ANNAPOLIS, MD — Tech companies are thinking of leaving the state, blaming the IT tax set to become law July 1.
The tax will levy a 3% sales tax on IT and data services performed in Maryland.
Todd Marks founded Mindgrub more than 20 years ago, born and bred in Maryland.
VIDEO: IT tax forces tech companies to consider relocating out of Maryland
Now, he might be relocating his global headquarters elsewhere.
"My love of Maryland is what keeps me around, but economically having to stay in business is that important that we're now considering moving out of state?" said Marks.
Maryland's legislature passed the tax during the session, which ended more than 2 weeks ago, but companies are confused about how it'll be implemented.
"That 3% on top of all of our revenue that we have to charge, right? And either clients just pay it, we lose business because they can go somewhere else and not pay 3%, or we eat the cost. Well, if we're eating 3% on the top line, that could be as much as a third of our bottom line, right?" said Marks.
The confusion is also causing issues for Wade Berger of Ascendant Innovations.
"I already know a couple small companies, small companies and, you know, the single-digit employee range that just shook their head and said, Well, that's it for me. I'm done. Uh, I guess I'll go work for someplace else or retire or do something like that," said Berger.
Berger's company could be on the hook for hundreds of thousands in tax increases.
At a certain point it doesn't make sense for these companies to stay in Maryland or to stay in business.
"It would be $246,000 in additional taxes from my company this year. I can't budget that. I have no way to budget that," said Berger.
Governor Wes Moore has not signed the bill into law yet.
"It's not too late to reverse the policy and keep a lot of businesses in state," said Marks.
