Maryland’s fiscal challenges are mounting. With a $2.7 billion budget deficit projected for the next fiscal year and a long-term shortfall of nearly $6 billion by 2030, lawmakers are weighing difficult decisions to close the gap. Among the potential solutions: expanding the sales tax to include professional services, including accounting. 

How a Sales Tax on Services Could Impact Maryland’s Economy

This proposal would have far-reaching consequences for CPAs, their clients, and Maryland’s economy.  It’s more important than ever for CPAs to come together and oppose this harmful tax policy.

Higher Costs for Small Businesses

Small businesses depend on CPAs for financial compliance, tax preparation, and strategic guidance. Taxing accounting services would add a financial burden to businesses already struggling with rising costs and economic uncertainty. Unlike larger corporations that have in-house resources, small businesses would be forced to absorb these costs or forgo essential professional advice, putting their financial stability at risk.

Exacerbating Economic Challenges

Maryland’s economic warning signs are growing increasingly concerning, with weak private-sector employment growth and a contracting housing market. Taxing services would further suppress economic activity by discouraging small businesses from investing in professional services they need to grow, amplifying existing challenges in Maryland’s fragile economy.

Double Taxation and Complexity

A sales tax on services increases the risk of "tax pyramiding," where taxes on services are compounded as businesses pass costs down the line. For small businesses, this means inflated prices for goods and services, making it harder to remain competitive. For CPAs, it creates additional compliance challenges, driving up costs for clients and reducing access to critical professional advice.

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Why CPAs Must Support the CPA PAC

The CPA PAC empowers Maryland’s CPAs to be a unified voice in Annapolis. Supporting the CPA PAC ensures that lawmakers understand the real impact of taxing services and provides the profession with the tools to push for sustainable, fair alternatives.

Through the CPA PAC, CPAs can:

• Defend Small Businesses: Advocate against harmful policies that increase costs for businesses, stifle growth, and limit access to essential professional services.
• Promote Sustainable Solutions: Encourage lawmakers to pursue balanced budget reforms that support economic growth rather than penalizing small businesses.
• Protect the Profession: Highlight the indispensable role CPAs play in fostering business success and financial health across Maryland.

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A Call to Action

Maryland’s fiscal challenges are undeniable, but taxing professional services is not the solution. Expanding the sales tax would burden small businesses, reduce economic activity, and harm the CPA profession. Supporting the CPA PAC is critical to safeguarding your profession, your clients, and the small businesses that are the foundation of Maryland’s economy.

Now is the time to act. Stand with the CPA PAC to protect small businesses, oppose harmful tax policies, and secure Maryland’s economic future. Together, we can make a difference.

Discover more ways to make an impact! Join us for our annual CPA Day, where we advocate for the CPA profession by meeting directly with legislators in Annapolis.