Another key business group says it will bite the bullet for a computer services tax repeal.

The Greater Baltimore Committee will support a bill to raise the income tax for people making more than $750,000, but only if lawmakers get rid of the computer tax.

It seems this is a bitter pill for many business groups to swallow.

“In light of a downturn in the national economy and the Board of Revenue Estimates’ recent report stating that Maryland’s economic performance appears likely to be weaker than previously predicted, Maryland cannot afford to burden businesses with a broad new tax or higher earners with the second highest individual income tax in the country,” GBC CEO Don Fry wrote in testimony on the tax bills.

So what’s worse, income tax or computer services?

From the looks of the video brought back from Annapolis, Andy was right about one thing: this morning did bring a mob of IT folks to the state capital to protest the computer services tax and urge a repeal.

Watch the footage below and hear one businesswoman explain how the tax has already affected major decisions in her company.

I’m bracing for a Wednesday full of computer services tax protests, expecting a mob of IT folks and programmers to take over Annapolis for a day of hearings on whether to repeal a pending 6 percent sales tax on their businesses.

But that isn’t the only industry that’s trying to fight off a tax increase tomorrow. A bill in the House would place a tax on tanning salons and deposit the more than $500,000 it would raise into a health care fund.

The Indoor Tanning Association has not taken a shine to this idea (get it?), and is imploring its members to let their lawmakers hear it tomorrow. The association is also sounding alarms about another bill that would require minors who want an indoor tan to have a prescription or be accompanied by a parent or guardian. That bill got a favorable report from the House Economic Matters Committee on Monday.

Apparently people don’t want to pay more for computer services.

At least that’s the finding of a new poll conducted for The Tech Council of Maryland, which reports that 58 percent of the Marylanders surveyed want the state to repeal a new sales tax on things like programming, information technology and system design.

The tax is scheduled to become law in July. Though many lawmakers want to get rid of it, so far nobody has gotten anywhere with a plan to replace the $200 million it is expected to bring in.

The Tech Council says the survey is remarkable because of the wide range of the opposition.

Here’s a clip from the news release announcing the results:

“The poll … found majority opposition to the levy cuts across party lines: 54% of Democrats, 64% of Republicans and 62% of Independents.”

The survey was conducted by Gonzales Research & Marketing Strategies, and polled 807 registered voters across the state during the last week in February.

I have to wonder how much support any tax would get in a poll like this. The state can’t run a deficit, so Maryland will have to find an alternative source of revenue or cut the budget if the tax is repealed. Though the poll shows opposition to the tax increasing if it causes job losses, the survey did not ask how voters would feel about other options.

Is there still hope to repeal the sales tax on computer services? I’m getting mixed reviews.

Senate President Thomas V. Mike Miller Jr. told me this week that he would not look favorably upon any effort to repeal the 6 percent levy – it covers custom programming, system design, and information technology, among other things.

But advocates are not giving up hope. Though the Senate will be key to any repeal, the House is going to work on the issue next month.

Fightthetechtax.com blogger Will Burns, also of the Maryland Chamber of Commerce, reported today that the House Ways & Means Committee will hear repeal bills on March 12. I wonder if the Senate will be finished with the fiscal 2009 budget by then, because Ways and Means Chairwoman Sheila Hixson has said her committee will wait until then to begin looking at repeal bills.

What do you think will happen?

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.