SALT Cap & Tax Paying for Pass-Through Businesses in Maryland

The proposal to expand Maryland’s sales tax to professional services was defeated by state lawmakers Wednesday night. A House of Delegates subcommittee that reviews tax changes rejected the sales tax bill on a unanimous, bipartisan vote in a late-night voting session. The next step is the recommendation will go to the full committee for a final vote as early as today.
While the subcommittee vote to kill the bill shows that the House heard and received the upswell of opposition from the business community—a tax on services is still very much in play this session. The House is also considering a bill that was heard in Ways & Means on Monday, House Bill 1354, which expands the sales tax to a list of specified services which the bill sponsors have deemed “luxury” services. It presently includes things like marina services, golf memberships, jewelry and watch repair, dog walking to name a few. The subcommittee moved to table the vote on HB 1354 until later.
Additionally, in the Senate, leaders are considering their own possible bills around the sales-tax expansion by looking to increase the cigarette tax, allowing sports betting, and taxing digital downloads and digital ads.
Katzabosch will continue to monitor this legislation and keep you posted on its developments and how it may impact you.

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