There was quite firestorm of protest ignited when Maryland passed the computer services sales tax bill during a special session convened in 2007. It was set to go into efrect on July 1, 2008. However, before it could take effect, it has now been repealed. Under the legislation enacted in 2007 that is now repealed, “computer service” included:
— computer facilities management and operation;
— custom computer programming;
— computer system planning and design that integrate computer hardware, software and communication technologies;
— computer disaster recovery;
— data processing, storage and recovery; and
— hardware or software installation, maintenance and repair.
In addition, sales and use tax is inapplicable to the sale of custom computer software services that relate to procedures and programs that:
— are otherwise taxable, as specified;
— are to be used by a specific person;
— are created for that person or contain standard or proprietary routines that incorporate significant creative input to customize the procedures and programs for that person; and
— do not constitute a program, procedure or documentation that is mass produced and sold to the general public or persons associated in a trade, profession or industry.