a bad place or anything--on the contrary, if you're fortunate enough to live in one of the many rich communities outside of Baltimore or some of the rural areas, you've got a pretty nice and well yuppified area! I just don't understand the "let's ignore Baltimore" reflex that so many Marylandians (Marylanders?) have, especially when attempting to justify higher tax rates and government involvement.

    7. Re:Yay Maryland! by rm999 · · Score: 1

      Because I think the GP post was referring to citizens of Baltimore when he said:
      "It's one more reason for those heavily dependent on government services to flock to and continue to live in the state..."

      I was arguing that you have to ignore Baltimore, because most people from Baltimore were born and raised there - they really don't *flock* to Baltimore for handouts, a ridiculous statement. And, continuing to stay on topic, most citizens of Baltimore really are irrelvant to a tax on custom programming and IT.

      Baltimore pays less of a role in the Maryland economy than you think. Its population is about a third of what you think it is, and it only serves to make Maryland look more poor than it is.

    8. Re:Yay Maryland! by rm999 · · Score: 1

      I'm sorry, but you really don't understand Maryland's economy. Yes, Maryland has a liberal, progressive economy. It attracts smart, educated people with (at least a few) excellent school systems, several good Universities, and a lot of industry. Just the biotech companies near DC alone would make many states salivate.

      I'll admit its proximity to DC helps, but not in the way you seem to think. Maryland has a thriving economy that is entirely irrelvant to taxes, real estate or federal hangouts. I honestly have no idea what you base your argument that the state would collapse without federal help. I would like to see you site some sources on your fairly extreme claims...

    9. Re:Yay Maryland! by ebvwfbw · · Score: 1

      But the people of Maryland will keep voting the same bozos into office that will continue this spiral. Watching the election ads there was hilarious -- they catered to imbeciles like I've never seen -- and it worked.
      No so. We had Rob Erlich, a Republican for the past 6 years. He left us with almost a 2 billion dollar surplus erasing the terrible situation Democrat Glendenning left us with. Already O'Malley spent that surplus and brought us nearly 2 billion in the hole. I think they had a fair election after they switched to electronic voting. That is how a Republican got in for the first time since the 1960s. The dead weren't able to vote either. After they figured out how to rig the machines, O'Malley was a sure bet. O'Malley also just raised our sales tax to 6%. Seems to me he also moved the residency down from 181 days to just 90. I don't know what I'm going to do. I'm being mugged by the state and I don't think I can do anything about it. Other than buy lube for the hell of a screwing I'm getting. Worse, a lot of people don't even know it yet.
    10. Re:Yay Maryland! by SonicSpike · · Score: 1

      With a post like that I sure hope you are supporting Ron Paul!

      --
      Libertas in infinitum
    11. Re:Yay Maryland! by Anonymous Coward · · Score: 0

      Interestingly, the housing bubble was fueled by massive speculation and ridiculous lending practices,

      True.

      hurting a lot of poor people.

      Hurting a lot of poor people who bought much more house than they could afford.

      Where did this surplus money come from? Well, ultimately, from the Fed which will continue to bail out mortgage lenders.

      Which mortgage lenders has the Fed bailed out? None that I'm aware of.

    12. Re:Yay Maryland! by Moridineas · · Score: 1

      Because I think the GP post was referring to citizens of Baltimore when he said:
      "It's one more reason for those heavily dependent on government services to flock to and continue to live in the state..." I would think it far more likely the GP was referring to the HUGE influx of illegal immigrants in certain DC-area jurisdictions.

      And, continuing to stay on topic, most citizens of Baltimore really are irrelvant to a tax on custom programming and IT. They are certainly relevant--what's that tax money for? Didn't MD just pass some major insurance subsidies/legislation? Don't you think that a very large percentage of Maryland's uninsured live in Baltimore, and that they'll be getting the lions share of the money? Where tax money goes seems hugely relevant to me!

      Baltimore pays less of a role in the Maryland economy than you think. Its population is about a third of what you think it is, and it only serves to make Maryland look more poor than it is. While I acknowledge you're 100% right, and I was totally wrong about Baltimore's pop (I was thinking metro area..) ... you're again displaying the exact "ignore Baltimore" attitude I'm talking about! I mean seriously "it only serves to make Maryland look more poor than it is" ?! Come on, that even sounds ridiculous. I'm absolutely serious that when I say--as someone not from Maryland or "the area" natively--that when native Marylanders make that kind of statement it really comes across as racist or at the very least bigoted (it sounds horribly like "ignore those blacks in Baltimore, they just make Maryland seem poorer than it is"). I'm not trying to accuse you of racism or anything like that--I know absolutely nothing about you and even if I did wouldn't presume to judge you like that.. I'm just saying what it always sounds like to me..

      Of course merely by saying this, since race / racism is such a tricky topic, it looks like a personal attack on you... so, I preemptively apologize :p
    13. Re:Yay Maryland! by rm999 · · Score: 1

      Baltimore actually has a large poor white population, so I wasn't even thinking of race when I said "ignore Baltimore."

      The reason why I say ignore Baltimore is that it's so unlike the rest of Maryland. It contains a small % of the population, but it still biases statistics when talking about policy, economy, etc. After moving from the suburbs of Maryland to Baltimore, I realized that Baltimore has problems that are very deeply rooted and unrelated to the rest of the state. Unlike most cities, Baltimore is not contained in a larger county, so it manages itself. Majority of the state lives in dense suburbia in the triangle from DC, Baltimore, and Annapolis, and most policy decisions made by the state are made with this area in mind.

      If the original poster intended to talk about immigrants near DC instead of Baltimore, then this is all irrelevant anyway ;)

    14. Re:Yay Maryland! by cain · · Score: 1
      You wrote:

      I find it ironic that you reply to my post, but did you actually READ it? You do the same exact same thing the parent does, ignore Baltimore.
      Oh the irony. From my post:

      The state's poverty rate is 7.8%, the lowest in the nation.
      Last time I checked, Baltimore was in the state of Maryland. Did you read my post?
  21. The Feds are in DC by hotsauce · · Score: 1

    Um, no. The feds are in DC.

    And most programming shops in the area are in Northern Virginia. The few that are left in Maryland will move to Virginia, too.

    The only programming strength Maryland has is in Biotech, and there's no reason that can't move to Virginia, too.

    1. Re:The Feds are in DC by Anonymous Coward · · Score: 0

      Plenty of feds work in Maryland -- Social Security, for example.

    2. Re:The Feds are in DC by Anonymous Coward · · Score: 0

      Examples abound: NSA is a huge one. Plenty of companies with large federal government contracts do business in Maryland.

      If it weren't for the huge infusion of federal money, the state would be in more desperate financial straits than it already is.

    3. Re:The Feds are in DC by INT_QRK · · Score: 1

      Not sure what you mean by "the Feds are in DC." Some are, some aren't. For example, the Pentagon and CIA are in Virginia, the NSA is in MD, and actually federal agencies are distributed all throughout the region. DC is a relatively small-to-medium size city (pop. ~400k). The surrounding VA & MD region is about 5 million. Something else to keep into perspective is that most of the federal development spending that accrues to this region goes to companies either in MD or VA (or even WV). Since the government doesn't produce anything directly, but just contracts to private industry to do any development, then companies with the lowest bid, ergo overhead, will be advantaged. That means that some migration will likely occur, with companies (which might very well be incorporated elsewhere anyway, for example Delaware), can easily just end their office space lease in MD and lease VA office space, with their workers just changing their commute route. Maybe exchanging an inner-loop to work outer-loop home, to outer-loop to work, inner-loop home on the Beltway. Whatever. No problem.

    4. Re:The Feds are in DC by ClarkEvans · · Score: 1

      No. A huge amount of the federal government, including just about all of the NIH, CIA are in MD. The parent poster is absolutely correct. There is also the "use tax" to be contemplated, the headline discussed hiring from other states (or countries) -- you can't get around sales tax that way. Frankly, it's a brilliant move by MD. They could even turn 5-15% of the revenue around into IT grants... bringing IT companies *into* MD. Sales tax is done on the purchaser, not on the seller.

    5. Re:The Feds are in DC by KlomDark · · Score: 1

      Yah, that always works, they never put money back into where they sucked it from (aka dont shit where you eat) - Here in Nebraska, they paid for this monstrous sports center in Lincoln with nothing but taxes on cigarettes. But guess what, even though smokers paid for the damn thing all by themselves, nobody is allowed to smoke there. What a steal from the poor (who tend to smoke more) and give to the rich (who tend to smoke less) scam that was.

    6. Re:The Feds are in DC by KlomDark · · Score: 1

      Oh, that probably sounded completely out of context. I was referring to where the parent message said "They could even turn 5-15% of the revenue around into IT grants... bringing IT companies *into* MD." - A great thought, but sadly it never works that way.

    7. Re:The Feds are in DC by ConceptJunkie · · Score: 1

      I live in Northern Virginia: more jobs for me. This is another in a long line of gifts that the People's Republic of Maryland has given to the businesses of Virginia. I don't know why they love us in the Old Dominion so much, but I'm sure glad they do.

      Maryland is turning into Massachusetts. Sure, their roads may be better than Virginia. In fact, you have to go to Pennsylvania to find _worse_ roads than Virginia, but I'd rather live in a state, er, commonwealth, that supports the idea of enterprise and freedom. It seems more American.

      --
      You are in a maze of twisty little passages, all alike.
    8. Re:The Feds are in DC by BiggerBadderBen · · Score: 1

      You're right. Oh, except for NSA, NIH, SSA, NASA.... maybe the thousands upon thousands of engineers and IT people in these agencies don't count.

    9. Re:The Feds are in DC by Kumba · · Score: 1

      CIA is in Langley, actually, just off the GW Parkway in VA. But you won't find them on Google Maps very easily.

    10. Re:The Feds are in DC by timothy · · Score: 1

      If they'd switch to a sales-tax only regime (along the lines of what there is in Washington, Nevada, Florida, New Hampshire, Tennesee, and a few others), Virginia is a state I'd definitely consider living again -- Blacksburg is a nice little town, and there are beautiful mountains, a nice stretch of beach, etc.

      Income taxes all suck worse than sales taxes, even though this one sure sucks for Maryland (and Maryland's programmers, esp.).

      timothy

      --
      jrnl: http://tinyurl.com/c2l8yr / foes: http://tinyurl.com/ckjno5
    11. Re:The Feds are in DC by ConceptJunkie · · Score: 1

      I went to Virginia Tech in the 80's so I am very familiar with Blacksburg. It is one of many picturesque towns and wonderful places to live in the Old Dominion. I've also lived in Richmond, which is a really cool town. I'd love to move back someday, but I've been in Leesburg for 9 years and really love it here too.

      --
      You are in a maze of twisty little passages, all alike.
  22. state constitution by arbitraryaardvark · · Score: 1

    Art. 10. That freedom of speech and debate, or proceedings in the Legislature, ought not to be impeached in any Court of Judicature.
    Art. 40. That the liberty of the press ought to be inviolably preserved; that every citizen of the State ought to be allowed to speak, write and publish his sentiments on all subjects, being responsible for the abuse of that privilege.

    1. Re:state constitution by Unlikely_Hero · · Score: 1

      maybe Maryland took a cue from Bush, perhaps the Governor views the Maryland Constitution as just a piece of paper.

      --
      Happiness does not come from having much, but from being attached to little.
  23. Milkin' the BRAC cow? by otis+wildflower · · Score: 1

    Methinks the gov wants to prepare for BRAC and have the mechanisms in place to milk all those new jobs..

    Here's hoping Delaware isn't so stupid as to not take advantage of this.. Especially with the housing armageddon fixing to annihilate a ton of credit-related jobs...

    1. Re:Milkin' the BRAC cow? by couchslug · · Score: 1

      Bingo!
      Besides capturing the bennies from the current BRAC process, they'll be ready when future base consolidation brings in fresh units.

