ANNAPOLIS, Md. (WJZ) — A sweeping tax proposal in Maryland has people sitting up and taking notice.
It is a sales tax on services, something Maryland doesn’t do now, but supporters say would bring in the hundreds of millions of dollars necessary to fund the new recommendations for improving public schools.
House Majority Leader Eric Luedtke said it’s time to look at the sales tax structure.
“Part of the issue is that, over time, our economy has become more services-based,” Luedtke said. “So the sales tax has been degraded over time. People are buying fewer things and more services.”
Governor Larry Hogan said he predicted this action, and it’s is why he opposes the Kirwan Funding recommendations.
“I specifically said they are going to raise the sales tax, and they swore they would not raise the sales tax, ” Hogan said.
He ticked off a list of services to be taxed.
“On daycare, on barbers, on dog walkers, on landscaping, on somebody that cuts your grass,” Hogan said.
While the bill expands the sales tax to cover services, it lowers the tax from 6 percent to 5 percent.
“I expect there’s going to be a lot of folks who have concerns,” Luedtke said. “I’m meeting with many of them already, and we want to talk through it and hear public input. This is at the end of the day another option on the table, but it’s not a certainty. We wanted to make sure we had the conversation.”
A similar proposal failed in the past, but Baltimore Delegate Maggie McIntosh said there’s also value in it for working families who buy more goods than services.
“This could end up actually helping the average family with kids who are in the stores and out of the stores,” McIntosh said. “I think really bearing the burden of our sales tax structure right now.”
A hearing is scheduled for March 3.