The Central Maryland Chamber (CMC) is a regional chamber of commerce composed of over 400 businesses and non-profits primarily located in Anne Arundel County, Baltimore County, Baltimore City, Carroll County, Harford County, Montgomery County, Howard County, and Prince George’s County. While the CMC has reviewed and taken a position on many pieces of legislation, the ones covered in the documents below  are the ones most impactful to Central Maryland’s business ecosystem. 

​2025 Small Business Services Tax

OVERVIEW

The Central Maryland Chamber of Commerce is Maryland's only regional chamber, proudly serving Anne Arundel County, Baltimore County, Baltimore City, Carroll County, Harford County, Montgomery County, Howard County, and Prince George’s County. With reaching over 2.8 million residents, we advocate for pro-business legislation. 
— expresses serious concern regarding legislation (HB 1554/SB 1045) that would expand the sales and use tax to business-to-business (B2B) services.

This legislation would apply new taxes to transactions between businesses for services such as accounting, landscaping, payroll and more, creating significant economic challenges for Maryland's business community.

This proposal isn’t just another tax — it’s a direct hit to Maryland’s small businesses. When a local restaurant, tech startup, or landscaping company has to pay more for services including accounting, human resources or IT support, they have two choices: raise prices on customers or cut costs elsewhere — often through job losses. That’s not an economic growth strategy. It’s an economic misstep.

Quick Links
House Bill 1554/Senate Bill 1045 (Full Text):
HB1554.pdf
SB1045.pdf
See list of Impacted Service Sectors

Be sure to reach out to Dewan Clayborn at [email protected] if you have questions or are in need of additional materials.

Testimony Guide

Sales and Use Tax – Taxable Business Services – Alterations

We encourage businesses and business associations to join the Maryland Chamber in expressing our concerns with a recent business services tax proposal. If you are willing and available to testify in-person or virtually during the House and/or Senate bill hearings (dates and times below), please let us know and see the details below. If you cannot attend or testify at the bill hearings, but would like to submit written testimony, please find sample letters below for both House and Senate bills.

Whether you’re submitting written testimony only, providing oral testimony, or both, we recommend signing up “unfavorable” as the position on the bill. Please note that the sign-up window to provide testimony (written and/or oral) is between 8:00 a.m.-6:00 p.m. two business days prior to the hearing.

Please sign up to testify for each bill – both the House and Senate versions. House Bill 1554 – Bill hearing scheduled for 1:00 p.m., Wednesday, March 12 in the House of Delegates building (Annapolis).

Witness sign-up (both oral and written) – Must be completed between 8:00 a.m.–6:00 p.m. on Monday, March 10 (two business days prior to the hearing). Sign up instructions are attached to this email, and please also refer to the House Ways and Means Committee’s witness guidelines document: https://mgaleg.maryland.gov/pubs-current/current-wam-faqs.pdf

       In-person oral testimony – Must be no longer than two minutes. Please be prepared to spend most of the afternoon in Annapolis, as many members of the public will likely be providing testimony and there will likely be lengthy discussion on the bill from the committee.
       
      If you sign up to provide oral testimony, we suggest you still submit a letter. House bill sample letter is attached to this email.
       Written testimony – Please plan to submit a written letter during the sign-up window on      Monday, March 10 from 8:00 a.m.–6:00 p.m.

Senate Bill 1045 – Bill hearing scheduled for 3:00 p.m., Wednesday, March 12 in the Senate building (Annapolis)

Witness sign up (both oral and written) – Must be completed between 8:00 a.m.–6:00 p.m. on Monday, March 10 (two business days prior to the hearing). Sign up instructions are attached to this email, and please also refer to the Senate Budget & Tax Committee’s witness guidelines document: https://mgaleg.maryland.gov/pubs-current/current-bat-faqs.pdf
      In-person oral testimony – Must be no longer than two minutes. Please be prepared to spend most of the afternoon in Annapolis, as many members of the public will likely be providing testimony and there will likely be lengthy discussion on the bill from the committee.
      If you sign up to provide oral testimony, we suggest you still submit a letter. Senate bill sample letter is attached to this email.
      Written testimony – Please plan to submit a written letter during the sign-up window on Monday, March 10 from 8:00 a.m.–6:00 p.m.

If you have any questions about creating a MyMGA account, signing up for testimony, or anything else related to the press conference or bill hearings, please reach out to Liam Davis with The Fells Group who can assist you at [email protected].

Submit Testimony Here: https://mgaleg.maryland.gov/mgawebsite/Account/Login?registerId=Tracking

MyMGA Account Instructions for Testimony Sign-up: Testimony Sign Up Instructions.pdf

Sample Testimony Letters:
HB 1554 - Sample Testimony.docx
SB 1045 - Sample Testimony.docx

Sample Call to Action Email
Please feel free to edit and customize Option for Maryland Chamber Federated Partners Subject line: URGENT: New Business Service Tax Will Impact [INDUSTRY] Companies - Action Needed by [DATE TBD]

Dear [Organization Name Here] Members,

Maryland lawmakers are about to vote on a tax that will directly impact your business. The Maryland General Assembly is considering legislation (HB 1554/SB 1045) that would create a new 2.5% tax on essential business services that [INDUSTRY] companies rely on daily, including:
Accounting and bookkeeping services
IT services and software support
Consulting services
Marketing and advertising services
Administrative support services
[ADD INDUSTRY-SPECIFIC SERVICES]

How This Tax Will Impact Your Business

Direct Cost Increase: A company spending $200,000 annually on these services would pay $5,000 more each year in new taxes

Competitive Disadvantage: Your competitors in Virginia, Delaware, and Pennsylvania won't face these same costs

Future Expansion Risk: Once established, these tax structures historically expand to more services and higher rates

[INDUSTRY] Companies Need to Speak Up

Lawmakers need to hear directly from businesses like yours. The most effective way to stop this tax is through business testimony at the upcoming hearing on Wednesday, March 12 at 1:00 p.m.

