Repeal of 6% Computer Services Tax Imminent? If you’re in the Maryland technology industry, by now you should be familiar with the furor brewing over the 6 percent “computer services” tax passed by the Maryland General Assembly. The tax, which extends to services like computer facilities management, custom computer programming, computer system planning, software and communication technologies, computer disaster recovery, hardware or software installation and computer maintenance and repair, was tacked onto SB 3, the Tax Reform Act of 2007 as a means to help close Maryland’s FY2009 deficit.

The problem is that as the approval of the tax moved through the state assembly, the industry had very little advance knowledge nor opportunity to respond (more on this later). The assembly apparently held a Special Session on a Saturday, debated it on a Sunday, and sent it to the Governor for approval on Monday.This 6 percent tax is a full five points higher than the similar sized state of Connecticut, and will be on top of the already increased Maryland corporation tax, which goes from 7 percent to 8.25 percent as of the New Year. Talk about Solomon Grundy!

Once the news about the computer services tax got out, a groundswell of disbelief, frustration and downright outrage emerged from the tech community. I first learned of it from my Greater Baltimore Technology Council (GBTC) email discussion list. The GBTC’s founding charter forbids them to lobby, so a grassroots effort has begun on the part of some of the members to hire a lobbyist to seek a repeal of the tax. The Tech Council of Maryland, which is the only technology council in the state with full-time government relations staff, is working hard to get this tax repealed.

Since returning back from our Christmas holiday break, I have twice been personally contacted by government officials seeking my feedback. The first was via my county (Harford) office of economic development in respond to an email questionnaire from David Karol, a Business Representative for the state’s Department Of Business And Economic Development; the second time was by direct phone call from Jack Cahill, the state’s Director of Corporate Attraction. Both were seeking input they could take back to state Secretary David Edgerley.

I spoke at length to Cahill, who said that speaking to him would serve the same purpose as completing the email questionnaire. Although my company doesn’t qualify for this tax, I still feel very passionate about it, perhaps because I also sit on the IT Steering Committee of the Governor’s Workforce Investment Board (GWIB) in which we’re trying to figure out how to save IT jobs and grow Maryland’s IT industry. See the juxtaposition of the problem here?!

Not only at issue now with this computer services tax is the matter of IT business retention, but also the sheer impact of how this will change Maryland’s computer industry in its ability to be competitive. Why pay more for services in Maryland when the purchaser can just as easily go to Northern Virginia (or further) now? If a company tries to offset the tax by reducing its prices, it cuts into not only the company’s revenues and therefore its ability to hire and grow, but down go profits and a company’s reason to stay in Maryland.

Although my company is not directly eligible for this new tax, it nevertheless will affect my business. Most of our local strategic partners will be hit by this tax, so if their costs go up, so will ours. We are also an extremely technology-reliant company – almost all the companies affected by this tax will affect our business. For that matter, however, please tell me what companies are not technology-reliant these days? You can’t even go to a hair salon or restaurant any more without coming across a touch screen monitor and computer software governing their entire operations! Again, who thought through the impact of this tax?

For small businesses like mine located in the northeast corner of the state, just 20 minutes south of the Delaware state line, such a tax could definitely mean the difference between staying or relocating. I’m actually one of those individuals that commutes from out-of-state into Maryland, and I’ve loyally kept my business here because of how the local government has helped me. In fact, I’m now firmly invested in Maryland, having recently purchased a nearby building into which to move my business. Cahill said that he has spoken to several computer service companies with far less motivation than I have to stay in Maryland.

I found Cahill a sympathetic ear and am impressed that the Secretary cared enough about the smaller Maryland technology business community to send out his emissaries on this mission (so I guess I’ll have to forgive him for copping out early on my Maryland SBA 2007 Small Business Person of the Year Award speech – it was a good one; I was sorry he missed it.) I don’t think it’s ever too late for government to seek the input of its constituents (even if I can no longer even vote in this state, which is worse because I am not even empowered to remove those who voted for this stupid tax in the first place).

