Proposal deemed ‘bad for all businesses and consumers’
Lawmakers in Annapolis are considering a new plan to generate revenue by decreasing the Maryland sales tax from 6% to 5% but extending the fee to include additional services, and Worcester County officials are leery of the financial effects.
“This is essentially an indirect citizen tax because everyone uses services,” Worcester County Chamber of Commerce in Ocean Pines President Kerrie Bunting said of the proposed Sales and Use Tax-Rate Reduction and Services bill. “It is bad for all businesses and consumers.”
Pros and cons
The amendment would tax services not currently affected by traditional sales tax, such as advertising, landscaping, accounting, dry cleaning, funeral services, and media streaming. The House Ways and Means Committee heard the bill on March 11.
Proponents of the legislation argue that it would generate roughly $3 billion in revenue sources for state priorities, such as the Blueprint for Maryland’s Future, the costly education policy that aims to enrich student learning by increasing school system funding by $3.8 billion each year over the next ten years, and the Transportation Trust Fund.
The current writing of the legislation excludes childcare, grant making and religious organizations but defines taxable services as “any activity engaged in for a buyer for consideration.” This includes telephone answering services, credit reporting, pay-per-view television, security systems, and the “fabrication, printing, or production of tangible personal property or a digital product by special order,” among others.
Critics of the bill worry that it would disproportionately affect small establishments.