Businesses Fret Over the Launch of Maryland’s ‘Tech Tax’ July 1

Maryland businesses will begin paying a new 3% levy on their purchases of information services starting Tuesday, but some taxpayer groups and practitioners are worried about potential compliance challenges with the new “tech tax.”

Business groups opposed Maryland’s new levy on data and software services, contending it conflicts with efficient tax policy principles because it taxes business inputs and inflates prices paid by end users. Outside of these philosophical objections, tax practitioners expressed concerns about Maryland’s hasty rulemaking process.

The Office of the Comptroller of Maryland worked quickly to orient technology vendors and taxpayers on their new duties, publishing emergency ...