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November 7, 2007

More Details on Sales Tax on Computer Services

We haven’t seen the language defining the specific computer services covered by the sales tax expansion approved yesterday by the Senate Budget and Taxation Committee, but here are the services as outlined during the committee’s session yesterday:

  • Computer service operations
  • Computer disaster recovery
  • Custom programing
  • Hardware and software installation

We expect to have the actual language today around 11 a.m.

In all, the Budget and Taxation Committee scrapped the expansion to real property management services and tanning, massage, physical fitness, sauna, or steam bath facilities or services that would have generated an estimated $60 million. They replaced those services with computer services, landscaping and arcades, which will generate and estimated $300 million, paid largely by Maryland businesses.

In addition, computer service and landscaping companies had no opportunity to oppose this expansion during a public hearing. These services were not a part of the sales tax expansion legislation that was heard Saturday.

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