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Maryland To Tax Custom Programming and Computer Services

Posted by kdawson on from the strangling-the-golden-goose dept.

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."

6 of 395 comments (clear)

  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 nurb432 · · Score: 3, Informative

      But moving out of state is an option.

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      ---- Booth was a patriot ----
  2. 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.

  3. 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.
  4. 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?

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    The ______ Agenda
  5. Re:IOW by penix1 · · Score: 3, Informative

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

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