The Computer & Communications Industry Association (CCIA) is expressing opposition to Maryland's proposed business-to-business (B2B) service tax, as outlined in bills HB 1554 and SB 1054. The CCIA argues that this tax would impose a significant burden on businesses within the state, particularly affecting small enterprises and regional competitiveness.
The organization highlights concerns that while Maryland is dealing with budgetary issues, introducing a B2B service tax could provide only temporary relief while potentially causing long-term economic harm. Small businesses, which often operate with limited financial flexibility, might struggle to handle additional expenses. This situation could lead them to increase prices, reduce workforce numbers, or cut back on growth investments.
The CCIA also points out that Maryland would stand apart from neighboring states like Virginia and Delaware if it were to implement such a tax since those states do not have similar measures in place. This discrepancy might encourage companies to move their operations or services out of Maryland. Unlike conventional sales taxes applied to final consumer purchases, the B2B tax would be levied at various stages of business operations. Consequently, the costs incurred by businesses are likely to be transferred to consumers in Maryland, amplifying the financial impact beyond the proposed 2.5% rate.
Megan Stokes, State Policy Director for CCIA, stated: “Maryland’s businesses – especially its small businesses – shouldn’t be saddled with new, unnecessary costs that would weaken their ability to grow and compete. This tax would create significant financial strain, push some businesses to relocate, and drive up costs for Maryland consumers. We urge Maryland lawmakers to reject HB 1554 and SB 1054 and instead focus on policies that foster economic expansion and stability.”
