I woke up to some great news this morning as I got an update from our team via txt and a look at our hashtag #MDTaxonServices and following the tweets from the Bill’s sponsor, Delegate Eric Luedtke.

Late last night the Revenue Subcommittee of the House Ways & Means Committee voted unanimously to kill HB 1628 Sales Tax on Services. The next step is the recommendation will go to the full committee for a final vote as early as this Friday.

While this is great news and an example of the legislators listening to the business community, we are far from done. It’s not over until the confetti comes down on April 6th at midnight for Sine Die.

A second bill with a narrower scope HB 1354 is still in the Ways and Means Committee and contains a list of services to be taxed. And then there is the Senate and their possible bills.



Tweet from Majority Leader Luedtke about the vote to kill HB 1628 at 9:10pm from the Subcommittee

In his series of 10 tweets he outlines his thoughts on how they might fund Kirwan in the last thirty days of the General Assembly. Pay attention to tweets #3, and 5 below where he talks about combined reporting and closing corporate loopholes (HB295, SB24 and SB311, digital goods tax (HB 695).

“Today in the Ways and Means Committee, we advanced the Blueprint for Maryland’s Future, a once in a generation opportunity to make sure all Maryland kids have world class schools. Afterwards, the Revenues Subcommittee moved a funding package. (1)

Given tremendous concern from the public and from small business owners, the Revenues Subcommittee voted unanimously to kill HB 1628, the proposal to expand the sales tax to cover most services. Instead, we moved a smaller, well thought out package of revenue bills. (2)

These include a bill to close corporate tax loopholes by implementing combined reporting and the throwback rule in our corporate income tax. This bill also has language to help small businesses hurt by the federal changes to the SALT deduction… (3)

Legislation to increase the tobacco tax and apply it to vaping products, which in addition to helping fund the Blueprint will help reduce smoking rates and improve public health… (4)

A bill to modernize our tax code to ensure that digital goods are taxed in the same way we tax similar non-digital goods, and one to eliminate a tax giveaway from the federal Trump tax cuts… (5)

And two additional pro-small business bills from @LilyQiMaryland to create a technical assistance program and matching grants for the federal Small Business Innovation Research (SBIR) program. (6)

Taken together, these bills get us much of the way to fully funding the Blueprint, though future legislators and Governors will have more work to do to fund the final few years of the plan. And they make our tax system more fair and help many Maryland small businesses. (7)

They will move to full committee on Friday, and the House floor next week, and then we will work with our colleagues in the Senate as they consider our ideas as well. I’m looking forward to discussing this well-reasoned package with them. (8)

But while the revenue package is important, the bill it supports is more important still. It’s a moral stain that our state doesn’t give every kid a great education. Providing it is also the key to our economic future. (9)

In a decade in the legislature I’ve never done more important work than helping pass the Blueprint and figuring out how to fund it. I’m honored to have the opportunity to do this work. (10)

I am reminded of one of my favorite quotes Alex de Tocqueville in the book, Democracy in America where he says,

“From then on, they are no longer isolated men and women but a power one sees from afar, and a voice to which one listens.”

Thanks to all of our members who made time to attend CPA Day in Annapolis, testify at variouys hearings, write letters, and our 100% membership firms who give us strength in numbers!

Follow the latest on our legislative advocacy on our blog by bookmarking this link.

Latest Press on HB 1628

Baltimore Sun Maryland lawmakers defeat sales tax expansion that was pitched as way to pay state’s share of Kirwan education improvements

Washington Post Maryland lawmakers reject bill to expand the state’s sales tax

Washington Post Taxing digital ads could bring Maryland $250 million — and a hefty legal challenge

Accounting Today Is Maryland’s digital service tax innovative or insane? 

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