Maryland to Virginia: please take thousands of our IT jobs from us... we don't need them anymore.
Applying the sales tax to this work won't really hurt federal contractors much, but it will hurt commercial contractors because it will raise the cost of doing business with them by six percent. Every IT worker in Maryland who loses his or her job to outsourcing should now look at their state government as part of the reason they lost it. I am not sure how much it will hurt small businesses that just do things like repair work, but it probably won't be as great as the damage done to commercial contractors that do custom programming and O&M (operations and maintenance) work.
Maryland legislators have approved a new tax on computer services.
The state's decision to add computer services to the state's new 6% tax rate, which takes effect in January, has raised the ire of computing industry representatives.
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.
The Computing Technology Industry Association said the move "will bring cascading harm" to the state's IT industry, small local businesses, workers, and consumers.A significant amount of federal contract work for IT is based in two states: Maryland and Virginia. It is only logical for a cash-strapped state government that is too lazy to force its workers to be more efficient and creative at finding ways to use existing tax revenues to try to tax something as lucrative as IT contracting. You have tens of thousands of workers for companies ranging as large as Lockheed Martin and Northrop Grumman, to SAIC, to small teams of contractors, to self-employed IT contractors who are making a big wad of cash. You figure that in general, the markup on a contractor's hourly wage, charged by their employer (and now taxed by the state) is between three and five times, and damn that is a lot of money they could immediately get their hands on. It is also an indirect way to tax the federal government.
Applying the sales tax to this work won't really hurt federal contractors much, but it will hurt commercial contractors because it will raise the cost of doing business with them by six percent. Every IT worker in Maryland who loses his or her job to outsourcing should now look at their state government as part of the reason they lost it. I am not sure how much it will hurt small businesses that just do things like repair work, but it probably won't be as great as the damage done to commercial contractors that do custom programming and O&M (operations and maintenance) work.
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