ANNAPOLIS, Md. (WJZ) — Maryland lawmakers are on a path to imposing a sales tax on travel agencies.
Political reporter Pat Warren reporters the six percent tax received Senate approval Tuesday.
The bill sponsors say collecting a six percent sales tax on bookings through travel agencies closes a loophole, but opponents say it puts Maryland travel agents at a competitive disadvantage.
“It hurts small businesses. It hurts consumers as well. And it also will hurt Maryland as well because Virginia did not pass this tax,” said Jay Ellenby, Safe Harbors Travel Group. “People can certainly go over the river to Virginia as opposed to staying in Maryland for hotels.”
Comptroller Peter Franchot argues that the state is only collecting what it’s rightfully due, and is suing online companies for back taxes.
But it’s the small agencies, 89 percent of which employ fewer than ten people, that will feel the pinch.
“It could be loss of jobs if they were to absorb that cost. But really, just like any other tax, it’s then passed down, it’s passed to the consumer. So at the end of the day, this is another consumer tax.”
The bill is still on its journey through the General Assembly. Next stop: the House of Delegates.
A spokesperson for the governor tells WJZ he has not yet taken a position on the bill.