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How Maryland’s New Sales Taxes Would Hit Small Businesses — And You

Smaller businesses will bear the brunt of the proposed tax in Maryland, plus the added costs will be passed down to the consumer in the form of higher prices for goods and services. Read the Op-ed from the Maryland Association of CPAs

Taxing Business Services Will Hurt
Maryland’s Businesses and Residents 

Maryland lawmakers have proposed two bills that would levy an unprecedented 2.5% tax on business-to-business services. The proposals will damage the state’s robust market, and harm businesses, employees, and consumers alike as a result of decreased economic activity.

Accounting is a Business Service and Doesn’t Belong in the Sales Tax Base

Attempts to impose sales tax on accounting services are nonsensical: the data shows that they’re by definition business services, and thus do not fit in any rational sales tax base. Public finance experts agree that consumption taxes, like the sales tax, should not include business inputs. More than 90 percent of accounting services are either business inputs, or are sold to governments and nonprofits. Subjecting them to sales tax isn’t tax reform.

Past Failed Attempts to Expand Sales Taxes to Services

Many states have pursued attempts to tax services, and each time the law has been repealed shortly after it went into effect.