The Maryland Chamber, in partnership with the Fight the Tech Tax Coalition Partners, yesterday urged Maryland lawmakers to repeal the computer services sales tax enacted during the November 2007 special session.

Hundreds of tech tax opponents filled Lawyer’s Mall in front of the State House during a morning rally. They packed committee hearings in the afternoon, calling on the House Ways and Means and Senate Budget and Taxation Committees to repeal the tax.

The Maryland Chamber organized a panel of members to testify before both committees. Panelists outlined the negative impacts of this looming tax on technology services. If allowed to take effect on July 1, the computer services sales tax would damage Maryland’s competitiveness and jeopardize high-paying information technology jobs throughout the state.

“What we see overall is a loss of competitiveness. This tax reduces our ability to add more jobs in Maryland. It also reduces our ability to maintain existing jobs in the Baltimore area and throughout the State of Maryland,” said Jerome L. Sanders, Executive Vice President and Chief Operating Officer of BITHGROUP Technologies. “We respectfully request that the law be repealed.”

The tech tax would be especially harmful to small businesses that provide and consume the IT services. While many companies hire employees to perform the services covered by this tax, most small businesses hire outside service providers. Many of these service providers are small businesses themselves with relatively small profit margins.

“With 300 of our 600 small business clients located right here in Maryland, Dataprise is centered directly in the crosshairs of this new computer services tax,” said David Eisner, President and CEO of Dataprise. “Those of us that provide IT services, especially to small and medium businesses, are most often small businesses ourselves.”

Chamber members made it clear that this tax would impact more than one industry. Many industry sectors important to Maryland’s economy would be harmed, including bioscience, financial services, health care, government contracting and more.

“What concerns me is that this tax has been painted as a tax on the IT industry,” said Michael T. Dillon, Esq., director of State and Local Tax for Watkins, Meegan, Drury & Company LLC. “It’s a transaction tax. It’s a tax on the provision and consumption of those services. So in essence, it’s a tax on every company that relies on, or is dependent on, the procurement of those services in order to operate effectively, efficiently and profitably. It’s a tax on every company in the State.”