Business coalition stands with Governor opposed to largest tax increase in Maryland history

Maryland Democrats propose $2.6 billion tax hike

Next week, before members of the House Ways and Means committee get ready to hear testimony in regards to HB1628: Sales Tax on Services bill, members of a diverse coalition of Maryland business owners will convene a “drive-in” press conference opposing what they say is the largest tax increase in state history.

The joint press conference, organized by the Coalition of Maryland Business Organizations – which includes some heavy hitters including the MD Chamber of Commerce, the State Bar Association, AAA, Maryland Retailers Association and more – will be held two hours prior to what appears to be one of the most contentious bill hearings of the session.

“I know more than a few parents likely to be upset by the already extremely high costs of day care, who will be highly upset when that cost goes up because of this tax increase.”

As Maryland Democrats look for ways to pay for the proposed Kirwan Commission recommendations, that according to analysts would cause legislators to come up with upwards of $3.8 billion over the next ten years; legislators have been considering various funding bills to pay for this educational improvement bill. Known as the Blueprint for Maryland’s Future, SB1030, seeks to continue what state legislators started last year, which provided for a roughly $255 million increase in education spending in 2019-2020 spending, with $355 million more from 2020-2021 and $500 million more in 2022.

But legislators wary of creating funding mandates without an identified funding source are trying to create innovative ways to fund the proposed increases in this year’s legislation, one of which is the possibility of passing HB1628 – which would lower the sales tax from 6% to 5% but expand that tax onto everyday services that had never been taxed previously, including legal and accounting services, realtor, auto and home improvement services, as well as gym memberships just to name a few.

This proposed massive tax increase would generate roughly $2.6 billion says most analysts and would be the single largest tax increase in Maryland history. And while education proponents and advocates say there has to be a way to help fund the Kirwan Commission recommendations, which would be a mix of state and local government increases over the next decade; hundreds of business owners and service providers have lashed out regarding the latest tax increase proposal.

Local Howard County blogger Scott E wrote about the devastating and harmful impact this bill would have on Marylanders of all walks of life, especially small business owners and parents who can barely afford their child’s daycare services; and he listed upwards of six different reasons on why taxing these services would be a bad idea. “Wow, lowering the overall sales tax is sweet, but do we really want to start taxing services such as day care providers and other small businesses, placing an additional burden and strain on those already feeling the day-to-day pressures of running a small business,” Scott says.

“I know more than a few parents likely to be upset by the already extremely high costs of day care, who will be highly upset when that cost goes up because of this tax increase. I get that legislators in Annapolis are looking for ways to fund the Kirwan legislation, but is this really the best way?”

Well I can point a large group of business leaders that say NO. And they will host their own press conference at 11:00 a.m. on Monday morning, March 2nd to voice their concerns regarding this legislation in the Baltimore County Delegation Room of the Maryland House of Delegate chambers where the bill hearing will take place at 1:00 p.m. Make sure to make your voice heard as well, by coming out to Annapolis on Monday.

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