      --
      "This post is an artistic work of fiction and falsehood. Only a fool would take anything posted here as fact."
  24. Pah! by beadfulthings · · Score: 1

    I can look out of my window and across the Inner Harbor to "Tide Pointe," which is supposed to be Baltimore's pride-and-joy "technology incubator." We also have a new "technology high school" somewhere in the city; a sexier term, I guess, than the old "Polytechnic" of yore. I guess the technologies--and the technologists-- will now be incubated in Delaware. Some friend sent me a list of fifty appropriate new state mottoes. Maryland's is now even more appropriate: "Maryland--if you can dream it, we can tax it."

    --
    "Here's what's happening. You're starting to drive like your Dad..." - Red Green
    1. Re:Pah! by tallgeese · · Score: 1

      mmmm...Tide Point...Harvest Table...yum. Anyway, could remoting be used to get around this tax? 1. Remotely log into your development site in Delware. 2. Do your coding/debugging. 3. Make deliverables available via website, and the ocassional in-person visits with your customers. Too simplistic? Dumb idea? Never mind....

  25. Expensive lawn care, free programming by athloi · · Score: 5, Funny

    Hi, I'm in Maryland, and I'll cut your lawn for $25,000 and throw in a custom eCommerce system absolutely free!

    1. Re:Expensive lawn care, free programming by Urd.Yggdrasil · · Score: 1

      Scalpers have been doing that around here for years, buy a red ribbon for $100 and get a ticket free!

  26. trapped by mugnyte · · Score: 1

    It'll be a long time before the state feels the pain of this - its simply too good for them to pass up. MD is a host to many gov subcontractors that write *nothing but* custom code for projects. They'll feed off of the teat of subcommittee wins for those projects until nearby states figure out a way to coax those offices over the border. Probably to Delaware, which is traditionally business-friendly (although trending away).

      So frankly, this simply crunches the contractor work a bit. Many feel it is just closing a loophole.

      What I want to know is how does one define "customization" ? Macro? Shell script? showing someone how to download something? installing something? Eh...

    1. Re:trapped by superwiz · · Score: 1

      What I want to know is how does one define "customization" ? Macro? Shell script? showing someone how to download something? installing something? Eh... Pretty sure it would be anything not offered at a standardized price to general public as an already-developed product. Which begs the question, does Internet access modify your computer?
      --
      Any guest worker system is indistinguishable from indentured servitude.
  27. Maryland SUCKS!! by R2.0 · · Score: 1

    No, really - I live here, and this is just the latest. This is part of a plan to cover a $1B+ gap in the budget. The new Governor proposed raising taxes to cover the gap AND increasing spending on various social programs. Spending cuts? Not even on the radar.

    Even better is that 90%+ of the tax burden falls on 1 county (albeit one of the richest ones in the country). And the county delegates to the legislature - you know, the ones who represent the citizens - offered token resistance then rolled over and took it "for the good of the Democrats...errr, the State".

    --
    "As God is my witness, I thought turkeys could fly." A. Carlson
  28. Another round of "Name that party" by Anonymous Coward · · Score: 0

    hmmmmmmmmmm, you forgot to name what 1-party rule you are living under.
    Would it be the party of, as some of my friends call him, The Jew Puppet Bu$Hitler Chimpy McHaliburtin?

    No?
    Really?

    I thought that party was the fount of all evil and Goldsteinism.

    Well they certainly can't be Democrats.

    1. Re:Another round of "Name that party" by Anonymous Coward · · Score: 1, Insightful

      When there is only one party, it quickly ceases to matter which it is.

  29. Opportunity! by hdparm · · Score: 1

    I think I shall start advertising in Maryland. Remote support (linux,windows), rsync backups, VPNs, Desktop support... NZ$ fees will look more attractive than when buying these services from other States, too.

    1. Re:Opportunity! by Mr.+Slippery · · Score: 1

      I think I shall start advertising in Maryland.

      Read up on "use tax" before you make your business plan. Maryland companies can't avoid the tax by going out-of-state.

      --
      Tom Swiss | the infamous tms | my blog
      You cannot wash away blood with blood
    2. Re:Opportunity! by hdparm · · Score: 1

      Well, 5% on NZ$ fee 5% on US$ fee.

      Of course, I wasn't too serious because I'm too small but it's an interesting idea, anyhow.

  30. Here in Illinois by ScrewMaster · · Score: 5, Insightful

    They tried the same thing here in my State: so far it's been voted down. Our Governor claimed that the State could bring in an extra 50 million a year if they taxed such services. That would only work for a year or so, because all the people like me would immediately look for greener pastures. I mean, for crying out loud, if the goal is to efficiently remove the ability of in-state companies to avail themselves of local software talent, this is a great idea. From any other perspective, it's just mind-bogglingly stupid.

    In any event, I'm really tired of our taxing bodies looking for every possibly opportunity to increase their take, regardless of the effect it will have on the local population. Only a complete fucktard who is totally ignorant of what he or she is doing could possibly propose such regulation. Of course, I just described your typical politician. They are ignorant and they really don't care.

    I did some contract work recently (software only), and the head accountant requested my Tax I.D. so they could apply the proper sales tax. I told them they couldn't have it because, as of this date, custom software was not taxable. Had my lawyer verify that, and I faxed them a copy of the appropriate language (right from the Department of Revenue Web site.) They were surprised, because they had been told by their people that custom software was taxable. I figure I saved them some few bucks.

    --
    The higher the technology, the sharper that two-edged sword.
    1. Re:Here in Illinois by king-manic · · Score: 1

      They tried the same thing here in my State: so far it's been voted down. Our Governor claimed that the State could bring in an extra 50 million a year if they taxed such services. That would only work for a year or so, because all the people like me would immediately look for greener pastures. I mean, for crying out loud, if the goal is to efficiently remove the ability of in-state companies to avail themselves of local software talent, this is a great idea. From any other perspective, it's just mind-bogglingly stupid. Sort of like simcity, where you raise the tax the day before the end of the month.
      --
      "There are more things in heaven and earth, Horatio, than are dreamt of in your philosophy."
    2. Re:Here in Illinois by Lord+of+Hyphens · · Score: 1

      Here's a copy of the regs for IL: Title 86 Part 130 Section 130.1935 Computer Software http://www.revenue.state.il.us/LegalInformation/regs/part130/130-1935.pdf

      --
      "I've spent my whole life figuring out crazy ways to do things. It'll work." -- Montgomery Scott, "Relics"
    3. Re:Here in Illinois by stmfreak · · Score: 1

      Only a complete fucktard who is totally ignorant of what he or she is doing could possibly propose such regulation. Of course, I just described your typical politician. They are ignorant and they really don't care.

      Worse, they actually do care and have only the best intentions. However, like the majority of the human species, they lack the ability to form accurate cause->effect predictions around the most basic of behaviors. For any choice of actions with a consequence-time-horizon more distant than the next board meeting, the selection process is basically random--with heavy steering from the vocal minority in attendance at that time.

      --
      These opinions guaranteed or your money back.
    4. Re:Here in Illinois by Bluesman · · Score: 2, Insightful

      "Worse, they actually do care and have only the best intentions."

      I used to completely disagree. I figured that someone who could get elected to a prominent political office couldn't possibly be that stupid and must be deliberately making poor decisions in the interest of looking good and getting re-elected.

      Then I received a letter in the mail written by Annapolis mayor Ellen Moyer, congratulating the populace on weathering a hurricane. It was so poorly written that after reading it I was certain she had been educated in the Annapolis public school system and must have just squeaked by.

      I guess you really can never attribute to malice what can be explained by incompetence.

      --
      If moderation could change anything, it would be illegal.
    5. Re:Here in Illinois by westlake · · Score: 1
      That would only work for a year or so, because all the people like me would immediately look for greener pastures

      Where do you go when all the pastures turn the same shade of green?

      Where do you go when the best paying jobs go to those who understand local conditions?

      The real property law of New York. The tax structure of Virginia.

  31. I don't get your arguments by Anonymous Coward · · Score: 1, Funny

    Many many many posters on Slashdot are leftist/progressive's. This is your chance to increase the redistribution of wealth. You should thank Maryland by moving there and doing contract work.

    1. Re:I don't get your arguments by KudyardRipling · · Score: 2, Insightful

      It's OK to be generous with other people's money, but when it comes to their own bottm line...Gee...they are no different than Rush Limbaugh.

      --
      Submission as evidence constitutes plaintiff and/or prosecutorial misconduct.
  32. Lets tax dying markets !! Smart move MD by Anonymous Coward · · Score: 0

    Well, it's not as if anyone is still using domestic programmers anyway. So much for Maryland's chances on getting more computer science students.

    Just more reasons to pretend your disabled and collect money from the state.

  33. Get real! Why should one business be favored ... by trolltalk.com · · Score: 0, Flamebait

    FTFA:

    The measure increases sales tax by 1% and adds computer support services, data center support, custom programming, consulting, and disaster recovery services to the list. Legislators approved the change as part of a tax package they passed early Monday morning.

    In other words, It will now have to pay its fair share of taxes, same as other businesses.

    Why should people who have to shop at WallyWorld pay more than their fair share of taxes, so that IT consultants can pay none?

    Get real! This is totally fair. Or does the IT industry somehow not benefit from the services provided by tax revenues?

    And while you're all at it, better get used to it. There's trillions of dollars in debt that has to be paid back, with interest. Taxes have only one way to go - up! And everyone has to contribute. funny how you all scream about how unfair loopholes are, until someone does a goatse on your own personal loophole.

  34. Insterstate Commerce by johngaltchi · · Score: 1

    The Computing Technology Industry Association should look into filing a case in federal Court claiming the new tax violates the Insterstate Commerce Clause. It might work if they can show that a sufficient amount of the work that will be taxed actually crosses state lines (they'd have to show a number of other things too). It's a longshot, but might be worth a try. In any case, 0% up to 6%?! Good work Maryland legislature. Morons!

  35. It's just awful by tkrotchko · · Score: 1

    Call your representatives. And write them a letter.

    One of mine had a staffer to answer the phone, and she said she felt betrayed by her representative. She said "I don't know what they were thinking; it doesn't make any sense what they did". She urged me to write a letter.

    My other two representatives didn't have the balls to answer the phone.

    For the typical Maryland family, this tax will cost us about $1K-3K per year. Possibly less if you're at the poverty line, but then it hits you harder because you don't have the opportunity to avoid things like sales tax.

    And then increased spending at the same time they just raised taxes by a record amount. They get my vote as the most out-of-touch legislators I've ever been "served" by.

    --
    You were mistaken. Which is odd, since memory shouldn't be a problem for you
  36. A better way to do taxes by Anonymous Coward · · Score: 0

    Instead of having governments come up with random laws like this and trying to impose them on the people; why not have the people write the laws?
    http://www.metagovernment.org/
    It just makes more sense.

    1. Re:A better way to do taxes by ScrewMaster · · Score: 1

      Well, supposedly the government is supposed to already be us. That's according to the Constitution and some other apparently outdated documents. I guess that there's been a certain disconnect that occurred somewhere along the way.

      --
      The higher the technology, the sharper that two-edged sword.
  37. Is it really a big deal? by Bitsy+Boffin · · Score: 1

    You'll have to excuse my ignorance here, but in NZ we have GST (like many other countries) at 12.5% on all goods and services (with only a couple of exceptions), but naturally those who supply goods and services effectively do not pay the GST on the goods and services they procure during the course of the business activity as GST is a tax on the end-of-the-chain (the GST they paid to thier suppliers is deducted from the GST they recieved from thier customers before they remit it to the inland revenue).

    I would have assumed that the various "Sales Taxes" in the states worked in a similar way, that being a tax for the consumer, not the supplier.

