Hundreds from the service industry packed the House of Delegates in Annapolis Wednesday to protest a proposal to add sales tax to a long list of services including telephone and cable, tanning, massage and beauty treatments, escort businesses and shoe repair.
Widely viewed as a test for future tax proposals to curb an impending $1.3 billion deficit, challengers including more than 550 Realtors said the bill targets vulnerable consumers. If passed, the law would exempt services provided by state agencies.
“The people hurt the most by this are the minorities, women, retirees, laid-off workers and people seeking new opportunities,” said Joe Mancuso, who owns a staffing firm.
The added sales tax could generate as much as $313 million by 2008 and $761 million by 2012, according to a report compiled by the state Department of Legislative Services. Several surrounding jurisdictions, including Pennsylvania, New Jersey, Washington and West Virginia, tax some services, though similar bills were introduced unsuccessfully in Maryland in 2001 and 2004.
A group of auto shop owners said they fear an expansion of the sales tax into select services could open a floodgate for future additions. Wearing buttons saying “I?m a Realtor and I Vote,” agents from across Maryland also testified against the bill.
“Real estate is already one of the most taxed purchases you make,” said Ilene Kessler, president of the Maryland Association of Realtors. “You have the property tax, transfer tax and a recordation fee. Housing prices are at an all-time high, and one more will make it worse.”
This one of several proposals aiming to boost revenue.
jmalarkey@baltimoreexaminer.com
