Jan 22, 2008 9:22 pm US/Eastern
O'Malley Pledges To Work To Mitigate Computer Tax
ANNAPOLIS, Md. (AP) ―
Gov. Martin O'Malley, speaking before an unhappy audience affected by a tax on computer services, pledged Tuesday to work with them to "mitigate whatever possible downsides" may come with the tax that was passed in November's special session.
More than 100 people attended the Tech Council of Maryland dinner, and nearly all of their hands went up when O'Malley asked how many opposed an extension of the sales tax to computer services.
While some lawmakers are pushing to repeal the tax, which doesn't take effect until this summer, the governor doesn't support a repeal.
"I'd like to make it work and have it understood and not have an adverse impact on the tremendous potential that we have here," O'Malley said.
But many audience members, while respectful and even applauding the governor at the end of his talk, clearly didn't agree. They say the tax was passed unfairly with little notice in a swift-moving session. They also say it will hurt businesses.
John Nyland, a former chairman of the council, asked O'Malley and lawmakers "to give us our day in court" to educate the General Assembly about how negative the tax will affect business.
O'Malley said the tax, which is estimated to generate $200 million a year, became a necessary piece of a large tax and budget cut combination in order to reach a consensus in Annapolis to confront a $1.7 billion structural budget deficit. More than $1.3 billion in tax increases were approved.
The governor said he believed the computer services tax has been characterized by some as "something far more insidious and devastating than it might actually be."
"I look forward to sitting down with you in a small group ... and talking about it and looking at what it is really, versus what some would have you believe that it is in order to get you agitated and fired up and hiring 40 lobbyists here in Annapolis," O'Malley said.
The governor also underscored that the tax was not part of his initial proposal to wrestle down the deficit. He told the audience he would have preferred to have had three or four years under his belt -- get re-elected -- and then turn his attention to the "colossal" deficit, which has been years in the making.
"I didn't have that luxury," he told them.
The tax was one of the more volatile issues in November's three-week special legislative session.
The computer services that will be affected under the tax include support services for computer systems or data processing facilities, custom computer programming, consulting services regarding computer systems design, and computer disaster recovery services.
(© 2008 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