    In that case, as "custom programming" is really not something your average consumer needs, but more often something your average business (supplier) needs, isn't it mostly a moot point, as the supplier wouldn't effectively be paying that tax anyway? Or is "Sales Tax" levied to all, and not reclaimable by registered suppliers, that would seem to be pretty crazy as it would be being levied at each level of the supply chain!

    --
    NZ Electronics Enthusiasts: Check out my Trade Me Listings
  38. MIchigan screwed too by DreadSpoon · · Score: 1

    Michigan recently passed a law that, among a great many other things, also adds sales/service tax to any kind of out sourced IT work. The law is being reconsidered after the massive outcry from various other industries that also got hit by this nonsense. Michigan is by far the worst state in the union in terms of jobs and economics, and our idiot governor decides to pass legislation that makes businesses even less likely to grow and flourish in Michigan. I mean, who's going to contract to someone who has to add a 6% tax to everything he does? I can't just "eat" the cost, since in the global IT market I'm already working for dirt fucking cheap, so there's no way I can match the rates other contractors offer _and_ pay the 6% tax. Thankfully this will soon (hopefully) be shot down in Michigan again, and hopefully people in Maryland manage to fight the stupidity there, too.

    1. Re:MIchigan screwed too by funaho · · Score: 1

      Don't forget you'll need a tax ID too, if you don't already have one. Personally if I have to pay this extra 6% I'd rather take the hit as income tax, because at least that I don't need to track and file separately.

    2. Re:MIchigan screwed too by Anonymous Coward · · Score: 0

      This is the same governor who spent millions renovating/redecorating the Governors "Palace" her first term in office... Yet she was re-elected.

      In cohoots with the Mayor /"gangsta" from Detroit who goes around partying at the expense of tax payers... note the BLING in his ears.

      People here are so ass-fucking stupid they keep electing these idiots in to office. Or maybe they prefer living off welfare and dodging bullets on the way to the bus stop. They get what they deserve. Unfortunately, us in suburbia are stuck along for the ride.

      I don't give a shit, they can pass all the laws they want... I'm not paying them another cent... I already pay a self-employment tax. Pay %6 coming and going? +property taxes +city taxes +millages for this and that ass hat's raise... every year theres something new the police need like urban assualt vehicles ect... its beyond rediculous.

      ?

    3. Re:MIchigan screwed too by LabRat007 · · Score: 1

      Not to worry. It looks like Michigan has come to its senses. http://www.mlive.com/news/grpress/index.ssf?/base/business-0/1195614303284600.xml&coll=6

      --
      "Capital punishment makes the state into a murderer. Imprisonment makes the state into a gay dungeon-master"
  39. How will freelancers do this? by xENoLocO · · Score: 1

    If you freelance in maryland, do you now have to apply for a business license? I assume you have to collect the 6% tax yourself and pay it to the state quarterly, like you would do for sales tax as any other business... thing is you need a federal employee ID number to do that...

    What a giant pain in the ass...

    --
    "The need to build the internet comes from something inside us, something programmed... something we can't resist."
    1. Re:How will freelancers do this? by Mr.+Slippery · · Score: 1

      I assume you have to collect the 6% tax yourself and pay it to the state quarterly, like you would do for sales tax as any other business... thing is you need a federal employee ID number to do that...

      The federal number you're thinking of is an employer identification; you don't need one to file sales taxes. You only need one if you have employees, or if you form a corporation or partnership, or in a few other special cases.

      --
      Tom Swiss | the infamous tms | my blog
      You cannot wash away blood with blood
  40. What's the difference? by Trailer+Trash · · Score: 1

    Here in TN, we tax custom software. To the law, there's no difference between something I write, and going to the store and buying something off the shelf. Most of my clients are out of state, so it hardly matters, but it's a pain to deal with it every quarter. I had a friend who doesn't charge tax, the state went after him, and he got a judgement against the state (they had to pay him), so the laws aren't 100%.

  41. Thanks to my great state or Maryland by Anonymous Coward · · Score: 0

    Leave it to my state (one of the most heaviest taxed in the US.) to completely screw itself. Like mentioned before the tax to "help the poor" is also a burden to poor. We are going from 5% to 6% sales tax. Then this brain far move. This is to drive out business from Maryland. Mr Omalley is an idiot. Blames everything on previous administration which followed budgets. Fought Slot machines tooth and nail before he was elected now acts like he thought of it. Yes typical politics. What is to stop business from farming to out of state contracters? Well Mr idiot will figure out in about 3 years this move lost the state of Maryland Income tax revenue. My guess this will hurt FAR MORE in the short run and long run. But hey He will never figure it out as he will be living on state retirement in 4 years. So what does he care

  42. Re:Get real! Why should one business be favored .. by PitaBred · · Score: 1

    Except that you're comparing apples with oranges. Way to go, troll. The programmers still have to pay sales tax, just like everyone else. The issue is that they're now taxing their services, which will basically start limiting the availability of those services and eliminate their associated jobs in-state since companies will now either farm out the work, bring it in-house, or just not do it.

  43. Taxes won't stop us from catching you, Senator! by Bushido+Hacks · · Score: 1

    Something suspicuous is going on if government wants to tax custom computer programming. Pehaps they don't want us to find out what else is on that pork bill. A new yacht for some shady senator. A government kick back for some big software company. A cover-your-ass move by some cowardly lawmaker who thinks that a tax will stop computer programmers from finding out why they are getting hit with a 6% tax for the job that they do.

    In the near future, expect an investigation as to why the government thinks they can slow down an industry by passing a bill. In the near future, expect no mercy from the men and women who work behind the keyboard.

    --
    The Rapture is NOT an exit strategy.
  44. Re:Get real! Why should one business be favored .. by etymxris · · Score: 1

    Why should people who have to shop at WallyWorld pay more than their fair share of taxes, so that IT consultants can pay none? I'm not sure that programming services deserve to be exempt from taxes, but this plan is likely to backfire. All the IT consulting services will simply move out of Maryland since their bids will be 6% higher than everyone else's. It's a bad idea to be the only state to tax a highly mobile industry like programming services. Someone else said that the IT service industry can't move out of state, but that's not true at all. The NYC company I worked for a few years ago did IT consulting for some D.C. companies. If they need someone on site for long periods of time, then the out of state firm will simply hire a local support tech. But since he works for an out of state firm, no 6% tax will apply even though he and the local firm are in Maryland.

    And it's not like state or local governments operate with any sense of fairness when it comes to taxes. Often people building an industrial plant will shop around to find the state or locale that gives them the largest tax breaks--there's no way that can be fair to the smaller businesses that don't have that kind of clout.

    And while you're all at it, better get used to it. There's trillions of dollars in debt that has to be paid back, with interest. Taxes have only one way to go - up! The federal government is trillions of dollars in debt. State taxes, which this article is about, make no difference to the national deficit.
  45. 49 other states: YES! by wardk · · Score: 1

    wow, nice work Maryland

  46. From TFA by Evets · · Score: 1

    The measure increases sales tax by 1% and adds computer support services, data center support, custom programming, consulting, and disaster recovery services to the list.


    Custom programming is one thing and that kind of a move would certainly make me leave the state. Computer Support Services, Data Center Support, and Disaster Recovery Services however are the big ones IMO. It looks like Best Buy is going to have to pay sales tax for the Geek Squad - which they probably were charging anyways. But what about call centers and data center services? Those companies compete nationally or at the very least with like businesses in surrounding states. Certainly, no new call centers will pop up in the state, and a new data center provider would have to think long and hard about starting up in a nearby state instead.

    Use tax aside, businesses also have to worry about costs to out-of-state customers. The use tax makes it more difficult for in-state businesses to avoid the tax, but the tax itself puts in-state companies at a disadvantage when competing for customers that don't have a presence within Maryland.

    Further, for businesses that utilize IT services a great deal, the tax provides incentive to leave the state. 6% on custom programming? That could increase costs for medium businesses by more than $100K /year. That's not a huge number, but it is a number that will get people researching other locations. This isn't just something that provides a disincentive for IT companies from starting up in Maryland, it is a tax that provides an incentive for all companies that use IT services to leave the state.
    1. Re:From TFA by Anonymous Coward · · Score: 0

      "Use tax aside, businesses also have to worry about costs to out-of-state customers. The use tax makes it more difficult for in-state businesses to avoid the tax, but the tax itself puts in-state companies at a disadvantage when competing for customers that don't have a presence within Maryland."

      I'm confused. If I in Maryland sell the taxable service to an out-of-state customer and I don't have a nexus in his state, why would I have to charge tax?

    2. Re:From TFA by Evets · · Score: 1

      Assuming the work is performed in Maryland, then the answer is yes.

      Not charging taxes on goods sold to an out of state entity is a grey area at best. If you call the Franchise Tax Board, they will tell you that sales tax must be paid - at least that's how I've been told things work here in California.

      Taxes on services, however, are much more clear. You pay the tax based on where the service is performed.

  47. Re:Get real! Why should one business be favored .. by smbarbour · · Score: 2, Insightful

    No, that's not what will happen. Let's use some hypothetical figures:

    Company A writes software and troubleshoots computers, Company B mows lawns.

    Let's say in Maryland sales tax is 6% and corporate income tax is 25%.

    If Company A does $100,000 worth of business, they will now need to pay 25% income tax and 6% sales tax.

    If Company B does $100,000 worth of business, they will only pay the 25% income tax.

    At the end of the year Company A pays out $31,000 in taxes, while Company B pays out $25,000.

    You may say this is fair since Company A could be considered to be selling a product. If Company A ONLY does troubleshooting, they will still pay $31,000. Does this seem fair to you?

  48. There are no permanent jobs by jhoger · · Score: 1

    Repeat after me:

    There is no such thing as a permanent job.

    Remove that phrase from your lexicon.

    Employment is at-will. Anyway, businesses come and go.

    Contracting is the way this industry is going and I think that is a good thing. Billing by the hour engenders more professionalism on both sides of the equation. Normally employers look at young engineers as a safety valve for inability to plan the project. They have no life, so we can wink/nudge them into working way past 40 hours. Billing by the hour, contractors know that they have to produce in the alloted time.

    So I wouldn't look at anything that pushes us away from healthy use of contractors as being "a good thing."

    Of course, I'm a contractor...

    -- John.

    1. Re:There are no permanent jobs by Tim+C · · Score: 1

      Billing by the hour engenders more professionalism on both sides of the equation.
      You'd think that wouldn't you? However I've worked with a lot of permanent and a lot of contract employees over the years, and on the whole I've seen more professionalism from the permanent staff. That's not to say that I've not worked with some truly excellent contractors, as I have; however I've also worked with some that were truly, truly awful - such as the one who texted the project manager to say he was in hospital with kidney problems, only to be spotted working elsewhere the next day. Turned out he'd written a small fraction of what he'd claimed to have done in the time he was actually on the project too.

      That's just one example, but I have plenty of others. I've worked with some pretty dire permanent employees too mind, but on the whole the worst of the bad ones have been contractors.
    2. Re:There are no permanent jobs by HornWumpus · · Score: 1

      In my experience the very worst are the long term 'permanent employees'. Granted also some of the best, but those eventually become contractors after tiring of fixing the messes of others (for free). They were all good at 'looking professional' though.

      There are bad ones in every batch, but no contractor as bad as some of the permanent employees I've run into could remain employed. I'm talking about net negative producers, not just low producers.

      It's simply a matter of visibility, when you are a budget line item you better produce something useful.

      --
      John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
    3. Re:There are no permanent jobs by jhoger · · Score: 1

      Yeah bad contractors exist but with good management they get weeded out quickly. With bad management, just as with problem employees, folks can fly under the radar for a while.

      If the person lasted very long in that role, you have to wonder about what management was doing as far as checkpoints and milestones.

      That said it sounds like there may have been an issue of expecting the contractor to act like a regular employee. A contractor determines method and means of how their assigned work is completed. The contractor should not have had to lie about working on another job at the same time, since it is not the other client's concern (unless of course there is a conflict of interest of some sort).

