Franchot’s Gambit

Comptroller Peter Franchot has gone out a bit on a ledge in order to try to get the computer tax repealed:

Amid growing momentum for a repeal of Maryland’s new computer services tax, Comptroller Peter Franchot released a broad interpretation of the levy yesterday, stoking fears that it will force businesses to leave the state.

Under the draft rules, computer services would be subject to the 6 percent sales tax even if the service provider is located outside of Maryland. That will make enforcing the law difficult and could encourage business customers to relocate computer-related operations, said Franchot, an outspoken opponent of the tax.

Clearly Franchot’s release of this interpretation of the tax is designed to give more reasons for the General Assembly to pass the tech tax repeal and get this ill-designed law off of the books. But it is not without risk, both to taxpayers and to Franchot. If the General Assembly does not repeal the tax, Franchot’s broad interpretation may mean thousands of jobs and millions of dollars will flow out of state. His interpretation of the tax, on top being bad for the economy, will they be used as a cudgel against him in the 2010 primary election.

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It’s an interesting gambit, and I hope it is successful is getting this foolish tax out of our lives…


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