- Maryland legislators are considering new taxes on businesses to address the state’s budget deficit.
- These proposals include a 2.5 percent business-to-business (B2B) services tax and a data broker gross income tax.
- The B2B services tax would apply to services like accounting, payroll, data and IT services, consulting, and asset management.
- The tax rate for these B2B services would be 2.5 percent, lower than the general 6 percent sales tax rate.
- Taxing B2B services or business inputs can lead to tax pyramiding, higher prices, and a shift in the sales tax burden to consumers.
- The B2B services tax is expected to generate significant revenue, but it could make Maryland less competitive for businesses.
- Exempting business inputs under the existing sales tax is a preferred option to make the sales tax more neutral and transparent.
Source: taxfoundation.org
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