      What matters is whether the work gets done when it is needed and within the constraints of the budget. If it wasn't you get rid of the contractor and find another, plain and simple.

      -- John.

  49. You are basically correct by Anonymous Coward · · Score: 0

    I am more familiar with Federal income taxes versus sales taxes but ...

    Sales taxes in the State can cascade.
    Amelioration of this is a function of what gets taxed. So, ideally, the legislature would tax the final products but not the raw goods.
    Whereas under a VAT, you tax everything and then deduct out taxes paid (as you described).

    The main reason for a sales taxes vs VAT is that you can make the sales tax progressive (more rich people get taxed) versus regressive (everyone gets taxed equally), by targeting what gets taxed.

    Here the legislature is taxing essentially taxing raw goods, because as you state, consumers aren't going to get custom software developed.

    You could get around this by doing the software out of state.
    As a technical, "correct answer on the exam" matter going out of state doesn't work because Constitutionally every sales tax must be accompanied with a Use Tax (I'll let you Google). But, in reality, 95% of the population has no idea that Use taxes exist and no one is enforcing them.
    With the growth in Internet (mail order) sales there has been grumblings of enforcing the Use Taxes, but as taxing jurisdictions don't actually line up with zip codes, this is damn near impossible.

  50. Re:Get real! Why should one business be favored .. by Unnngh! · · Score: 3, Insightful

    I would hazard that the majority of IT related services in MD are subcontracted to some branch of the federal government. They are by far the biggest employer around these parts. Unless I'm mistaken, this is not going to have a great impact on government contractors. So it seems like it's really targeted to hurt smaller development/support shops. The entire tax hike has been geared towards smaller organizations and individuals - all the provisions for higher taxes on wealthier individuals were removed prior to the bill passing, as well. Thanks, O'Malley.

  51. Labor is taxed by the income tax already by sauge · · Score: 1

    Maryland is simply double dipping.

    Lets hope it doesn't become an accepted idea.

    But given the country's governments love to spend and are in hock up to their ears we really should expect more taxes to pop out of the woodwork.

    1. Re:Labor is taxed by the income tax already by Dragonslicer · · Score: 1

      Maryland is simply double dipping.

      Lets hope it doesn't become an accepted idea. Wow, what state do you live in where this isn't already the norm? Most states have both income and sales taxes (New Hampshire is the exception closest to me, but prepare to bend over if you own property).
    2. Re:Labor is taxed by the income tax already by trolltalk.com · · Score: 1

      Be happy you're only getting hit with 6%. Where I live, he combined sales tax is 13.95%, applied to all goods and services with the exception of basic groceries and rents.

  52. Oh goodness by tthomas48 · · Score: 0

    What a lot of anti-tax doom and gloom. Most of our anti-tax rhetoric is just conservative theories trumpeted into facts. Many don't hold up when applied to the lens of history. We've had plenty of periods of enormous economic expansion with taxes that would seem ludicrous by today's standards.

    My guess is that most businesses will just pay the tax. They're buying a service they need. If they don't feel like paying the tax to outsource their IT, then they'll have to hire an IT department. If they don't feel like paying the tax to hire custom programmers, they'll have to hire a Development Department. The tax might actually increase jobs in the state.

    My guess is that people who were buying IT and programming services in Maryland were doing so because they thought they got better value from local, intelligent, native English speakers. If they wanted to just buy cheap and stupid their are a myriad of services offered outside of Maryland and outside the United states. Obviously these businesses are those who realize that they're buying more than just a low price tag.

    1. Re:Oh goodness by dmadzak · · Score: 1

      You mean like George Bush cutting taxes and the tax revenues going up? Can't blame tax cuts for the deficits, its the spending that is the problem. Seems like the problem is not conservative theories trumpeted into facts, but the facts are getting in the way of what ever beliefs you have.

      BTW what the hell are conservative and liberal theories anyways? The only theories I see around Washington is the theory that they can take our money and freedom.

      Money == Power == Freedom in this country. Any new taxes are taking away our freedom and not helping the poor, the unhealthy, scientific research, or the children. We have more than enough tax money to cover that.

      --
      Spelling and grammar mistakes specifically left in to give the grammar and spelling nazis a meaning to their life.
    2. Re:Oh goodness by Anonymous Coward · · Score: 0

      What a lot of anti-tax doom and gloom.


      Tax is drag on the economy.. full stop. Some is necessary, some isn't. It appears that MD has a double heapin' helping of unnecessary.

      My guess is that most businesses will just pay the tax.


      and then we have

      My guess is that people who were buying IT and programming services in Maryland were doing so because they thought they got better value from local, intelligent, native English speakers.


      Ever think about not guessing and picking up a first year economics text?
    3. Re:Oh goodness by tthomas48 · · Score: 1

      Then what does the first-year economics text reveal is the reason that people would hire an expensive Maryland programmer, rather than a cheap Indian one?

    4. Re:Oh goodness by tthomas48 · · Score: 1

      Aside from President George W. Bush, who are you quoting when you say that he "cut taxes and the tax revenues went up"? Again that's a statement that's been said so much that people believe it's true. George W. Bush came to power at the nadir of a business cycle. Tax revenues almost always go up. Our economy's been expanding for quite a while now. The question is have tax revenues increased more than they would have without the tax cuts. Looking at previous presidents, federal revenues increased more under Clinton then they did under Bush or Reagan.

      Since then we've had cheap money from the Fed that has fueled a real estate boom as well as a boom for conventional businesses able to expand with the low rates. Of course that would raise revenues somewhat. The problem is that revenues haven't come up even remotely enough to pay for the tax cuts in the first place, so exactly what have we gained? Of course lowering taxes stimulates the economy a little bit in the short run, but in the long run it's not sustainable. It increases our debt load which is leading to a weaker dollar and countries thinking about backing away from our government bonds.

      "Can't blame tax cuts for the deficits, its the spending that is the problem."
      That's interesting rhetoric, but not strictly true. If you buy a million dollar house and only make 30k a year then your ability to afford your house is not a problem of spending. You never could afford that house in the first place. The federal government is in much the same boat. As just one example, we've spent half a trillion dollars on the war in Iraq. Currently we don't have the income to afford that kind of "house", and the economy is not expanding fast enough to keep pace with our spending. We also have our outstanding social security promises, general debt, etc. We could raise taxes now, and try to get our spending back in control. Or we could test out how much of a drag millions of baby boomers are to the economy when they retire. It's not like they're going to care about income tax rates once they're no longer working, and are the largest voting block in the country...

      I agree that if the President puts a check for $300 in the hands of every American there will be a positive effect to the economy. A ridiculously artificial effect, but an effect nonetheless. But how much impact did the president's tax cuts really have on the economy? Are you sure that they didn't just happen to coincide with historically low interest rates that let the economy boom on cheap money? The economy's contracting right now and Bush's tax cuts are still in place.

      If cutting taxes really made that big of a difference shouldn't be be living in the same sort of economy that we had under Bill Clinton? After all, taxes were higher then. Things should be even better now, shouldn't they?

    5. Re:Oh goodness by Fulcrum+of+Evil · · Score: 1

      The MD programmer is better and he's right there. You can yell at him, or just tell him that that's not what you intended. Besides, the ratio in price is about 1.8 now (so says my boss^3).

      --
      "We returned the General to El Salvador, or maybe Guatemala, it's difficult to tell from 10,000 feet"
  53. What a mess... by joshv · · Score: 1

    I understand the rationale behind this - you have to pay tax on shrink-wrapped software, so why not custom software? Well, because custom software is a service is fundamentally a service, not a product. Yes, you can buy shrink-wrapped boiler plate legal documents, for which you are required to pay sales tax - does this mean we should pay a sales tax for legal services?

    My clients purchase my time as a service. As a side effect I may or may not create custom code for them, or improve their existing code base. I might go weeks without writing a line of code, or I might spend a feverish week cranking out a ton of very worthwhile code. Are the two types of activities similarly taxable? What if I am just working on documentation? What if I am troubleshoot and tracking down/reproducing bugs? Do you have to break out your activities by taxable/non-taxable? Or is my labor merely taxable because I am labeled a "programmer"?

  54. Bad by Shivetya · · Score: 1

    Because its just the tip of the iceberg. Small companies cannot afford in house staffs. As such they rely on others. This means that that whatever product they create, whatever service they provide, is now going to cost the citizens of MD more. The problem is that politicians have figured it out, people are too stupid to realize that no corporation pays taxes, they merely collect them for the government. Its called "embedded costs".

    So, when the politicians get the public fired up about companies making too much money the people go blissfully along, buying into this idea that the money corporations pay in taxes is magically not going to come out of their hide in the form of higher prices.

    This hurts IT because it stagnates development. Now companies specializing in such services have seen their costs increase. If they don't pass it along it means less money, less new stuff, less employees, less benefits, whatever. For the small company it means getting buy with software which doesn't exactly fit. For big companies, well most probably won't be based there so its not going to bite them directly. However indirectly if they use companies paying this tax in state those costs will be embedded and passed along.... to the consumer somewhere down the line.

    Class warfare only gets you so far, warfare on corporations seems to have no bounds. Just like how the stupidity of the average voter has no bounds. They think they can keep voting themselves other people's money without end...

    --
    * Winners compare their achievements to their goals, losers compare theirs to that of others.
    1. Re:Bad by Mr.+Slippery · · Score: 1

      buying into this idea that the money corporations pay in taxes is magically not going to come out of their hide in the form of higher prices.

      The money corporations pay in taxes comes out of profits. Of course, a corporation may raise prices to attempt to keep profits high; the market may or may not support that.

      warfare on corporations seems to have no bounds.

      Stuff and nonsense. If there was any serious "warfare on corporations", we'd see some of the miscreants getting their charters yanked.

      --
      Tom Swiss | the infamous tms | my blog
      You cannot wash away blood with blood
  55. Maryland businesses! Move to Delaware! by tjstork · · Score: 1

    There's no sales tax.

    -ever-.

    --
    This is my sig.
  56. Similar, but more difficult in Connecticut by waa · · Score: 1
    In Connecticut, computer hardware or 'boxed' software is to be taxed at the standard 6% state sales tax, BUT computer services including everything EXCEPT web or email hosting or services related to web or email hosting are to be charged at 1%.

    Try THAT when creating an invoice with your average software!

    Oh... And while speaking to a CT Dept of Revenue "Services" rep, I was told that I could charge 6% for everything.

    Oh great. So, for my convenience, I can just overcharge my clients and give the extra cash to the state. Ridiculous!!

    -- Bill

    --
    Windows is not the answer.
    Windows is the question.
    The answer is "NO."
  57. Re:Get real! Why should one business be favored .. by TopShelf · · Score: 1

    I'm afraid you're the one who has it backwards.

    It's not going to hit the development companies in Maryland so much as the customers for such services in that state. As part of a project I'm currently involved in, I have to monitor our application vendor's invoices to ensure that we're getting charged sales tax on custom development, no matter where it takes place, since we're the customer and our local tax rules apply (just as if you order something from another state, you're supposed to pay use tax if sales tax isn't charged). Thus if a company in Baltimore asks a company in California to do some custom work for them, then under this new ruling sales tax would be applied. If the customer was in California and the development company was in Maryland, California's sales tax rules would govern (and I have no idea what those are).

    --
    Stop by my site where I write about ERP systems & more
  58. Time to Move. by theskunkmonkey · · Score: 2, Interesting

    As a 43 year lifetime resident of Maryland, I've had it. I've loved living here and am damn proud to be a Marylander, but this is bullsquat. I had been thinking of moving and this seals it for me, I'm outta here as soon as I can.

    We're also getting screwed with one-armed bandits too.

    http://www.stupidprize.com/?name=Maryland

  59. Stupid question... by dokhebi · · Score: 1

    Does this new tax apply to clients outside of Maryland with custom work being done by a Maryland based business? This would kill business for a vendor I deal with on a (nearly) daily basis.

