How Maryland’s ‘tech tax’ will undermine economic growth

In a commentary piece for Maryland Matters, David Tohn, CEO of BTS Software Solutions, a service-disabled, veteran-owned small business headquartered in Columbia, explains how Maryland’s 3 percent tax on data and IT services will negatively impact the state’s “lighthouse industry.” “In a federal market where a 10 percent margin is considered strong, an additional 3 percent tax makes Maryland subcontractors less competitive, reducing their ability to reinvest, grow and hire. This tax will not only stifle job creation but also drive firms to more business-friendly states,” said David.

Businesses have options: “Maryland’s technology companies don’t operate in isolation. They have options, and with the tech tax now law, recruiters from lower-cost, high-growth states will have an enticing pitch. Meanwhile, federal agencies, under increasing budget scrutiny, will look for lower-cost alternatives — putting Maryland firms at a clear disadvantage,” notes David.

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