Chesapeake Regional Tech Council releases survey on Computer Services Sales Tax effects
Survey shows most member companies will be affected negatively by tax
ANNAPOLIS, MD – March 3, 2008 – If the computer services sales and use tax passed last fall by the Maryland General Assembly goes in to full effect on its planned July 1 start date, a majority of technology businesses in the state will see an adverse affect on business. Results from a survey by the Chesapeake Regional Tech Council showed that most members would face a reduced competitive advantage, would pass the tax directly to customers and would negatively alter expectations for future growth and profitability within their business.
Among the major findings of the survey:
- ·A full 68% of survey respondents said the tax would affect their business.
- ·68% would pass all or some of the tax to customers; 12% would absorb the tax; and 28% said the tax was not applicable to their business.
- ·59% said the tax altered their business’ expectations for future growth and profitability.
- ·55% said the tax would create a competitive disadvantage.
However, many technology businesses aren’t sure exactly how the tax will affect them. A full 26% of respondents were unsure what impact the tax would bring.
“We knew the Computer Services Sales tax was going to have a direct effect on our member companies,” said Michael Ryan, President of the Chesapeake Regional Tech Council and CEO of Annapolis-based South River Technologies. “What this survey hints at is the trickle-down effect we may see as the tax gets passed on to customers. As a result, businesses start seeing impact from competition outside Maryland.”
While not a direct lobbying group, the Chesapeake Regional Tech Council works to convey in-depth information and insights about top-of-mind technology issues. The CRTC is a supporting member of the Fight the Tech Tax organization and the Maryland Computer Sciences Association, groups that are working in the state house to repeal the computer services tax.
About the Chesapeake Regional Tech Council
Founded in 1992 as the Anne Arundel Tech Council, the Chesapeake Regional Tech Council is dedicated to supporting the tri-metro region’s growing technology industry with symposiums, educational seminars and quarterly events all designed to foster an exchange of ideas from the region’s vibrant tech industry. The Tech Council is supported by a grant from the Anne Arundel Economic Development Corporation, which allows members access to the EDC’s resources and business leaders. More than 250 businesses from the Annapolis/Baltimore/Washington D.C. area are members of the council, including many of the area’s well-known leading technology companies.
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