    Just curious.

    1. Re:Stupid question... by krbvroc1 · · Score: 1

      I would not think so. I think you collect taxes based on where the product is delivered. If its delivered out of state, the sales tax laws of the destination state apply.

  60. No surprise here by reboot246 · · Score: 1
    Money is to politicians as crack is to an addict.

    They simply can't say no to a tax.

  61. Re:Get real! Why should one business be favored .. by cgenman · · Score: 3, Informative

    In other words, It will now have to pay its fair share of taxes, same as other businesses.

    Except other labor-only services pay no such tax. Specifically, any maintenence services (as opposed to fabrication of new items) are not taxed. From the Maryland tax code web page:

    On the other hand, charges for repairing or restoring an existing item of tangible personal property to its original condition are not subject to tax. A charge for reconfiguring or enhancing existing tangible personal property, unless it results in the creation of a new and different item of tangible personal property, is also not taxable.

    Essentially, IT is being singled out for paying taxes whereas other labor types do not. There is no tax on having your accounting done, but now there is a tax on having your accounting software debugged. There isn't a tax on having your car fixed, but there is a tax on having your servers fixed. There is no tax on having your nails done, or having your lawn mowed, or having your house painted. Why are technology services being singled out in this respect?

  62. Already Taxes Services by Prince+Vegeta+SSJ4 · · Score: 1

    Maryland already taxes security Guard Services, dry cleaners, maybe more: http://business.marylandtaxes.com/taxinfo/comar/sub6.asp

  63. They are borrowing already! by sauge · · Score: 1

    Don't pay your taxes to starve the system?

    They are already borrowing trillions of dollars they can't readily tax out of us now!

  64. Jesus Christ programmers are a bunch of fucking by multiplexo · · Score: 1
    whiny parasitic little assholes! "Waaaaah! Waaaaaaah! They're making people who purchase my services pay tax. Boo hoo! I'm moving to SeaLand. Fuck the man. Goddamn welfare parasites. I hate them. The whole state is going to freeze do death in the dark just like at the end of Atlas Shrugged." I live in Washington State, if I have my car washed I pay sales tax on it. If I take my car into the shop and have a mechanic work on it I pay sales tax on that. If I have a lawn service mow my lawn I pay sales tax on that. These people are providing services to me. Now, if we're going to tax the people who buy services from car washes, mechanics or lawn services then it seems entirely fair and reasonable to me that we should tax people who buy services from programmers.

    --
    cheap labor conservatives - they want to keep you hungry enough to be thankful for minimum wage.
    1. Re:Jesus Christ programmers are a bunch of fucking by mschuyler · · Score: 1

      Amen, brother. Washington has always taxed custom programming. Big deal. Course, there is no state income tax, and property tax is 1% of value, but hey! I'm gonna move because I can't do the math and realize they will get you one way or another. You want to move to a low tax state, go ahead. Most of them are in the fly-over zone and they're pretty empty anyway.

      --
      How about a moderation of -1 pedantic.
  65. Re:Maryland businesses! Move to Delaware! by mschuyler · · Score: 1

    Good for you, but you have an income tax, don't you? Not all states do.

    --
    How about a moderation of -1 pedantic.
  66. Follow-up comments by Anonymous Coward · · Score: 0

    The cleanest explanation, from a philosophical point of view, is that a Sales Tax is a subset of a Use Tax.
    In a Use tax you are taxing the use/consumption of things. Whereas in a Value-Added Tax (VAT) you are taxing the increase in value.
    A Sales Tax is just a form of a Use Tax that is easy to administer (collect and enforce) because you get the business/seller to be your Revenue Service's agent. This is similar to how your employer withholds your income taxes. You are ultimately personally responsible for the tax, it is just the business is acting as an agent of the Revenue Service and collecting the tax.

    As a Use/Sales Tax, if you are merely a reseller of a good, you are exempt from paying the tax. So, if you own a bookstore, you don't pay taxes on the books you are selling, because you don't actually use the books they just pass through your hands. But you do pay taxes when the plumber comes to fix the toilet, or for the paper you use to write receipts. In some States you are required to get a permit certifying that you are a reseller.

  67. Re:Get real! Why should one business be favored .. by axb2298 · · Score: 1

    benefit from the services provided by tax revenues?

    like wars without end http://www.nationalpriorities.org/index.php?option=com_content&task=view&id=81&Itemid=107/
  68. Re:Get real! Why should one business be favored .. by Anonymous Coward · · Score: 0

    And while you're all at it, better get used to it. There's trillions of dollars in debt that has to be paid back, with interest. Taxes have only one way to go - up!

    Bob Slydell: What if - and believe me this is a hypothetical! - but what if you tried to cut back on spending just a tiny little bit. Would that do anything for your national debt?

  69. Comment removed by account_deleted · · Score: 1

    Comment removed based on user account deletion

  70. NSA, AAFB, NIH, GSFC, NOAA, Census, etc, etc. by oneiros27 · · Score: 1

    Military Bases : Andrews AFB, Aberdeen Proving Grounds, Ft. Meade (also NSA), Naval Support Facility, Pax River
    Military Hospitals : Walter Reed, Navy Medical Center (also NIH)
    NGA (formerly NIMA) (Bethesda, MD)
    NASA : Goddard Space Flight Center (Greenbelt, MD)
    Census Bureau (Suitland, MD)
    NOAA (Suitland, MD)
    US Marshall Service (Baltimore, MD)

    I'm sure I'm missing a few ... but it's a good thing that the feds are in DC, and won't be affected by this, eh?

    * Disclaimer : I'm a contractor at one of the above mentioned facilities, in a role that would be taxed under the new laws ... and there's no way in hell I'm relocating to Va -- the commute sucks, and I have no plans on moving.

    --
    Build it, and they will come^Hplain.
    1. Re:NSA, AAFB, NIH, GSFC, NOAA, Census, etc, etc. by Kumba · · Score: 1

      NMIC (National Maritime Intelligence Center), and NESDIS (NOAA's Satellite Ops group) are all in Suitland. NCEP (National Center for Environmental Prediction) and the Hydrological groups are in Camp Springs, which is just a stone's throw south of Suitland. NOAA's HQ is in Silver Spring, too. And I think the IRS has an office in New Carrolton. Ah, and the Naval Academy in Annapolis.

      Plus in Southern Maryland where I live, We've got Military all around. Indian Head is one of the Naval Surface Warfare Centers to the west, and Pax River NAS is to the south, where work for the F-22 Raptor, F-35 JSF, and even the new Marine One helo has all been done.

  71. The tax-exempt Geek by westlake · · Score: 1
    early this morning Maryland passed legislation to apply a new 6% sales tax to 'custom computer programming' and other computer- and hardware-related services.

    The only thing that surprises me is that it isn't being done elsewhere. That it isn't being done everywhere. There are damn few things in this state that are exempt from the sales tax and you can't plausibly call this particular tax regressive.

  72. Yes, hope that sends more revenue to my state by jackspenn · · Score: 1

    Yes, hope that sends more revenue to my state or gets people in Maryland to look at higher out of state service companies, in today's world I setup servers I can remotely boot and configure BIOS on. I work with ISPs to build firewalls and routers and ship them to clients all the time, this allow me to VPN into their network and then I am good to go. I have everything in VMware (so the internal network is largely virtual) and all I need is the receptionist onsite to make sure there is power, I get e-mails for hardware failure and have full support warranties. Life is good, well unless you are a service provider in Maryland.

    --
    Respect the Constitution
  73. Eh, what? by Heddahenrik · · Score: 1

    I have some understanding of the USA taxation, but this only confirm that it's a total mess. I've seen things like that you have to pay sales taxes on stuff you buy on the Internet if you're not located in the state it's sold in. This seems like a strange thing like that and makes no sense to me.

    In the EU it's quite simple: If you are a person who buy a service (any service), you pay the sales-tax in the country where you buy it. If you're a company you don't pay the tax if it's from another country and you get the money back if it's in your own country. The same goes for companies who buy goods. If you buy goods and are a person, you either pay the tax of your own country (if the company is selling enough there) or the tax of the selling country.

    The sales-tax is 18-25% for both goods and services, but with a few perverted exceptions (like food or books). It's quite high for Americans, but of course this means that our other taxes are lower (well, unless you live in Sweden or Denmark or something like that...).

  74. Tax Me, I am Canadian! by Anonymous Coward · · Score: 0

    Tax Me, I am Canadian!

    Canada, the Fredo Corleone of the Anglo-Sphere

  75. Re:Get real! Why should one business be favored .. by trolltalk.com · · Score: 1

    and while you're all at it, better get used to it. There's trillions of dollars in debt that has to be paid back, with interest. Taxes have only one way to go - up!
    The federal government is trillions of dollars in debt. State taxes, which this article is about, make no difference to the national deficit.

    Where did I say "federal"?

    State and local governments are also in hock past their eyeballs, for trillions as well. Even back in 2002 state and local government debt was 1.5 trillion dollars. Do you really think its gone down in the last 5 years? Speaking of total federal debt, if you used GAAP, the federal debt is really 59 trillion dollars.

    That money has to be made somewhere. Taxes.

  76. Re:Get real! Why should one business be favored .. by trolltalk.com · · Score: 1

    Company A isn't paying $6,000 in sales tax - their clients are. Company A is only the collection agent. Both companies are paying the same tax - $25,000.00

    Additionally, since the sales tax is part of the cost of doing busines, the customers of Company A get to deduct it from gross income.

  77. I think taxing services is a great idea by xkr · · Score: 1

    I support taxing software development 100%. As long as legal services, medical services, tax preparation services, hair cutting and car repair are included, too.

    --
    I will create a sig when innovation restarts in the U.S.
    1. Re:I think taxing services is a great idea by Anonymous Coward · · Score: 0

      I support taxing software development 100%. As long as legal services, medical services, tax preparation services, hair cutting and car repair are included, too.
      They already were.
  78. Re:Get real! Why should one business be favored .. by 644bd346996 · · Score: 1

    Go take a class in basic microeconomics. When taxes are increased, suppliers always bear at least some of the extra tax burden, and sometimes all of it. This comes from a straightforward application of the laws of supply and demand.

  79. Software party in Maryland... by NullProg · · Score: 1

    I say we all dress up like politicians and dump the software in Baltimore harbor...

    It worked in Boston once.

    Enjoy,

    --
    It's just the normal noises in here.
  80. Vote Red, Pay green by TiggertheMad · · Score: 1

    And while you're all at it, better get used to it. There's trillions of dollars in debt that has to be paid back, with interest. Taxes have only one way to go - up! And everyone has to contribute.

    Eat me. let the people who voted for president fucktard Jr and his nutty little war pay the huge debt. Last time I checked, Clinton had things managed quite nicely when he left office...

    --

    HA! I just wasted some of your bandwidth with a frivolous sig!
    1. Re:Vote Red, Pay green by trolltalk.com · · Score: 1

      The state and municipal debt is also in the trillions.

      Additionally, neither the Clinton nor the Bush debt includes the $50 trillion in future obligations that have been shifted "off-book" - the majors being social security and medicaid.

      Bottom line: Taxpayers are now on the hook for a record $59.1 trillion in liabilities, a 2.3% increase from 2006. That amount is equal to $516,348 for every U.S. household. By comparison, U.S. households owe an average of $112,043 for mortgages, car loans, credit cards and all other debt combined.

      Unfunded promises made for Medicare, Social Security and federal retirement programs account for 85% of taxpayer liabilities. State and local government retirement plans account for much of the rest.

      This hidden debt is the amount taxpayers would have to pay immediately to cover government's financial obligations. Like a mortgage, it will cost more to repay the debt over time. Every U.S. household would have to pay about $31,000 a year to do so in 75 years.

