It started with a hunt for new revenue and ended with protracted budget negotiations. Sandwiched in between were a bridge collapse, a shuttered Port of Baltimore, and a short-lived bid to enact a sales tax on professional services.
Without question, it was a legislative session to remember for Maryland’s General Assembly, which brought its 2024 proceedings to a close Monday night with its traditional end-of-session sine die festivities.
It was a busy session for the profession. No fewer than 2,714 bills were introduced during the session, with the MACPA and its legislative volunteers providing written testimony on 17 and in-person testimony on five.
Topping the list was House Bill 1515, titled “Sales and Use Tax — Rate Reduction and Services,” which would have reduced the sales tax rate from 6% to 5% but extended the 5% sales tax to various everyday services that were previously untaxed, including accounting services. CPAs rallied in opposition to the bill and ultimately helped defeat it, with Senate and House leadership each opting to submit budget proposals without expanded sales taxes.
The two sides came to an agreement on those proposals on April 3, crafting a final budget that introduces targeted tax and fee increases while avoiding a broad-based tax hike like a sales tax on accounting services. The budget will notably impact car registrations and nicotine product purchases, raising approximately $400 million annually for state funds.
Mary Beth Halpern, the MACPA's director of technical services and regulatory affairs, outlined these key takeaways from the new state budget:
- Vehicle-related fee increases: The budget introduces an array of vehicle-related fees estimated to generate between $320 million and $350 million annually. These include increased registration fees, particularly for heavier vehicles, a new fee for electric vehicles, a statewide ride-hailing service fee, and elevated fines for speeding in highway work zones.
- Tobacco and nicotine tax hikes: An additional $80 million per year is expected from increased taxes on tobacco and nicotine products. The tax on tobacco will rise by $1.25 per pack, with corresponding hikes for vapes and smokeless tobacco products.
- Revenue allocation: Funds from vehicle-related fees will support the Transportation Trust Fund for road and transit projects. Increased tobacco taxes will fund the Blueprint for Maryland’s Future.
- Excluded proposals: The finalized budget omits proposals for online gambling legalization and a corporate tax reform that would have mandated combined reporting for multi-state corporations.
The bottom line for CPAs: Thanks, as always, to our tireless volunteers, this year's General Assembly crossed the finish line without significant impacts on the MACPA's legislative agenda.
Next year may tell a different story, and we'll need your continued support in three key ways going forward.
- Stay vigilant: Follow our legislative updates in our Connect communities and on our blog. We’ll keep you posted as developments warrant.
- Join us at CPA Day: The 2025 edition of CPA Day in Annapolis will be held on Jan. 16. Mark your calendars and save the date. Join us there in person. It will be more important than ever to turn out in force and make our voices heard.
- Support our PAC: Issues like this are perfect examples of why supporting our political action committee is more important than ever. Through con tributions from members like you, our PAC is able to work toward favorable outcomes on legislative issues that affect CPAs, educate legislators about matters that are important to the CPA profession, and keep MACPA members informed. Your generous contribution will help ensure Maryland CPAs have a voice in Annapolis and will help ensure a vibrant CPA profession in the future. Learn more and donate today by visiting MACPA.org/advocacy.
Read more about this year's legislative session below.
