Computing Execs Form PAC To Fight Calif. IT Services Tax Proposal
- By Becky Nagel
- May 28, 2008
With California facing a $16 billion budget deficit, representatives are looking
for new ways to make up for the shortfall. According to Oli Thordarson, CEO
of Irvine, Calif.-based managed service provider Alvaka Networks, one idea that
some legislators keep turning to is a possible state tax on IT services as well
as software downloads -- and that's why he's decided to chair a new political
action committee (PAC) designed to fight such proposals.
The bipartisan Technology Leadership PAC (TLPAC) was created in February to
focus on various state and national issues of interest to Southern California-based
IT firms, according to founder and Executive Director Tim Jemal of Jemal Public
Affairs. However, the top issue on the PAC's agenda right now -- and particularly
on the mind of Thordarson, who became the PAC's chair in March -- is fighting
any proposal to tax California's IT services industry.
"The tech sector already produces the lion's share of state revenue in
corporate and personal income taxes of our high-wage earners, over twice the
average wage for the state," Thordarson commented in an e-mail interview.
"With so many IT services [capable of being] delivered remotely from other
states and abroad...if California wants to keep these lucrative jobs and employers,
it needs to remain a friendly state."
According to Thordarson, the idea has been proposed several times in the past
few months by various California senators, and each time TLPAC has fought to
stop it. The PAC is working on the issue now to make sure, for example, that
what happened in Maryland last year doesn't happen in California. "Maryland
an IT service tax in the middle of last year in a dark-of-night session of sorts,"
he commented. "The IT community there never knew what hit them."
The Maryland tax was repealed in April.
As part of its efforts, TLPAC is holding a meeting
tonight in Irvine with guest speaker Rep. Ed Royce. "Stop by after
work for at least a short time to talk to Senator Royce and some of the other
politicians who will be there to tell them what you think," Thordarson
wrote in his e-mail inviting Southern Californian IT executives to attend. "Now
is the time to get involved if you want to protect your business, your livelihood
and for some of you, your single biggest asset."
More information about the PAC can be found here.