      Contrast this with your neighbor to the north. Social security actuarily sound for at least the next 75 years. Federal surpluses, and a declining federal debt (no deficit) - and projected to be "effective zero debt" - where current assets == current obligations + debts, in 15 to 20 years.

      How did this happen? The government imposed a sales tax of 7% on almost everything. This includes new houses (and no, Canadians can't deduct their mortgage interest from their taxes). Almost all provinces add their own tax. It hurt, but it changed history - from increasing deficits and debt to regular budget surpluses and declining debts. Its the only way.

      One side effect of the 7% tax on new house sales was that it discouraged speculation by "new home flippers". If you bought a new home from a builder with the intention of flipping it, that 7% is gone - its a sunk cost. Throw in the 7% agents' commission, and you have a 14% "anti-bubble disincentive".

      (NOTE: The GST was recetly reduced to 6% to pass on some of the cost savings from the reduction in the federal deficit)

  81. Good news for Virginia, Philly, and Delaware corps by billstewart · · Score: 1
    If I were in the computer business in the Maryland side of the DC area, I'd make sure to move my office down the Beltway to Virginia - or at least hire IT contractors that were based there. Baltimore's got it a bit tougher - they're stuck between DC and Philly or Wilmington.


    I wonder if this applies if you're selling services in Fort Meade?

    --

    Bill Stewart
    New Fast-Compression-only CPR http://preview.tinyurl.com/dy575ks
  82. Re:Get real! Why should one business be favored .. by trolltalk.com · · Score: 1

    When people write softwae, they ARE creating a product.

    Similarly, when people put together a server, they ARE creating a product.

    The proper question is, why should the mechanic and the lawn and nail people (or rather, the people who consume their services) get away with not paying their fair share?

  83. Re:Get real! Why should one business be favored .. by trolltalk.com · · Score: 1

    So either run for office yourself, or support a candidate who has the same agenda as you wrt allocation of tax dollars, or beef loud and long to your reps.

    Complaining on slashdot won't change it - buttonholing your rep and giving him or her an earful, accompanied by other like-minded concerned citizens, might.

  84. Re:Get real! Why should one business be favored .. by trolltalk.com · · Score: 1

    The "unaccounted debt" totals 50 trillion dollars, mostly to social security, medicaid, etc. You going to take away old people's pensions? What are they going to eat - cat food? Nope, too expensive when you've got no money. But that's okay = once they starve to death, they're no longer a burden to the system. And if you get really lucky, all the poor people who get sick will "do the right thing" and die quietly.

    Yes, stop spending on stupidity like adventures in Iraq, but that won't make the debt go away - only taxes or default will do that. And you don't want to default. The consequences would make the depression look like a picnic.

  85. Taxing services by FreeBSD+evangelist · · Score: 3, Insightful

    How far do you think a proposal to tax the services provided by lawyers would go?

    1. Re:Taxing services by gmcraff · · Score: 2, Interesting

      How about taxing political campaigns for their contributions?

      It's growth industry: every year the amount send on political campaigns grows.

      I propose a 25% tax on political contributions per criteria met:

      • The contributor is not verified as being resident to the district of the vote (applies to out-of-area contributors)
      • The contributor is not verified as being eligible to vote at all (applies to corporations, non-citizens, PACs)
      • On that portion of the contribution above $2000 (or whatever used to be the maximum limit before the cap was lifted to permit more taxable revenue. This includes the limit on the amount a candidate can donate to his/her own campaign)

      So, untaxed is those contributions from individual voters within the voting district under the contribution cap. Good for everyone, all around!

    2. Re:Taxing services by SonicSpike · · Score: 1

      This is EXACTLY why we should be electing lawyers to office!

      --
      Libertas in infinitum
  86. Some additional info... by mcwop · · Score: 1
    "Our problem with the computer services is that the only state in the United States that's done it is Connecticut, and there are about 40 lawsuits on it," Hixson said. "That seems like a non-starter for us." She added that Pennsylvania also had a tax on computer services, but "had to repeal it."

    Source

    As a service purchaser, this means that I will purchase less. The way I read it is that a $750,000 project gets $45,000 in sales taxes added on. That is $45,000 less in the budget. It may simply mean doing more in house. We will see.

    --

    "I don't think it's selfish, to eat defenseless shellfish." -NOFX

  87. Wait... remind me again? by hacker · · Score: 1

    Remind me again why we seceded from England? Oh yes, that's right, I remember now.

    These people would atax AIR if they could find a way to meter it.

    I'm willing to bet that when everything is outsourced out of the state, jobs, computer repair shops shut down (and stop paying their property and business taxes, FAR higher revenue streams than taxing the programming/support services they provide), these states might rethink their choices.

    Or maybe not. We already know this country is on a slippery slope downward, why not grease the rails and speed it up.

  88. THIS is your reason? by BlueScreenOfTOM · · Score: 1

    Wow. Of everything that's been happening in this state, this is the thing that "seals the deal"? I've been a Marylander all my life as well, and, while I've been here less time than you, I am a professional software engineer. It sucks, yes, but this is your reason?

    How about the sales tax increase? The ever-increasing income and property taxes? The fact that Annapolis is more concerned with playing party politics than passing through the slots bill that will actually help alleviate the new tax burdens while keeping money within the state?

    Have you driven the state stretch of 95 recently? What's the tolls now, $10 each way? For what? Have you driven the streets of Baltimore? You could park an 18-wheeler in some of the potholes. Hell, I live in Montgomery County now, and some of the roads are almost as bad here!

    The state and local governments here have problems, particularly with taxation. Whenever there's a tax increase, I usually don't see anything come of it. But what can we expect when we vote in as governor a mayor who did nothing but make empty promises for an ailing city?

    I love this state, if for no other reason than it is my home. And I've come to realize that I'd better be prepared for the stupidest excuses for tax hikes if I do decide to stay. Yeah, I'm mad too, and yeah, this is going to be a punch in the wallet both for me and the company for which I work, but I'll live. And start making big purchases in VA and PA.

  89. representative democracy != democracy by Anonymous Coward · · Score: 0

    The disconnect is representative democracy. As long as we give power to other people, we are ceding governance. And more importantly, inviting corruption.

    All that we've been missing until now is the technology to have a real direct democracy. Now that we have it, we'd be idiots to let other people keep ruling over us.

  90. Re:Maryland businesses! Move to Delaware! by Anonymous Coward · · Score: 0
    Delaware:

    There's no sales tax.
    ...or anything else.
  91. QUICK!! by Allnighterking · · Score: 1

    More bullets fast I still see one of them there suckers a wigglin!

    --

    I'm sorry, I'm to tired to be witty at the moment so this message will have to do.

  92. Re:Get real! Why should one business be favored .. by lena_10326 · · Score: 1

    When people write softwae, they ARE creating a product.

    Similarly, when people put together a server, they ARE creating a product.
    Authors do not pay sales tax and they create a product: a document. They do not create books, although they might write a book. A programmer or web designer is equivalent to an author in that they create documents (source, data files, executable files).

    Book seller's pay sales tax. The equivalent is a software sales corporation or typical store with a store front (Circuit City, CompUSA, etc).

    --
    Camping on quad since 1996.
  93. Re:Get real! Why should one business be favored .. by trolltalk.com · · Score: 1

    Go take a class in basic microeconomics. When taxes are increased, suppliers always bear at least some of the extra tax burden, and sometimes all of it. This comes from a straightforward application of the laws of supply and demand.

    In the same tone, go take a class in politics. When one jurisdiction makes a tax grab, others follow suit, so eventually it ends up being mostly a wash, except that now its a bit more possible to actually start chipping away at the massive debt hangover. Its the same as the "race to the bottom" that we saw in the '80s, but now in reverse, and history will do what history always does - repeat itself, and make fools out of those who either don't know their history, or plumb forgot. Same as the current housing bubble/bust is just a repeat, though greatly exaggerated, of the earlier one in the early '80s, or the one in Japan in the '90s.

    Keep in mind that ultimately, suppliers NEVER bear the burden of sales taxes, or any cost, for that matter - all costs are paid, one way or another, by the consumer. If they weren't the company would be out of business once the initial capital and all loan facilities were exhausted. You think that Company XYZ "bears the burden"? Get real. Company XYZ pays taxes based on sales. Ultimately, someone, somewhere, buys, and THEY provide the $$$ that pays the taxes. And the ultimate payor, the one who enables all this, is you, the consumer, either directly, or indirectly through government purchases or purchasing from a business that bought from a company that bought from another that ...

    If a company "absorbs" the tax, its only because they have enough margin to do so. Otherwise, they would either increase the price or go out of business. A lot of services aren't "portable". You can't outsource your pool care or lawn mowing or car repairs to India, so taxing them won't cause them to offshore. What it will do is spread the tax base more equitably. Why should only manufacturers and some service businesses have to pay a "manufacturing tax", making them uncompetitive investments compared to other businesses? Let everyone in the food chain pay their fair share.

    Or is being "fair" the new "evil"?

  94. See how the delegates voted by Pascarello · · Score: 1

    If you want to see how they voted to remove the language from the bill, go here: http://www.mdchamber.com/blog/2007/11/how_they_voted_sales_tax_expan.php

  95. Re:Good news for Virginia, Philly, and Delaware co by Kadin2048 · · Score: 1

    I wonder if this applies if you're selling services in Fort Meade?

    Government agencies are tax exempt in most (nearly all) circumstances. So if you're in the public sector and selling mostly to the Federal government, this probably has minimal effect.

    This looks like one of those dumb pandering moves that politicians make a big show of, saying they're going after "big companies" without really understanding the things they're tinkering with.

    --
    "Ladies and gentlemen, my killbot features Lotus Notes and a machine gun. It is the finest available."
  96. Not for long! by Anonymous Coward · · Score: 0

    California has huge budget problems, and guess what one of the government types was suggesting on NPR last week?

    Taxes on services.
    After all, they're making us a "service economy" now (read, Wal Mart greeter).

  97. Don't bet on your 2nd Amendment rights ... by trolltalk.com · · Score: 1

    "Oh I don't Know About all that.... I think my second amendment rights would have something to say about it. I already live in the most dangerous city in America."

    http://www.nytimes.com/2007/11/20/washington/20cnd-scotus.html?_r=1&hp&oref=slogin

    Supreme Court Agrees to Hear Gun Control Case

    WASHINGTON, Nov. 20 The Supreme Court announced today that it would l decide whether the Constitution grants individuals the right to keep guns in their homes for private use, plunging the justices headlong into a divisive and long-running debate over how to interpret the Second Amendments guarantee of the right of the people to keep and bear arms.

    The Supreme Court last looked at the Second Amendment nearly 70 years ago in United States v. Miller, a 1939 decision that suggested, without explicitly deciding, that the right should be understood in connection with service in a militia. The Second Amendment provides: A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.

    The justices chose their own wording for what they want to decide in the new case, District of Columbia v. Heller, No. 07-290. The question they posed is whether the provisions of the statute violate the Second Amendment rights of individuals who are not affiliated with any state-regulated militia, but who wish to keep handguns and other firearms for private use in their homes.

  98. Re:Get real! Why should one business be favored .. by Kadin2048 · · Score: 1

    That's not really the point; the problem here is that Maryland has decided to single out software development for taxation, separate from virtually all other services. Why, exactly, should software development be taxed, when house painting or hair cutting isn't?

    All they're doing is making IT services more expensive and consequently less available to businesses in Maryland. That, in the long run, just makes them less competitive.

    --
    "Ladies and gentlemen, my killbot features Lotus Notes and a machine gun. It is the finest available."
  99. Not so fast! Feds are smarter than O'Schmuckley by duh_lime · · Score: 1
    Give the Feds some credit here. They're smarter than Maryland Governor O'Schmuckley... uh... I mean O'Malley. The Federal Government generally doesn't pay state sales tax on anything.

