Note: This press release was provided by the Maryland Chamber of Commerce.
CALIFORNIA, Md. – General Assembly leaders have announced a 3% tech tax on small businesses (HB352/SB321). This policy would be disastrous for Maryland’s economy, businesses and jobs, undermining our future as a tech hub and leader.
Economic Impact
The implications of the proposed tech tax will impact over 15,000 employers and 99,000 jobs — with many more being affected indirectly. In St. Mary’s, this stands to impact 110 businesses. The service sectors primarily impacted, according to initial reports, include:
The licensing of media or software rights and other intellectual property
NAICS 518 (Data Processing, Hosting and Related Services)
- Cloud storage and application hosting (e.g., Google Drive, AWS, Dropbox, iCloud)
- Web hosting and server management
- Video and audio streaming support (e.g., Netflix, YouTube infrastructure)
- Data backup and computer data storage services
NAICS 519 (Other Information Services)
- Web search portals and online directories (e.g., Google, Bing)
- Digital and physical libraries, archives, and bookmobiles
- Reference libraries and research databases
NAICS 5415 (Computer Systems Design and Related Services)
- Website and software development services
- IT consulting and cybersecurity solutions
- Search engine optimization (SEO) and digital marketing tech
- Robotics and AI software design and support
- Computer disaster recovery and data security services
- Software installation and systems integration
NAICS 5132 (Software Design, Development and Publishing)
- Software and app development companies
- Video game design and publishing
- Business software providers (e.g., Microsoft, Adobe)
- Custom enterprise software solutions
The effects of this proposed tax extend far beyond harming one of Maryland’s fastest growing sectors. In today’s interconnected economy, tech services are a fundamental component for businesses across all sectors.
- Small businesses crushed: Every local shop that uses software, websites, IT support, or cloud services will face higher costs
- Jobs at risk: Employers facing sudden tax increases may freeze hiring or cut positions to manage new expenses
- Defense sector threatened: Critical defense contractors will struggle with increased costs, jeopardizing their competitiveness for federal contracts
- Main Street suffering: Family-owned businesses with thin margins will be hit hardest as essential tech services become more expensive
- Competitive disadvantage: While Virginia and other neighboring states attract businesses with incentives, Maryland risks pushing companies across its borders
CONTACT YOUR STATE LEGISLATORS – HEARINGS ON AMENDMENTS ARE NOW!
Senate:
District 29 Senator:
Senator Jack Bailey – jack.bailey@senate.state.md.us
House:
District 29 Delegates:
Delegate Brian Crosby – brian.crosby@house.state.md.us
Delegate Matt Morgan – matt.morgan@house.state.md.us
Delegate Todd Morgan – todd.morgan@house.state.md.us
Ways and Means Committee:
Chair – Vanessa E. Atterbeary – Vanessa.Atterbeary@house.state.md.us
Vice Chair – Jheanelle K. Wilkins – jheanelle.wilkins@house.state.md.us
Budget and Taxation Committee:
Chair – Guy Guzzone – guy.guzzone@senate.state.md.us
Vice Chair – Jim Rosapepe – jim.rosapepe@senate.state.md.us
Not like any of you republicans ever want to properly fund the government anyway. Taxes pay for services. If people want services, they have to pay taxes. No taxes, no services.
You lack an awareness how governments, taxes and regulations work. Taxes pay for “Government services”, not private sector. But normal people do not even have to read that far into your statement, when you start out with “you Republicans”, you discredit everything after that, and showing a lack of understanding of the way American politics work, by showing nothing but division, and “I am always right, and anybody who disagrees with me is wrong (while ignoring facts and evidence presented).” That shows high evidence of a mental disorder.
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