SUN: Maryland IT tax brings in 77% less than state projected

MARYLAND (WBFF) — A new tax on IT services that Gov. Wes Moore introduced last year is costing one Columbia technology company an additional $15,000 a month, prompting it to raise prices and scale back some services, including cybersecurity.

And at Clark Computer Services in Frederick, employees spend about a day each week manually preparing customer invoices because the company’s financial systems have not yet been updated to handle Maryland’s new tax requirements, owner Darren Clark said.

The added costs and complications come as the tax itself has produced far less money for Maryland than lawmakers expected. The state collected $112.8 million in its first fiscal year — about 77% less than initially projected.

The Maryland General Assembly last year passed the 3% sales tax on business-to-business IT and data services, as Moore and lawmakers sought to close a $3.3 billion budget shortfall through a combination of spending cuts, and tax and fee increases.

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