Maryland Society of Accounting and Tax Professionals Opposes House Bill 1515: Proposed Legislation Threatens to Burden Practices and Clients

The Maryland Society of Accounting and Tax Professionals (MSATP) strongly opposes House Bill 1515, which aims to reduce the sales tax rate while simultaneously expanding it to cover a wide range of services. If enacted, this misguided legislation would place undue burdens on accounting and tax practices, as well as on the individuals and businesses they serve.

Under the proposed changes, many services provided by accounting and tax professionals would become subject to the sales tax for the first time. This means that in addition to paying more for these essential services, Marylanders would also face the headache of sales tax compliance on tax preparation and accounting. Small businesses and lower-income individuals would be hit especially hard.

But the impact goes far beyond our own industry. HB1515 would impose the sales tax on virtually all services, with only narrow exceptions. From haircuts to home repairs, Marylanders would pay more for services across the board. Businesses, already struggling with inflation and economic uncertainty, would be saddled with a slew of new compliance costs and recordkeeping requirements. This is the last thing they need.

The bill’s sponsors may believe that the sales tax rate reduction offsets the harm of taxing services. But this view ignores the disproportionate impact on service-based businesses and lower-income households. It also disregards the sheer complexity of complying with sales tax rules for the vast universe of newly taxed services. The rate cut is little more than a fig leaf.

We at MSATP stand united with our members and the broader business community in opposing HB1515. This bill is fundamentally flawed and cannot be salvaged. Lawmakers should reject it outright and pursue responsible tax policies that support economic growth and opportunity for all Marylanders.

To our valued members, rest assured that we hear your concerns and are working tirelessly to defeat this legislation. We will keep you apprised of developments and provide resources to help you navigate these proposed changes and make your voice heard. Together, we will continue to advocate for an environment in which accounting and tax professionals, and the clients we serve, can thrive.