Private Success, Public Failure: PA Tech Boom is Juicy Prey for Harrisburg Predators

10/29/2017 | By Startup Weekend Pittsburgh

This post originally appeared on blog.up.co


By: Clark Stephenson

If you’re going to be a business owner, or be involved in the creation of one, the importance of knowing your market cannot be understated; but that involves a lot more than just your own customer base.  Your market is being shifted and shaped 24 hours a day by your local economy, your competition, your suppliers, their competition, etc. and certainly by your local lawmakers.  And if you’re in tech, that’s all happening aboard a bullet train that’s about to be upgraded to a Hyperloop.  If you’re going to be a vigilant citizen, much less a successful business owner in this uncertain economy, it is paramount that you stay up to date on how your industry is being regulated, and how it affects everything you do.  For the current tech boom in PA, Harrisburg is looking for new ways to lower the boom.

Earlier this year, Governor Wolf proposed a new “tech tax” as part of his 2017-2018 budget that would have imposed severe sales and use taxes across a wide array of computer service providers, and by severe, I mean the worst in the country:

states imposing computer taxes

The measure would constitute a 330 million dollar kick to the stomach of the technology industry in PA, and would hurt smaller independent contractors & startups the worst; all to help cover up for budget craters in Harrisburg, because companies who are good at their jobs are always punished by bureaucrats who aren’t.  However, thanks to stern opposition by the Pittsburgh Technology Council, their counterparts in Philadelphia, PA House Speaker Mike Turzai, and at least 1500 companies across the state just to name a few, the proposal was thankfully scrapped, and indeed not part of the budget the PA Senate approved at the end of July, according to Governor Wolf, who said it’s “not an issue anymore.”

So that’s good news, for now, but that’s not the only prey Harrisburg is on the hunt for.  As if the tech tax wasn’t bad enough, some lawmakers are pushing for a re-work of the “Amazon tax”, just in time for Pittsburgh to submit its proposal for the online retail giant to build its second headquarters here, because there’s nothing like kicking a gift horse in the mouth, especially when you’re regarded as the top contender for said gift.  And despite receiving the same fervent opposition as the tech tax, the measure is “still on the table” according to the Tribune article.  Let’s hope it doesn’t spoil our chances of landing Amazon’s new playground.

Whether you’re a small, independent computer services provider, or a giant in the industry, the forces shaping your market that emanate from your State Capitol are something you can’t afford to ignore, especially if you’re just starting up.  Stay informed, get involved with local organizations & councils, and contact your local representatives to voice your support or opposition whenever possible.  At the very least, you’ll be more prepared to deal with the aftermath of a new law if you’ve done the math ahead of time, and at the very best, you’ll help to keep the State predators at bay.


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