As a general rule, Marylanders should always be on guard when they hear the phrase “tax fairness” or “tax simplification” from the Democrat leadership in Annapolis. It was similar phrases that ushered in the largest tax increase in Maryland’s history just a few short years ago. In an atmosphere where there is allegedly little appetite for any tax increases we find HB 337 – Streamlined Sales and Use Tax Agreement, which has a hearing in the Ways and Means Committee on Wednesday, February 18th. While pitched as a bill about fairness and accountability it is actually little more than a back-door tax increase. The ultimate goal of this bill is to force online retailers and catalog companies to collect and remit Maryland sales tax even if they have no physical presence in the state.
Legislators who are proponents of this bill will tell you this is pro-businesses legislation – interesting since these are the same people whose tax policies caused Maryland’s business climate ranking to drop from 24th to 45th in less than a year. If you want to see what this type of legislation does to business you need only look a bit north to New York who passed similar legislation this summer. Overstock.com pulled all of it’s business out of the state almost immediately and Amazon.com is fighting the law in court – that is how pro-business this type of legislation is.
The truth about this bill is that tax-and-spend liberals are salivating at an opportunity to capture what they consider “revenue leakage”. Estimates of exactly how much revenue is leaking vary widely. Supporters of this type of legislation say that nationally the range is $19-$27 billion while others put the number much lower $3.2-$4.5 billion. In Maryland, the number sits at just over $500 million – half a billion dollars in additional taxes foisted on the citizens of Maryland if this bill moves forward. Once this frenzy of catching “revenue leakage” begins, where does it end? Will we be putting agents from the Comptroller’s office at the Maryland/Delaware border to make sure everyone pays their “fair share”?