Senate Committee Briefed on Expanding Sales Tax to Services and Internet Sales

At its July 26 meeting, the Senate Budget and Taxation Committee was briefed by the Department of Legislative Services  on the current sales and use tax, and the taxation of services and internet sales.  Although the presentation identified services that could be taxed and the amount of estimated revenue, committee members stated that this was part of an educational process and that nothing was under consideration.   The Committee also heard from the Maryland Chamber of Commerce and the Maryland Retailers Association regarding the pros and cons of expanding the sales and use tax to include more services and internet sales.

According to the Baltimore Sun:

Legislative services analysts prepared a chart to show how much additional revenue the state could make by taxing engineering services, cable television, automobile repair, golf and other matters. If the state imposed a 6 percent tax on those and a dozen other services, it could bring in at least $1 billion more each year, the department estimated.

Taxing goods purchased over the Internet — remote sales — would bring Maryland another $184 million annually, one University of Tennessee study cited by legislative services showed. But an Internet sales tax is far more complicated, possibly involving federal approval.

MarylandReporter. com also covered the briefing and summarized the comments offered by the two organizations testifying.

“All of us are concerned about Maryland’s competitiveness,” said Kathy Snyder, president of the Maryland Chamber of Commerce, which has 800 members with 240,000 employees. “Applying the sales tax to professional services will create a loss of jobs” and “is not the way to go.”

The Maryland Retailers Association urged a tax on out-of-state Internet sales that compete with the stores of its members.

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