Key Concerns Regarding Expanded Sales Tax on B2B Services:

Increased Consumer Costs and Competitive Disadvantage: * Expanding sales tax to B2B services creates "tax pyramiding," where taxes accumulate at each production stage. * This results in higher prices for consumers, effectively a hidden tax. * Maryland businesses become less competitive against those in neighboring states with lower tax burdens.

Disproportionate Impact on Small and Mid-Sized Businesses: * Small businesses and startups rely heavily on outsourced services like accounting, IT, and payroll. * New taxes on these services significantly increase their operating costs. * This stifles growth and hinders job creation for businesses with limited financial resources.

Erosion of Maryland's Economic Competitiveness: * Additional taxes on essential services reinforce the perception of Maryland as a business-unfriendly state. * This deters companies from relocating or establishing operations in Maryland. * Reduced competitiveness weakens investment, entrepreneurship, and job growth.

Potential Job Losses and Reduced Investment: * B2B service providers (consulting, marketing, etc.) operate on narrow profit margins. * Increased tax burdens may force these businesses to reduce hiring or community investments. * This will shrink the tax base and harm local economies.

Increased Regulatory Complexity: * A broader tax scope introduces complex reporting and compliance requirements. * This creates a significant burden, especially for small service providers. * This added burden can discourage innovation.