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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."
since companies have to pay a use tax for those cases
So, no more development companies opening up in Maryland then? Smart move MD!
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)
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?
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.
... 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.
I wonder what those congresmen do to the hookers
Pay them with your tax dollars. That's a fact.
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.
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.
Hi, I'm in Maryland, and I'll cut your lawn for $25,000 and throw in a custom eCommerce system absolutely free!
technical writing / development
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.
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.
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.
Not me - I specifically wrote in "not to be spent on hookers" on my last check to the IRS.
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?
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.
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
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?
The ______ Agenda
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.
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.
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.
How far do you think a proposal to tax the services provided by lawyers would go?
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.
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. 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.
Camping on quad since 1996.
In Other Words, Open Source/Free Software becomes an even better bargain! 6% tax on $) expense is $0 tax.
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.
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