ITA Urges No on Proposed Software Tax
7 May 2005
In testimony last week before the Illinois General Assembly House Committee on Computer Technology, the Illinois Information Technology Association (ITA) urged lawmakers to vote against a new tax on software proposed by Governor Blagojevich.
"There is no question that Illinois has an enormous technology industry. Unfortunately, it is a community that hasn't garnered the attention it deserves in economic and political discussions. Government needs to find ways to foster the community, rather than create new barriers to its development, such as this proposed tax," said Fred Hoch, President, ITA.
In testimony before the committee, Hoch and Terry Howerton, CEO, FastRoot Technologies and Chairman of ITA discussed a range of issues including:
the impact of the proposed software tax on technology companies in IL
the current size and scope of the technology industry in Illinois
the need for incentives to support capital formation for companies
current policies in support of technology transfer and talent retention
"Software is a core enabler of a broad range of emerging technologies and businesses, and for an increasing number of early stage companies software is the primary cost of innovation and growth," said Howerton. "It's short-sighted for the Governor of Illinois to advocate for a special tax provision that punishes the technology economy in this region, just as we see real signs of new growth."
A recent ITA survey of technology companies in Illinois found that leased software represents 42% of their revenue and that share is growing. Some companies lease software exclusively. In addition, a disproportionate share, over 50%, of their business is with in-state customers, meaning Illinois' technology companies will be hurt disproportionately by the new tax. As the industry moves further toward a leased software model, the impact will be heightened.
Further information including the results of ITA's member survey and last week's testimony can be found at http://www.illinoistech.org/pages.aspx/27.
About the ITA
The Illinois Information Technology Association (ITA) was introduced in early 2005 to reflect the expanded scope and vision of the Chicago Software Association. The organization benefits its members by providing networking, advocacy, resources and leadership to drive growth, development and retention of IT-focused business and talent in Illinois. Providing a platform for industry collaboration, the ITA has more than 400 member companies and is the largest Midwest trade organization dedicated to fostering support for the IT industry. Additional information is available at http://www.illinoistech.org/.
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Contact:
ITA
Fred Hoch, 312-435-2805
fhoch@illinoistech.org
or
Ruder Finn
Casy Jones, 312-329-3976
jonesc@ruderfinn.com
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Source: Illinois Information Technology Association
Source: Business Wire
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