General Assembly to Consider Bill to Tax Certain Business Services

The General Assembly will consider a bill to levy the general sales and use tax on certain business services. Services in Maryland are generally not taxable.

Every state that has a sales tax also has a use tax on the purchase of goods and services as defined by law. State sales taxes apply to purchases made in Maryland while the use tax refers to the tax on goods purchased out of state. Sales and use tax revenues are the State’s second-largest source of general fund revenues.

HB 1354 – Sales and Use Tax – Services, sponsored by Delegates Lorig Charkoudian and Julie Palakovich Carr, would apply the Maryland sales and use tax to the following services:

  • Cleaning or storage services;
  • A golf course or country club membership
  • Marina services
  • Art moving or storage services
  • Tanning
  • Tattooing or piercing
  • Interior design or decorating services
  • Dog walking
  • Boat repair
  • Watch, clock, or jewelry repair
  • Scheduled or nonscheduled air transportation
  • A travel arrangement or reservation service
  • Lobbying

Maryland lawmakers are considering a number of tax reform proposals to fund the Blueprint for Maryland’s Future, which implements the recommendations of the [Kirwan] Commission on Innovation and Excellence in Education.

HB 1354 is scheduled for a hearing before the House Ways and Means Committee on February 28th at 1:00 pm.

Useful Links

Conduit Street Podcast: Kirwan Blueprint Bill and Tidbits Around Town

MACo on Kirwan Blueprint: Rely on State Funding

HB 1354 – Sales and Use Tax – Services

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