CCIA Opposes Maryland B2B Service Tax, Citing Harm to Small Businesses and Regional Competitiveness – CCIA

Washington – The Computer & Communications Industry Association is testifying today against Maryland HB 1554/SB 1054, which proposes a business-to-business (B2B) service tax that would place an undue burden on many Maryland businesses, creating a competitive disadvantage in the region and ultimately raising costs for consumers.

While Maryland faces budget challenges, implementing a B2B service tax would be just a short-term fix that risks long-term harm to the state’s economy. The tax would disproportionately impact small businesses, many of which operate on thin margins and lack the resources to absorb new costs. This could force businesses to make difficult choices to raise prices, cut staff, or reduce investments in growth.

Additionally, Maryland would become an outlier among its neighbors, as Virginia and Delaware do not impose similar taxes – creating an incentive for businesses to move operations or service providers across state lines. Unlike a traditional sales tax on final purchases, this B2B tax would apply at multiple stages of business operations, meaning companies would be taxed on services they purchase to run their business. These higher costs would ultimately be passed down to Maryland consumers, making the true financial impact far greater than the proposed 2.5% rate suggests.

The following statement can be attributed to Megan Stokes, State Policy Director for CCIA:

“Maryland’s businesses – especially its small businesses – shouldn’t be saddled with new, unnecessary costs that would weaken their ability to grow and compete. This tax would create significant financial strain, push some businesses to relocate, and drive up costs for Maryland consumers. We urge Maryland lawmakers to reject HB 1554 and SB 1054 and instead focus on policies that foster economic expansion and stability.”