Yesterday I shared information from the Howard County Chamber of Commerce on “Sales Tax Proposed On Professional Services In Maryland” relating to HB 1628. In that article the Chamber notes:

“This piece of legislation would lower the sales tax from 6% to 5% but would expand that 5% sales tax to everyday services that have never been taxed before: legal services, accounting services, realtor services, home improvement, day care providers, gym memberships and auto services—just to name a very few.”

Day care was the big thing that caught my attention (trust me…I also noted ALL of the other services provided by businesses of all sizes). After watching some comments online I did a little more digging as to if day care would really be subject to this new tax on services.

District 14 Delegate Eric Luedtke made the following post on Twitter yesterday:

I am guessing this is in response to the announcement made by Governor Larry Hogan on February 20th:

I then went and looked at the legislation for HB 1628 to see what exemptions are noted…here is that list:

The North American Industry Classification System (NAICS) Sector 62 is noted as being exempt. If that means that all subsections under Section 62 are also exempt then it appears as if Child Day Care Services would be exempt.

Here is a listing of Section 62 of NAICS: https://www.census.gov/cgi-bin/sssd/naics/naicsrch?input=62&search=2017+NAICS+Search&search=2017. You will see that at the bottom of the page is listed:

624410   Child Day Care Services

So child day care services looks to be safe from the massive sales tax increases this legislation would cause in Maryland.

Just wanted to make sure the blog readers were aware of that fact this morning.

One last fun fact this morning about the legislation and who is exempt…this legislation exempts Political Action Committees (PACs)…because why would elected officials want to tax organizations that provide elected officials signifiant funding. The last exemption noted above (NAICS 8139) include PACS in subsection 813940 Political Organizations. I may have another article on this topic in the near future. Stay tuned.

Scott E