Ryan Dobb is already feeling the sting from the state?s new 6 percent computer services tax.
The head of Towson-based NetQuest Inc. said thanks to the tax, one client has decided to hire an IT support staff in-house.
“Customers like this one will say, ?I have a business decision to make,? ” Dobb told a House committee Wednesday at a hearing on bills that would repeal the computer services tax. House and Senate committees held hearings on related measures.
Stories like Dobb?s were echoed dozens of times as business owners warned of lost customers, dips in revenue and possible relocation if the tax enacted in November isn?t repealed.
“Please do not put me at a disadvantage,” said Sheila Heinze, president of SM Consulting in Linthicum, adding she would be forced to cut jobs, salaries and benefits.
The IT industry represents 2.5 percent of the state?s work force, said Donald Fry, president and chief executive officer of the Greater Baltimore Committee. Pennsylvania and Virginia are among 38 states without computer services taxes, he said.
The tax would raise $200 million in revenue, and lawmakers are looking for ways to raise that money.
David Eisner, president and CEO of Rockville-based Dataprise Inc., suggested lawmakers take a note from Washington, D.C.?s tax book and consider an exemption from the tax for companies with most of its employees based in Maryland.
Minority Leader Anthony O?Donnell, the sponsor of one of four bills being heard by the House committee, presented the committee with the GOP?s plan, which includes reducing an increase in transportation funding and eliminating 900 vacant positions in state government.
“At a tough fiscal time, we can?t spend money we don?t have,” he said.
Del. Kumar Barve, a Montgomery County Democrat, questioned many business leaders on whether they would support a Senate proposal to raise taxes on high-income individuals to more than $230 million.
Reactions were mixed, but Maryland Chamber of Commerce President Kathleen Snyder said the chamber “doesn?t want to replace one bad tax with another bad tax.”