    The Federal Acquisition Regulations (FAR), "Part 29.302 -- Application of State and Local Taxes to the Government" covers this:

    29.302 (a) Generally, purchases and leases made by the Federal Government are immune from State and local taxation. Whether any specific purchase or lease is immune, however, is a legal question requiring advice and assistance of the agency-designated counsel. (b) When it is economically feasible to do so, executive agencies shall take maximum advantage of all exemptions from State and local taxation that may be available. If appropriate, the contracting officer shall provide a Standard Form 1094, U.S. Tax Exemption Form (see Part 53), or other evidence listed in 29.305(a) to establish that the purchase is being made by the Government.

    So, this new Maryland Sales Tax is unlikely to generate revenue on the back of the Federal Government.

    Instead, considering that ANY SPOT in Maryland is at most 40 miles from another state, and considering that Pennsylvania already has a huge commuter workforce into Maryland, the trend of out-of-state commuters will accelerate. Companies and employees move out of state, then Maryland gets 6% of NOTHING.

    This bright idea was brought to you by the same governor who sends his two high-school daughters to an elite private girls' school... because the public schools which are good enough for the rest of the state aren't good enough for him and his spawn.

  100. Re:Good news for Virginia, Philly, and Delaware co by jcr · · Score: 1

    If I were in the computer business in the Maryland side of the DC area, I'd make sure to move my office down the Beltway to Virginia

    Absolutely.

    The start-up I'm working on now needs a DC area office for federal government customers, and the chances of that office being located in MD is now nil.

    -jcr

    --
    The only title of honor that a tyrant can grant is "Enemy of the State."
  101. Correction: Typo by Kadin2048 · · Score: 1

    The state is a lot more conservative and anti-tax than VA,

    The state is a lot more conservative and anti-tax than MD, ...

    --
    "Ladies and gentlemen, my killbot features Lotus Notes and a machine gun. It is the finest available."
  102. Re:Get real! Why should one business be favored .. by trolltalk.com · · Score: 1

    Your post misses one point. Nobody pays taxes on something they don't sell. You can write all you want, and never have to charge sales tax if you hve no sales.

    Services should be taxed at the same rate as hard goods. This is a first step for that state, but its really quite common elsewhere in the world, and known by other names - VAT (Value Added Tax), GST (Goods and Services Tax), etc.

    This would at least allow the US to get some semblance of order into its' finances. Taxes lower consumption, and with the average US consumer spending 103% of their income every year for the last decade, something has to give. The housing bubble crash is only the beginning.

  103. Re:Get real! Why should one business be favored .. by lena_10326 · · Score: 2, Insightful

    Your post misses one point. Nobody pays taxes on something they don't sell. You can write all you want, and never have to charge sales tax if you hve no sales.
    My major issue with this taxation is that contracted programmers don't own the works they create (generally), therefore they have no product to sell. The contracting company owns the software from the first line of code to the last, so the only asset the programmer has is in selling his or her services, which is now being taxed even though authors, mechanics, plumbers, etc aren't taxed. In this scenario (which is the most common), there is never a point in which a programmer can say he or she has a completed product and then offer to sell it to XYZ corporation which triggers a taxable event (point of sale). The entire contract was a series of service sessions involving the assembly (not an ASM reference) of one line of code after another.

    Authors do sell their books (ahem, documents), but they sell them to book publishers, and not to end users. Fine artists also create a product and sell directly to end users and I don't think they pay taxes, but that may be due to transactions being off the books. It's still not fair if they can get away with it while others can't. They only reason they can is that they're a small group not worth the government's time to bother with.

    Services should be taxed at the same rate as hard goods. This is a first step for that state, but its really quite common elsewhere in the world, and known by other names
    I don't think there's a right or wrong with taxation, only fair or unfair, consistent or inconsistent. If IT professionals and companies should be taxed for services, the all services should be taxed. However, I'd prefer all services to be untaxed and leave sales tax for goods consumable by end users; autos, electronics, music, shrink wrapped software, etc.

    Even though I don't like sales tax, the only reason I'd ever support them is to capture income from illegal residents and tourists.

    --
    Camping on quad since 1996.
  104. Re:Get real! Why should one business be favored .. by trolltalk.com · · Score: 1

    The programmer working as an employee isn't being asked to start charging sales tax.

    The programmer working as a contract is - and as such, he's selling his code, which IS a product.

    Now, in all fairness, everyone else involved in the sale of services, such as car repairs, lawn mowing, etc., should also be similarly required to do the same. This would probably have the side effect of allowing the tax to be set at a lower level overall, resulting in fewer cries of "the jobs will leave".

  105. Re:Get real! Why should one business be favored .. by lena_10326 · · Score: 2, Insightful

    The programmer working as an employee isn't being asked to start charging sales tax.
    Which is why I wrote "contracted programmers".

    This would probably have the side effect of allowing the tax to be set at a lower level overall
    The only side effect of taxes is more taxes.

    --
    Camping on quad since 1996.
  106. Re:Get real! Why should one business be favored .. by jerdenn · · Score: 1

    Keep in mind that ultimately, suppliers NEVER bear the burden of sales taxes, or any cost, for that matter - all costs are paid, one way or another, by the consumer.

    This is true in the general case, where a sale is actually made. However, where the demand curve is shifted through the price change caused by additional tax burden, sales are lost. Thus, while a consumer bears the cost of taxes in an actual sale, a business bears a cost in lost sales. Simple economics.
  107. BC, Canada had this for years... by Anonymous Coward · · Score: 0

    ... on both hardware and software, starting IIRC in 1993. Interestingly, a couple of years ago custom programming and services was once again made non-taxable; provincial PST (7%) remains on sales and services to hardware, and shrink-wrapped software. Semi-custom software is tricky.

  108. In the Netherlands you pay 19% by LinuxDon · · Score: 1

    In the Netherlands you have to pay 19% tax over all services and goods.
    So I find it suprising there was no tax at all over services in the USA.

    1. Re:In the Netherlands you pay 19% by Grant_Watson · · Score: 1

      In the U.S., such things vary dramatically by state. I'm in Oregon, and we don't have sales tax at all.

  109. Tangible goods by Anonymous Coward · · Score: 0

    Ah, but there is a question. Are configuration and programming services "tangible", especially when the resulting product is sent electronically (without physical medium).

    Would this change if the recipient burned it onto a CD/DVD?

    Furthermore, where are the services performed? At the programmer's location or on the site that will ultimately receive the configurations/programming/etc

  110. Texas did this ages ago by BlindRobin · · Score: 1

    My clients pay 8.25 % ! No joke.

  111. A non-issue for government contractors. by Algorithmnast · · Score: 1

    It might - at first glance - seem from this and this that out of state programmers wouldn't be considered goods. But of course they didn't make it that easy for out of state programmers.

    While it's true that Use Tax only applies to goods sold out of state, if a service is performed out of state, then in order for its effect to make it into the state it must produce a good that is transported across state lines - making it a target of the Use Tax.

    And if the service is performed inside the state, then it already is taxable.

    I live in MD, and work near DC - but still in MD - contracting to the Federal Government. This means it'll be harder to find a private sector job which doesn't lead back to government contracting. Blech.

    Then again, if I were only going to be a Federal Contractor, then I wouldn't care - the government (Feds and State) is immune to sales/use tax for contracted services.

  112. Working in MD on out-of-state projects? by virtcert · · Score: 1

    So, how does it work if you live/work in MD but do the work for clients in CA?

    Anyone have a link to the law?

  113. This isn't the only new tax by Darkstorm · · Score: 1

    I live in Maryland, I'm going to be the recipient of all the "NEW" taxes they have decided we should pay. I keep seeing words like "Fair Share", so just what is my fair share? How many times should I pay taxes on the dollar I earn so the state of maryland can waste it as well? I think those who feel income redistribution and fair share should move to places like Cuba or China, even North Korea...those people have been paying their Fair Share for their whole lives.

    Let me point out a few facts. This tax increase (which no one yet seems to have figured out what all the new taxes are yet since they did it at 2:30 in the morning) is to help cover the extra 1 billion in new spending they have come up with, and an 18% increase to the failing school system. All this money which I and other Marylander's earn will be thrown into the states accounts who will missmanage and put in the demand for the people working to pay more of the un"Fair Share".

    How many of the people here have ever worked on a Government contract? How many of those contracts went over budget, failed to meet the deadline, or both? What happened? Did you get sued? I doubt it. Did the Govt give you more money? Most likely. The normal sop of government is when something fails...throw more money at it, and what happens then? Well, if failing the first time gets you a bonus, why not try it again? Too often that works over and over again. How long can you keep tossing money at a failure before it is enough?

    I am of the opinion that I can do a better job with my money than the state can. I pay government enforced charities, also known as social programs. I get to help fund all the poor children out there that aren't mine, I didn't ask people to have, but now for some reason it is my responsibility to pay for their health care, food, and housing. If I don't jump for joy at being forced to pay for all these social programs I'm just mean...or other nasty thought get thrown my way. I no longer care. The largest tax increase in the history of the state was passed in the middle of the night with closed door negotiations and a flat refusal to listen to the people of Maryland. Representatives email servers suddenly started to reject all mail, phones remained busy for days..this is crooked government racking businesses and the working people so some politician can feel they are "helping the needy" with my money.

    It's a shame I can't tell the state I'm going to have a structural deficit next year....so I don't have to pay you any taxes. I need a big screen tv and a new home theater system and if I pay you then I can't afford it. It's what they are doing to all the people of Maryland...the tax on services is only one of a very large set of taxes they are bending us over with. Scream "Fair Share" all you want, but until you are volunteering 50% of your income to assist all the people who are irresponsible or just lazy...don't tell me they are my responsibility.

    --
    If ignorance is bliss, the world is full of blissful people
  114. Tennessee Foilies by CyberGarp · · Score: 1

    Here in Tennessee they had some revenue short falls. The tax division was pressured to get creative. They decided to reinterpret an old law so they could tax computer consultants which had never been done. That wasn't so bad, it's just that they decided to do it retroactively and go after all the consultants for back taxes. A friend of mine got caught in the net, he had registered his business in Tennessee and followed all the local laws. Consultants who hadn't got missed in the sweep.

    He went back and read the law carefully. It had a clause something to the effect of "configuration of existing software and hardware is excluded" and had more language implying that consulting was taxable only if it developed the entire system. He made an argument that writing in scripts (PHP, Ruby) was all configuration of an existing system. In fact, by extension all coding was just configuration since he didn't write the OS to begin with. He hired a lawyer and dared them to sue him in court. They backed away quietly, afraid of the challenge.

    --

    I used to wonder what was so holy about a silent night, now I have a child.
  115. ...And Maryland Screws up Again by pragma_x · · Score: 1
    This isn't entirely suprising. This has been a long-standing tradition here.

    Here's a good example. Along the Baltimore-Washington Parkway you have BWI airport, Goddard Space Flight Center, and then downtown, Andrews Airforce Base. Now you could have this be a wonderful haven for aerospace and defense contracting, but instead, most of the contractors here have field offices over in Tyson's Corner, Reston or even Dulles (all very much in VA). To add insult to injury: GSFC itself was built 50 years ago.

    So, MD has a huge budget deficit and what do they do? Encourage the growth of business, so they can gather more taxes next year? Of course not, they raise taxes on everyone who's already here, and encourage them to move money across the river. Nice. How about taxing people who are exporting business instead?

     

    Cochetti said the tax could encourage Maryland IT users to outsource computer services.
    For anyone not familiar with the geography of the DC-metro area, "outsourcing" from any of the commercialized areas around the MD side of the beltway means a 25-45 minute drive over to Tysons (non-rush-hour of course). It's that close and that convenient. Even from Baltimore, it's not that bad of a haul.

