The Maryland Association of Realtors is speaking out against a proposed extension to a state real estate tax, with ads in local newspapers and a rally at the State House planned for Thursday morning.

O'Malley's plan would expand the state's 5 percent sales tax to certain service industries, and increase it to 6 percent. Among the services targeted for the tax are property management companies.

Maryland Association of Realtors President Carole Maclure said the other services falling under the tax would be tanning salons, health clubs and tattoo parlors.

"We understand taxes on luxury service, but real estate is already taxed," Maclure said. "We don't believe we're a luxury service. We're a commodity that is the fabric of the community."

Maclure and other local Realtor association leaders are expected to testify against the tax during the General Assembly's special session, she said. The association will hold a rally and visit state lawmakers on Lawyers Mall at the State House at 11:30 a.m. Thursday.

Maclure said more than 600 people attended a similar rally when the tax was proposed in March. She said her 35,000-member association has met with lawmakers and the governor over the last few months, and said there may be room for compromise.

The governor's office did not respond to requests for comment as of press time.

The new tax wouldn't devastate the property management industry, which would likely take the tax as a hit to its profits rather than passing the costs onto tenants, said Deborah Ford, finance professor at University of Baltimore.

"It's not going to put them out of business," Ford said. "I think that there are a lot of people providing property management services. The market is not in good shape, it would be hard to pass it on to tenants."

However, Scott Moody, an adjunct scholar with the Maryland Public Policy Institute, said a poor housing market pushing people back into renting might make it easier to raise renting costs, but cautioned that the resulting cost-of-living increase could hurt Maryland's competitiveness.

Moody said the Maryland Association of Realtors, as a chapter of the National Association of Realtors, could bring substantial political opposition to the tax proposal.

"Generally speaking, they are a very potent political force," he said. "I don't know what that will mean in their ability to stop this particular legislation. [But] they're not a one-trick pony."

acahall@baltimoreexaminer.com