Sales/Use Tax on CPA Firm Services

The SALT Shaker

Sales/Use Tax on CPA Firm Services

Currently in Maryland 12 specific services are subject to sales/use tax.  A bill has been proposed that would greatly expand the number of services subject to tax.  Two of these new services – cited below – will directly impact our practice:

11-101(m)

 (19) A tax preparation service

 (30) A management, a management consulting, a public relations, or ANY other business consulting service

 Almost every year this type of legislation is presented and thus far has been defeated.  The difference this year is that the legislation is sponsored by the powerful Chair of the House Ways and Means committee. I am concerned this bill will not “die in committee” as it has done in past years.

Additionally, the Governor’s Budget contains a new sales/use tax on “digital downloads.” There is a clause in this bill which could extend this new tax to e-filing of tax returns and CPE webcasts.

The state is looking for new revenue sources and they believe one of them could be the service economy. I try to not get worried about proposed legislation because the political world is too unpredictable but this may be the year some of these things become law.  Stay tuned.

The SALT Shaker is prepared by Andy Bareham, Chair of the KatzAbosch SALT Group

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