ANNAPOLIS, Md. - A key component of Gov. Wes Moore’s tax plan is facing strong opposition as lawmakers debate its potential impact on businesses.
The proposal, which includes an increase in business-to-business levies, has drawn criticism from business owners and local leaders. The bill, filed in both the House and Senate as SB 1045 and HB 1554, would impose a 2.5% tax hike on businesses utilizing services such as landscaping and IT support. Opponents argue that the change could devastate local economies and turn downtown areas into “ghost towns.”
In Annapolis, business owners and state leaders rallied against the legislation, holding signs that read “Your Legacy: Empty Storefronts” and “Save Maryland Businesses.”
“If this legislation passes, this is a clear assault on Maryland small businesses, and it has to be stopped,” said Bill Chambers of the Wicomico County Chamber of Commerce.
Chambers warned that the increased tax burden could be severe for businesses of all sizes.
“If you're a small business, it's going to be thousands of dollars. If you're a mid-sized business, it could be $50,000 to $100,000 in additional taxes,” he said.
Del. David Moon, a sponsor of the bill, defended the measure, citing Maryland’s estimated $3 billion budget deficit and the need for new revenue sources.
However, business owners like Sandip Patel, chief operating officer of Crossroads Hospitality, said the proposed tax would significantly impact operational costs.
“Monthly, most of our services are outsourced—accounting, landscaping, HVAC, payroll services, IT services,” Patel said. “Each of my hotels could see costs increase by $30,000 to $35,000.”
Patel added that if the bill passes, some hotel owners may consider relocating their businesses.
“We’re definitely looking into this because Maryland has been taxing us and basically treating us like an ATM machine,” Patel said. “I have many friends who own hotels in Salisbury and the Eastern Shore area. It’s going to be a big impact for all my hotelier friends.”
No final decision has been made on the bill. Further discussions are expected in the coming weeks as lawmakers weigh its potential economic consequences.