Take Action Now:
1. Be prepared to sign up to testify at the House hearing on March 12 at 1:00 p.m. (3:00 p.m. in the Senate); in-person or virtual options available. As a reminder, the sign-up period is open two business days prior to the hearing date, Monday, March 10 between 8:00 a.m.-6:00 p.m.
2. Send a pre-written message to your legislators (takes less than 60 seconds) This tax proposal would create unnecessary burdens for [INDUSTRY] companies at a time when we should be focused on economic growth and competitiveness.

Speak up now or pay more later. The testimony sign-up window is from 8:00 a.m.–6:00 p.m. on Monday, March 10.

Sincerely,

Sample Social Posts

Please feel free to edit and customize

Options for X

Maryland's proposed 2.5% services tax isn't just a business tax — it's a tax on growth. Every dollar spent on this new tax is a dollar not spent on hiring, expansion or innovation. Tell lawmakers to vote ❌ NO on HB 1554/SB 1045.

Small businesses already operate on thin margins. Adding a new 2.5% tax to essential services like accounting and IT support could be the difference between profit and loss. Tell lawmakers to vote ❌ NO on HB 1554/SB 1045.

Virginia and Delaware don't tax business services. Why would Maryland make itself less competitive? The proposed services tax will drive businesses across state lines. Tell lawmakers to vote ❌ NO on HB 1554/SB 1045.

The real math behind MD's proposed B2B tax: $100K in business services = $2,500 in NEW taxes annually. For small businesses, that could mean one less employee hired. Tell lawmakers to vote ❌ NO on HB 1554/SB 1045.

Options for LinkedIn and Facebook

Attention MD Business Owners: Your Annual Costs Are About to Increase by Thousands
Maryland lawmakers are about to vote on a new 2.5% tax on the essential business services you pay for every day — accounting, IT support, consulting, payroll processing and more (HB 1554/SB 1045).

What this means for YOUR bottom line: A small business spending $200,000 annually on these services will pay $5,000 MORE each year.

This is equivalent to a month's salary for an entry-level position. Your competitors in Virginia, Delaware and Pennsylvania will pay $0 for the same services.

This isn't politics — it's your profitability. While you're operating on tight margins, Annapolis is looking at your business as a source of new tax revenue.

Is this the direction we want for Maryland's economy? Make your voice heard.

Maryland Business Owners: Speak Now or Watch Your Costs Rise
Maryland lawmakers will soon vote on a new 2.5% tax on essential business services you use daily — accounting, IT support, consulting and more (HB 1554/SB 1045).
The math is simple:
👉 A business spending $200K annually on these services = $5,000 in NEW taxes every year 👉 Your competitors in Virginia and Delaware = $0 in these taxes
👉 Your silence now = higher costs for years to come

This isn't just another piece of legislation — it's a direct hit to your bottom line and Maryland's business competitiveness.

Once established, these taxes historically only expand. Today's 2.5% on select services becomes tomorrow's higher rate on more services.
Your testimony matters. Please submit from 8:00 a.m.–6:00 p.m. Monday, March 10.

ACTION ALERT: MD Business Owners May Face New 2.5% Tax
Lawmakers are soon voting on a new 2.5% tax on your business services that will:
👉 Increase your operating costs
👉 Hit small businesses hardest
👉 Put Maryland at disadvantage to VA and DE
👉 Start small, then expand to more services
ACT NOW: Prepare your testimony today and submit from 8:00 a.m.–6:00 p.m. Monday, March 10.

Sample Sound Bites for Media Interviews
Please feel free to edit and customize

This isn't just a business tax — it's a consumer tax in disguise. These costs will inevitably be passed on to Maryland residents through higher prices.
Small businesses are the backbone of Maryland's economy. They don't have the margins to absorb this new tax without cutting jobs or raising prices.
2.5% tax might sound small, but for businesses operating on 3-4% margins, it's the difference between growth and stagnation.
When Virginia doesn't tax business services but Maryland does, where do you think new businesses will choose to locate? This tax makes us less competitive.
Once we start taxing business services, history shows the list of taxable services only grow — and the rates only increase.

Click on the links below to view the letters that the Central Maryland Chamber has signed on to in 2025:

Click on the links below to view the letters that the Central Maryland Chamber has signed on to in 2024:
Click on the links below to view the letters that the Central Maryland Chamber has signed on to in 2023:
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Click on the links below to view the letters that the Central Maryland Chamber has signed on to in 2020/21:
Click on the links below to view the Maryland Chamber of Commerce 2021 Bill Tracking & Legislative Priorities and the full 2019 CMC Legislative Tracker.

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