This is the best news I could wake up to this morning. Tweets by Delegate Eric Luedtke (District 14) stating that the legislation (HB 1628) Sales Tax Proposed On Professional Services In Maryland has been shot down in subcommittee. Here is the text from his tweets last evening:

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)

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My favorite part of the tweets above…”voted unanimously to kill HB 1628″. I guess every person on that subcommittee realized how much this legislation would have hurt small businesses and residents of all income levels. Thank goodness it has gone away this year.

I checked and the recorded subcommittee vote is not online yet this morning…when it is I will update this article.

Sometimes advocacy does work and the number of people and organizations that came out against this bad legislation worked. Good job everyone.

My concerns from his tweets above include:

  • A bill to modernize our tax code to ensure that digital goods are taxed in the same way we tax similar non-digital goods

Didn’t the Maryland Legislation try and tax “Digital Goods” just last year (HB 426-2019) for the Transportation Trust Fund and it was “withdrawn by sponsor” in committee.

The new bill in the house is HB 932 (21st–Century Economy Sales Tax Act) and in the Senate SB 1001. While I have not dug through all of the legislation yet the basics are every song, video, ringtone (why in the world go after this of all things), magazine subscription and NEWSPAPER subscription will be taxed if this legislation is passed. Maybe other things (I am not 100% sure if mobile apps you purchase for your kids are part of this also yet). I will have more on this in the near future.

For now we can all celebrate the fact that the expanded sales tax on every service is not going to happen.

Scott E

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