Maryland’s sales tax on computer services might be heating up this week, as industry advocates seek to repeal the levy before it ever takes effect in July.
House Republicans are planning an announcement Tuesday to announce proposals to repeal the tax and replace the $200 million it is expected to bring in. Minority Leader Anthony O’Donnell said at a Greater Baltimore Committee legislative forum Monday that the Republican plan could close the gap without relying on new taxes. O’Donnell said the state could eliminate up to 500 vacant, funded positions, on top of the 500 Gov. Martin O’Malley has proposed to cut.
HB196, already in the house, would repeal the tax but does not replace the $200 million. It is sponsored by 72 Delegates (out of 141), which would be enough to pass the bill out of the lower chamber. There are other proposals out there to repeal the tax. Senate Minority Leader David Brinkley wants to repeal the tax, but his bill does not include a replacement. Sen. Rob Garagiola wants to replace the tax with a gasoline tax increase.
Top legislative officers have stood firm on the tax, saying that anyone who wants to repeal it needs to come to the table with some alternatives. That’s what Sen. Ulysses Currie, chairman of the powerful Budget and Taxation Committee, said at the GBC event. That could mean taxing other services instead.
Opposition to the tax appears to be gaining steam on the web (go figure). “Fight the Tech Tax,” a coalition of business organizations and Maryland companies led by the Tech Council of Maryland and the Maryland Chamber of Commerce is making a splash on the Web. Their site is circulating around information technology circles all over the country, according to my sources.
The Maryland Computer Services Association, a new industry lobby, is fighting the tax but hasn’t attached itself to one of the proposals yet. They may be waiting to see which incarnation of the repeal has the best chance to pass. Stay tuned.
Update: The Republican announcement has been postponed until Wednesday to avoid a conflict with the memorial arrangements for Sen. J. Robert Hooper.
