2025 Small Business Services Tax

OVERVIEW

The Maryland Chamber of Commerce, representing more than 7,000 businesses — large and small, across every industry, and in every corner of the state — 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 Vice President of Marketing & Communications Abbi Ludwig 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