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Computing Execs Form PAC To Fight Calif. IT Services Tax Proposal

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 passed 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The Maryland tax was repealed in April.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.

About the Author

Becky Nagel is the vice president of Web & Digital Strategy for 1105's Converge360 Group, where she oversees the front-end Web team and deals with all aspects of digital projects at the company, including launching and running the group's popular virtual summit and Coffee talk series . She an experienced tech journalist (20 years), and before her current position, was the editorial director of the group's sites. A few years ago she gave a talk at a leading technical publishers conference about how changes in Web browser technology would impact online advertising for publishers. Follow her on twitter @beckynagel.

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