Tech Companies Battle Digital Download Tax

A number of tech company reps met in Annapolis Tuesday morning to convince key legislators of the need to defeat the Governor’s proposal to extend the sales tax to downloads of digital products.  After meeting at the Maryland Chamber office, Chamber staff, company reps, and other local lobbyists met with legislative leaders and members of the tax committees. The bill presents many problems for Maryland-based businesses, including:

  • Competitive Disadvantage – This new tax on digital products would be collected by Maryland-based companies, but not by vendors located in neighboring states that do not tax digital products.
  • Compliance Burdens – The vague, but expansive tax would reach not only digital products that are downloaded, but would also make digital products produced by special order a taxable service.
  • Double Taxation – Because there are no clearly established national standards to determine which state may tax a digital product, Maryland consumers could be subject to the sales taxes of multiple states for the same transaction.

The Senate Budget & Taxation Committee will hold a hearing on this issue on February 29 at 1 p.m. in Annapolis. For further information contact Ron Wineholt at .(JavaScript must be enabled to view this email address).

About Ronald W. Wineholt