    And as a bonus, it's not like you're traveling to some nameless sea of office-parks: the dining is pretty damn good over there. So you send a broker to make a day of it, get some precious face-time with a few e-businesses, laugh it up at Morton's, and save a buttload on your next website, data bunker, co-lo, or what-have-you.

    Someone commented on TFA about incorporating in Delaware. That's certainly an option, although the bay bridge is quite an impediment to face-time. However, I can easily see stuff going to PA or even WV if you're north or west of Baltimore (respectively).
  116. MOD UP or MOD PARENT DOWN by dunc78 · · Score: 1

    This should either be modded up and the parent should be modded down.

  117. Tax the lawyers by kcdoodle · · Score: 2, Insightful

    Are lawyers services taxed in Maryland?

    Many politicians are also lawyers or have friends who are lawyers. I bet they wouldn't want their services taxed.

    --

    - I live the greatest adventure anyone could possibly desire. - Tosk the Hunted
  118. Thornton and Health Care by dunc78 · · Score: 1

    I believe the reason there is a deficit this year and not a deficit last year is that the ruling party has decided to fund two major programs, one new one (Health Care for the masses) and one old but previously unfunded or reduced funded one (Thornton). This is what I gather, but don't take it as the gospel (for lack of a better saying). The ruling party would like to turn Maryland into a socialist state it seems and they are off and running after the green light they got from the last election returning absolute power to the Democrats.

  119. I live in McLean by wiredog · · Score: 1

    They don't need high taxes to drive out businesses. The housing prices are doing a fine job of it.

    1. Re:I live in McLean by Anonymous Coward · · Score: 0

      Yeah, what he said. I always hear this claim that some new tax will drive businesses out, but did you ever look at the states that have the lowest taxes? They're shit-holes! Without good roads and police and infrastructure, (not to mention giant market-distorting corporate handouts!) businesses don't want any part of those states. Meanwhile the states with really high taxes tend to have loads of businesses in them, who apparently didn't get the memo that low taxes are all-important and that they're supposed to pack up and move to a low tax area, leaving their customers and their business connections behind, all so they can set up shop in some water-damaged building in the Ozarks, where everything's dirt cheap because nobody has any money. That's sure to be a high-profit environment, right?

        This idea comes from the retarded "libertarians", who seem to think government and business are enemies. It's not true, of course. Government takes money away from taxpayers on behalf of businesses. I mean, since when are the rich and the powerful NOT in bed together, huh? In Cato Institute fantasy-land, maybe. In the real world, it's the poor and middle class who get screwed, and it's government and big business united that are doin' the screwin'. The disagreements between them are all about who gets sloppy seconds this time around.

  120. Re:Get real! Why should one business be favored .. by TopShelf · · Score: 1

    Maybe it's just a cunning ploy by state of Maryland to foster the growth of house painters and hair stylists by preserving a tax-free business environment for them...

    --
    Stop by my site where I write about ERP systems & more
  121. So move to Virginia... by wiredog · · Score: 1

    Of course you'll have to do without well maintained roads, and other government services, but at least your taxes will be lower.

  122. I wonder... by Anonymous Coward · · Score: 0

    I wonder if this tax allows them to tax open source development, and I am curious to see how that would work?

  123. Just great. by Benanov · · Score: 1

    There goes the side jobs. I mean there's always under-the-table work, but now I need a Tax Id just to remove spyware.

    Yay Maryland!

    At least I can vote to remove these losers.

  124. More money, money, money, ... by Anonymous Coward · · Score: 0

    The State's men want more money, money, money, money, .. doing nothing except putting more taxes to people.

  125. Maryland in Holy Bible. by Anonymous Coward · · Score: 0

    En la "Tierra de María" (Maryland in Spanish), sólo se necesitan pan y vino.

    Nadie quiere las 30 monedas de plata excepto Judas.

  126. Too expensive are good business: pricing up. by Anonymous Coward · · Score: 0

    Maryland's 6% tax is CHEAP.

    Our good solution is "to price up +30% .. +200% our services"
      to pay the 6% tax to Maryland's State
      or to pay 6% tax of NOTHING to Federal Government's clients.

    This strategy downs the sales but it too downs the total accumulated taxes of 6% to Maryland's State.

    The blacked market ups too like the US's armors that they pay NOTHING to Maryland's State sucking and robbing their 6% of the tax.

    Sr. Pzarro

  127. Pricing up stops the Governor companies services. by Anonymous Coward · · Score: 0

    The Governor doesn't want problems like NO SERVICES or Error 404. Unavailable Service because the services are too expensive that businesses's men don't want to pay them.

    It shutdowns ALL.

    The shutdown REDUCES the accumulated taxes from the companies's sales to MAryland's State.

    Sr. Pzarro, i'm hyperanalyst, services = neck of the economy, no services = asfixiated economy.

  128. 6% tax + +200%priceup = 18% tax. by Anonymous Coward · · Score: 0

    Before:
    $1,000,000/month of services's profits in my hands. $0 for MAryland State.

    After with the 6% tax:
    $940,000/month of services's profits in my hands. $60,000 (6% tax) for MAryland State.

    After with the 6% tax and pricing up +200%:
    2,820,000/month of services's profits in my hands. $180,000 (like 18% tax of one million $) for MAryland State.

    And more blacked market too, more speculation too, ...

    Sr. Pzarro

  129. Re:So... Tried in FL by Anonymous Coward · · Score: 0
    In 1987, Governor Graham (D) in Florida got a similar service tax passed. This was repealed in 1988 but only after many corporations either moved out of state or closed offices there. At the time, many corporations were planning on moving to FL but changed their plan! It was a BIG disaster and really hurt the emerging tech industry in FL. It is one reason why I now live in VA.


    For example, IBM was planning on building a large research park north of Gainesville and had options on a lot of land. After this tax, they decided to move as much of the PC work as they could to NC, eventually even closing down their Boca Raton facility (at one time employing 10K).


    http://findarticles.com/p/articles/mi_m1154/is_n2_v76/ai_6268870


    My corporate HQ is in MD. I imagine they will look long and hard at moving it to VA. Those that do not learn from history are doomed to repeat it.

  130. Sweden by xmda · · Score: 1

    I live in Sweden, and when I read the article I almost laughed. Ha! A puny 6 percent! Come on! In Sweden most people pay 30 % and up, regardless if they provide services or goods. But we have a different system here, of course. Instead of paying for different insurances directly we pay the stuff via taxes. The drawback is of course that this isn't as efficient, the system has leaks and other inefficiencies. And we pay for people that cannot otherwise pay; it's called solidarity and it's not the same as communism... I work as a software engineer (since 11 years back) and earn about 5500 USD per month. After taxes I get around 3300 USD to put in my wallet. That's a lot of tax money but I live *very* well on that money, not worrying much about the taxes that gives the poor people "free" health care and medicines, etc. Again, the system we have here is in a way less efficient but I'd choose it any day over the "colder" (no offense intended) system in countries like the US, where only people with money live well. Call me a commy, if you like...

  131. Qualified to speak on this one, at least... by Anonymous Coward · · Score: 0

    ... I've been a Maryland resident for almost 40 years now, and a programmer for more than 20. For 16 years of that time, I've been a self-employed independent.

    This is very likely going to force me to move in the next year.

    For those that don't know the area, the lion's share of the work (technology companies) is already on the Virginia side of the river, because the taxes were already too high in Maryland. The "I-270 Technology Corridor" is a joke, nobody's there.

    Nor will they build bridges to ease the commute from here to where the work is. The original master plan for the area had four new bridges built between the Beltway and Point-of-Rocks (near Frederick) long ago. There are none. Commuting to suburban Virginia can easily cost me 1.5-2 hours in, and more coming back home. That's 3-4 potentially billable hours lost in traffic every day.

    As a Montgomery County resident I pay huge taxes, among the highest in the nation. The overall cost of living here matches that, and is often comparable with Honolulu. When I ask about services, like trash or leaf pickup, I'm met with a surprised "Oh, you're in the UPPER county. We don't supply those services for the UPPER county", as though it were the far side of the moon. My taxes are not a whit less for being in the "UPPER" county.

    I've been in my house for 14 years. Love the house, the neighborhood, have no desire to move, but we have to leave, the handwriting is on the wall. Who does that benefit? They still won't get the message- taxes are past the point of diminishing returns here. Raising them further simply lowers revenue in the long run, and now the "long" run is just getting shorter and shorter.

    The Socialist dream is alive and well here... but it still doesn't work.

  132. Maryland's 6% tax like in SimCity. by Anonymous Coward · · Score: 0

    1. 6% tax.
    2. ???
    3. Profit!!!

    if (there_is_six_per_cent_tax_in_MA) then fuck_you_fire_and_crash_unhappy(666); endif

    What you play? SimCity 2008, Civilization 2008 or FreeCity 2008 FreeCiv 2008?

  133. There is no 50 gold bars for 50 states. by Anonymous Coward · · Score: 0

    When there are crisis in the United States of America then

    90% of the states will be in crisis and
    10% of the states will be in benefit.

    This is the unsolvable problem of Bush, he wants 10% of states RICH and 90% of states POOR.

    It's like 5 states have 50 gold bars and 45 states have 0 gold bars.

    The many laws of states are useless.

    The unique law for each us is the "MONEY'S LAW".

    The money decides "WHO IS RICH! and WHO IS POOR!", it's the law of the money.

    Sr. Pzarro

  134. What about doctors/lawyers/etc. by lbates_35476 · · Score: 1

    These types of taxes are stupid for two reasons: 1) They cherry-pick some insdustries while others get off scott free. If they want to tax everything then they should just pass a VAT or GST like Canada. 2) You can actually tax any business. They just act as a "collection agency". They always pass these taxes along to the consumer. If you need additional money (which I doubt), raise everyone's income tax. We already have a everything in place to handle that.

  135. Your wrong, We're already armed to the teeth. by HornWumpus · · Score: 1

    No Supreme Court decision is going to change that fact on the ground.

    The fact it is upcoming should encourage slackers to arm themselves right fucking now. I recommend a 12 gauge shotgun for home defense and an M1 rifle to keep the bastards worried. While the M1 is pricey it is not an 'assault weapon' and was good enough to assault the beaches at Normandy. In the right hands it has an effective range of 400 yards or more. Also if you don't already posses the skills learn to make improvised explosives. (Quote my dad when I was 14, Nitrocellulose is much safer then Nitroglycerin, don't be stupid.) Without this you are just a subject, with those you are a citizen.

    It's not enough to own it, you need to be reasonably proficient or you are of no more social use then the cop at the donut store or the hippie at Starbucks.

    --
    John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
  136. Commy verskin du bist! Bork, bork, bork! by HornWumpus · · Score: 1

    Feel better?

    We do pay income tax. 30% and up (15%+ just to keep our Ponzi scheme SS 'alive and dying').

    This is a sales tax on services provided by those that don't own any politicians, which is on top of that.

    --
    John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
  137. The IT Tax affects the poor disproportionately too by bill_mcgonigle · · Score: 1

    In addition, he just increased the sales tax by 20 percent, an increase that disproportionately impacts poorer folks,

    The IT Tax affects the poor disproportionately too. Because, really, who hires IT service? It's mostly companies - by far the lion's share. And what are these companies going to do, take it on the chin? No, they're going to raise the prices on their products to pay for this tax - it's passed through.

    And who gets hit the hardest by a rise in cost of goods? Right, not the wealthy.

    What a bunch of idiots you have there running the state! Still, a shining example of why federalism is important. C'mon in, the water's warm (actually it's snowing now...).

    --
    My God, it's Full of Source!
    OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
  138. Custom vs generic - i got screwed by caywen · · Score: 1
    In the interests of trying to keep my code as general as possible, I always wrote my functions like:

    void *doit_XXX(int paramcount, void **params)
    {...}
    For some reason, I never got paid for it. But given that it's non-custom and super generic, and given the fact that Google hasn't paid me for it, yet, Maryland can't possibly tax me. Because I'm a winner.