Neighboring states work to lure Md. IT companies

WASHINGTON (Map, News) - With a 6 percent tax on computer services set to take effect July 1, Maryland tech companies have been hearing from nearby states about establishing a presence in their borders.

Delaware sent letters to about 70 companies in response to the tech tax, Gary Smith, spokesman for the Delaware Economic Development Office, told The Examiner. Smith said his department targeted firms it believed could be “in expansion mode” with the goal of making them aware of Delaware’s tax laws and other business advantages.

“Here in the state of Delaware,” the Feb. 4 letter said, “we remain ever steadfast in ensuring our businesses have the best, predictable and responsive business-friendly government in the U.S.”

The Pennsylvania Department of Community and Economic Development sent out letters a month earlier touting the state’s “business-friendly, low-tax” atmosphere. Pennsylvania repealed an earlier computer services tax; the letter noted Gov. Ed Rendell had “cut business taxes $1 billion since 2003.”

Officials from Pennsylvania came to Maryland to meet with several companies Feb. 13 and 14, said department spokesman Kevin Ortiz, though he asserted the letter and the trip’s timing were a “coincidence,” and not “specific to the computer services tax”

The trip was planned since early fall, said Ortiz, and it marked the first time Pennsylvania has reached out to D.C.-area companies.

Dan Roche, chief executive officer of Baltimore-based e.magination network LLC, received both pitches. His firm intends to meet with representatives from both states and look at property in the near future. Roche has also heard indirectly from a Wilmington, Del., developer through a Maryland-based real estate firm.

David Eisner, president and CEO of Rockville-based IT service provider Dataprise, has heard from Delaware, Pennsylvania and New York.

“We’re not going to shift our headquarters,” Eisner told The Examiner, “but when we look to decide on future growth areas,” Virginia, New York and D.C. corridors will get more investment.

Dataprise employs about 100 people.

“Most firms are making plans” to deal with the tax, said Doug Whatley, chief executive officer of Hunt Valley-based video and strategy games company BreakAway LTD. “We’re beginning to study our options. ... It would be impossible to move out immediately, but we would begin to shift things elsewhere.”

wblake@dcexaminer.com

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