An Update on Sales and Use Tax- Reduction and Services Bill

I’ve previously written, and actively advocated against, the bill known as the Sales Tax on Professional Service, or its formal title, Sales and Use Tax- Reduction and Services. This bill essentially lowered Maryland’s sales and use tax from 6% to 5%, while expanding the tax to apply to almost every category of professional services.

The bill would have raised over $800M in 2021, and by 2025 would have raised almost $3B a year in new revenue by taxing almost every form of professional services throughout our state. The bill was initially introduced as a way to fund the recommendations of the Commission on Innovation and Excellence in Public Education, known as the Kirwan Commission.

The Kirwan Commission recommendations are broad and sweeping and draw in public education best practices from school systems and consultants from all across America. Many of these recommendations are worthy of serious consideration, and a number of them SHOULD be planned for eventual implementation.

The question for Maryland policy-makers is whether it makes sense to impose punitive, job-killing revenue enhancements on the backs of small businesses, many of whom already struggle against repressive tax and regulatory policies found in Maryland but not in surrounding states.

Fortunately, advocacy efforts such as those of the Frederick County Chamber of Commerce led to the death of this tragically bad policy proposal. In order to change policies, we shouldn’t depend on turning partners against one another. Despite divisive political rhetoric, we can do both; we can build a job-creation economy that celebrates small business AND we can enhance and improve our public education system to be one of the best in the world.

So now that we’ve tasted success in advocating AGAINST bad tax policy, let’s commit to working cooperatively with our partners in public education to find the best practices that we should move forward with. If we focus on how we ultimately grade and measure success, and develop incremental approaches to how we introduce these ideas, then maybe we can protect and sustain our economy AND enhance the K-12 education to give our kids the high-quality education they deserve.

– Rick Weldon, President & CEO

Frederick Chamber Insights is a news outlet of the Frederick County Chamber of Commerce. For more information about membership, programs and initiatives, please visit our website.