SALISBURY, MD. - A proposed bill in Maryland's capital is stirring debate as it aims to lower the state's sales tax from 6 percent to 5 percent while broadening its scope to tax services.
Initially, the prospect of a lower sales tax rate may seem appealing to consumers, with the potential for more money to stay in their pockets. However, the other aspect of the bill, which seeks to expand the sales tax to encompass a wider array of goods and services, has brought controversy.
Under the proposed legislation, everyday services such as haircuts, pet grooming, dry cleaning, and childcare, currently exempt from sales tax, would now be subject to it.
For individuals like William Hyle, a tipped employee at a hair salon in Salisbury, the potential increase in taxes raises concerns about reduced tips. "We survive off of tips, and I think that if we are taxed more then people will tip less," Hyle expressed.
Some residents, like James Allen, argue that services should remain untaxed. "The services I'm procuring there has anything to do with public taxes; I'd rather that relationship go to me and my barber," Allen stated.
However, others, like Ron Gilson, who do not regularly utilize the everyday services, express support for lowering the sales tax rate. "I don't use those other services every day. You know, once a week I come to the grocery store and what not," Gilson remarked.
However, Michelle Baker, owner of Michelle's Pretty Paws, foresees detrimental effects on small businesses if the bill passes. "At the end of the day, Delaware doesn't do this. Maryland is gonna start losing businesses to Delaware businesses because they don't want to spend the money, so they're gonna go elsewhere," Baker warned.
Baker added, "Already I get taxed on my income check, I get taxed when I go to the stores, I get taxed when I go to get gas station, I get taxed when I get my electric bill, my phone bill. So ultimately 50% of my money is going to the government. I'm working-we're all working in here working hard. I just think services should just be left where it belongs."
The proposed sales tax bill is currently under consideration by the committee in Annapolis. If approved, it would take effect in January.
A list of the proposed taxable services, but not limited to:
- Accounting and Financial services
- Child care services
- Legal and appraisal services
- Real estate services
- Shipping and delivery services
- Transportation, towing, parking, automotive services
- Home repair, cleaning and improvement services
- Dry cleaning and laundry services
- Salon and Barbershop services
- Advertising, printing and media streaming services