SOURCE: MCSA

January 08, 2008 16:25 ET

Maryland Computer Services Companies Join Forces to Urge Repeal of Tax Increase

Computer Services Tax Will Place Maryland Companies at Severe Disadvantage in Competitive Global Market

OWINGS MILLS, MD--(Marketwire - January 8, 2008) - Recognizing the need to present a unified front in the legislative arena, information technology companies in Maryland have joined forces to launch a new organization, the Maryland Computer Services Association (MCSA). The catalyst for MCSA's creation was a new six percent sales and use tax on computer services that was passed during Maryland General Assembly's Special Session in November 2007, and is scheduled to take effect on July 1, 2008.

The association also introduced a website -- www.MarylandNeedsIT.org -- to educate businesses and consumers about the tax issue and encourage them to join the campaign to repeal the tax.

"Many of us in Maryland's technology sector were caught off guard by the Legislature's action. While the proposed budget had targeted luxury services -- such as health clubs and tanning salons -- these all remained exempt thanks to organized advocacy efforts in those respective industries," said Tom Loveland, MCSA's co-founder and CEO of Mind Over Machines, Inc. "During this process, it became painfully clear that the state's technology companies need a strong voice in Annapolis. Through MCSA, our industry will have that voice, as we work together to abolish the tax and strengthen continued investment in Maryland's future."

Computer services companies in Maryland employ 68,000 people, and have an annual payroll of $2 billion. However, the recently passed tax is anticipated to have a chilling effect on the state's economy by hindering growth of technology companies already in the state, and those considering Maryland as their home. Money once spent on technology by businesses in all sectors of the economy will be diverted to the tax, significantly curbing investment in innovation, hampering new job creation and driving Maryland businesses to relocate to other states.

"Strategic investment in technology has long been the key to success for many of Maryland's leading industries, including bioscience, financial services, healthcare, higher education and government contracting," said Larry Letow, president and COO of Convergence Technology Consulting and a founding member of MCSA. "By levying a tax on their investments, Maryland is significantly hindering the ability of all Maryland companies to successfully compete in the global marketplace."

Dozens of companies from around the state have already joined MCSA as charter members. As the General Assembly opens its 2008 session, MCSA will work with Maryland's chamber of commerce and technology councils to help policymakers better understand how the technology industry impacts the economy and the types of public polices that would support continued economic growth while meeting its needs to support the state's budget.

About the Maryland Computer Services Association

The Maryland Computer Services Association is a statewide association of computer services companies dedicated to lobbying on behalf of Maryland's computer services industry. The association also hosts an advocacy website -- www.MarylandNeedsIT.org -- that provides information about issues impacting the computer services industry. MCSA works in concert with Maryland's chambers of commerce and technology councils, leveraging its collective resources for the good of our industry and Maryland's economy. Created in response to Maryland's Tax Reform Act of 2007, MSCA's first order of business is the full repeal of Maryland's Computer Services sales tax. For more information on MCSA, please visit www.mcsassoc.org.

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