GGCC Opposes State Proposed Legislation to add Sales Tax to B2B Services

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ACTION ALERT (UPDATED 3/13/25)

Members – please see March 7 email regarding the state budget proposal (HB 1554/SB 1045) to add a 2.5% sales tax to B2B professional services. This legislation was filed late, testimony is due Monday, hearings are scheduled in the House and Senate on Wednesday, March 12. Read an article from Maryland Matters about it here. Read a detailed post about the potential taxes from the MD Chamber here. The bottom line (MD Chamber): “The proposed small business services tax in HB 1554/SB 1045 trades short-term budget gains for long-term economic damage. While it may generate immediate revenue, it undermines Maryland’s competitiveness against neighboring states that don’t tax these services. The result? Businesses relocate, jobs disappear and, ironically, tax revenue ultimately declines. Maryland needs sustainable budget solutions that strengthen our economy rather than policies that drive businesses across state lines.” 

Update March 10:

GGCC has been working closely with other Chambers and our members to submit testimony in opposition to these detrimental bills: 

Click here for House testimony

Click here for Senate testimony 

TAKE ACTION NOW:

Action Needed: Stop the Small Business Services Tax or Your Costs Will Rise

HB 1554/SB 1045 | Sales and Use Tax, Taxable Business Services

Submit a letter to your elected officials today! We need an overwhelming business response to affect positive change.

 

SEND A LETTER NOW!

 

YOUR BUSINESS COSTS WILL RISE: New 2.5% Tax Increase

The proposed NEW 2.5% business services tax will significantly increase your business costs. We need a sizable showing of opposition to stop this harmful legislation.

 

Service sectors that WOULD be taxed under proposed HB 1554/SB 1045:

    • Accounting, payroll and bookkeeping
    • Office administrative support, including medical office, administrative, business, executive, hotel, industrial, dental office, physician and surgeon office, professional office, motel, office administration management
    • IT, data processing and web hosting
    • Employee and contractor placement
    • Consulting
    • Scientific and development
    • Photography, design and printing
    • Marketing and PR
    • Landscaping and property maintenance (excluding cleaning of commercial or industrial buildings and security services for buildings)
    • Repair (electronics, machinery and vehicles)
    • Financial planning and tax preparation
    • Appraisal (non-real estate)
    • Valet and parking

 

What This Means for Your Bottom Line:  Maryland businesses report potential costs of $50,000 to upwards of $150,000+ annually from this new tax. These are direct hits to your bottom line that your competitors in Virginia and Delaware won’t face. Every dollar spent on this tax is a dollar not invested in growth, hiring, or innovation.

 

 State lawmakers need to hear from you! 

 

The hearings took place in the House and Senate on 3/12/2025 – for a summary from Maryland Matters, click here.

·     HB 1554 was heard in the House Ways & Means Committee on Wednesday, March 12 at 1:00 p.m.

·     SB 1045 was heard in the Senate Budget & Taxation Committee on Wednesday, March 12 at 3:00 p.m.

State lawmakers must hear from real Maryland businesses about real impacts:

  • SMALL BUSINESSES — How this tax threatens your already-thin margins
  • PROFESSIONAL SERVICES FIRMS — How this makes Maryland less competitive for your industry
  • BUSINESSES NEAR BORDERS — How this puts you at a disadvantage to Virginia and Delaware competitors
  • GROWING COMPANIES — How this new cost will affect your hiring and expansion plans
  • MULTI-LOCATION BUSINESSES — How this might influence where you locate future operations

 

The next targets? Healthcare, legal services and more

While legal, educational, healthcare, real estate, banking and insurance services are not currently included, once this tax structure is in place, expansion to other business services is inevitable.

Your testimony now can prevent this tax from taking hold in the future.

 

The MD Chamber has made it easy for our members to customize an email to legislators – click here. 

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