Cahill shared some other feedback with me:

• Apparently the legislators told Julie Coons, the CEO of the Tech Council of Maryland, that no vote was going to take place the day of the Special Session debates and that her presence therefore wasn’t needed. She’s now steaming mad that she was misled (and I would be too).
• Smaller businesses are likely to be the most negatively affected if this tax goes into effect. Most big businesses Cahill spoke to said they’ll be inconvenienced, but that they’ll just have to shift operations around the country to protect their bottom line…which still means a loss of jobs in Maryland.
• Others like me who sit on the GWIB IT Steering Committee are beginning to feel like the whole process is now an exercise in futility. I’m ready to resign the group.
• Cahill believes that the tax has a good chance of being repealed, particularly because of the outcry from the industry. See Guys – it pays to be united!
  

I am hopeful that our General Assembly will come to its senses and give more logical thought to the impact of this tax it so swiftly and irresponsibly passed. This is not about passing the buck – it’s about thinking about the long-term future of an important state industry. I’m not too hopeful that any great lessons will have been learned because politics is politics, but the great thing about our country is that at least we have a voice.

And in my most humblest of voices I say to you all, may 2008 bring you health, happiness and continued prosperity.  4:38 PM •  0 Comments •

How Email Has Ruined My Holiday Joy You gotta love email, right? It’s fast, easy and free. While I admit that these days email is something I can’t live without, I have to say, it’s just about darn near ruined one of my little pleasures in life: checking my postal mailbox.

There’s a part of me that must just be that old school that I can remember a time when people actually used to write letters to one another to stay in touch. Getting a personal letter at the end of a long and difficult day was truly a treasure. I’d open up the letter and savor its contents, appreciating the stationary on which it was written and the careful selection of words used to communicate whatever news its author was telling. Even the sign-off was an important clue to your relationship at that moment in time: was it “Love” or “Hugs & kisses” or “xxooxxoo” or just a simply, “Yours truly”? Oftentimes I would save these physical letters in drawers, boxes or scrapbooks to re-read or recall a special occasion.

Nowadays, all that has changed. Nothing good arrives in my postal mailbox except for the occasional magazine. Everything else is crap: bills, junk mail, and unwanted catalogs. Even now, during the holidays when people still send the obligatory Christmas card, do I no longer look forward to emptying my mailbox. The whole daily experience is just a total let down. My poor postal carrier: I don’t even look forward to seeing his mail truck drive up the street anymore. I wonder if he and his peers have noticed this kind of waning enthusiasm from all their route customers?

To make my point more clearly, let’s compare email and postal mail:

• Does anyone really get excited about getting emails these days? I’d have to say no. Do I look forward to launching my emailbox, the equivalent of opening my postal mail box? Gosh, no. Do I rush to open my email? Hell no! Can I sift through my email box to find non-standard envelopes that typically indicate personal letters? Nope, can’t do that. Worse still, I’m a person who without spam filters would get 300+ emails a day, so I can genuinely say that I actually rue email-filled days... and rarely do I get a respite.
  
  
• Does anyone really treasure the process of reading an email? No, not really. Maybe if it’s from a family or friend you’ll get a kick out of the content; or, if the author happens to be very clever and witty it’ll be a good read. But treasure an email – doubtful.
  
  
• With email, can you distinguish the sender just from that person’s handwriting style? No. And for those of us who have ever gotten a kick out of trying to decipher someone’s really bad handwriting, gone are those days of mystery.
  
  
• Is there anything physically appealing about an email? Any lipstick kisses sealing the envelope closed? Any spots or splotches indicating what the sender might have been doing with your letter before sending it? Any way of dabbing the email with a favorite perfume? Any insertions of cash or small tokens? Nope, nada, niente.
  

It’s hard for me to imagine that there is now a whole generation of younger people who really don’t even understand this lost joy. To them, email, text messaging and chat rule. But at least I can make allowances for them because they know no different. What I’m really saddened by is that the abandonment of letter-writing has happened universally, parents and grandparents alike. People of all ages have slipped into an email vegetative state. We’re all too pressed for time or too lazy to act any differently.

So for those of you as disgusted as I am by the state of your postal mailbox each day, I say TAKE A STAND! Pick up a pen and write a letter! Make it fun or friendly or passionate or tender. Put a little heart and soul into the endeavor. Break out of your digital shell!!

You might actually enjoy the experience, and your postal carrier and your recipient will thank you.

Labels: email, holiday

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