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Annapolis, Md. (March 12, 2025) — The voices of Maryland business owners filled the Parley Room Patio in Annapolis today as dozens gathered to speak out against the proposed 2.5% tax on business services (HB 1554/SB 1045). Their message was clear: this tax would devastate businesses, eliminate jobs and ultimately harm Maryland residents and communities. This gathering came just hours before more than 100 business leaders testified in opposition — both in person and virtually — against the bill, with over 400 opposing it overall.
“Today we heard the real human impact behind the numbers,” said Mary D. Kane, President & CEO of the Maryland Chamber of Commerce. “These aren’t just businesses — they’re families, communities and dreams built over decades that are now at risk because of this misguided tax proposal.”
Press conference speakers included Maryland small business owners and the leaders of several business and trade associations:
· Jeff Wilson, Principal, The W2 Group
· Sandip Patel, CEO, Crosswinds Hospitality
· Julianno Buonanno, CEO, TechSlice
· Kimberly Prescott, Prescott HR
· Mary D. Kane, President & CEO of the Maryland Chamber of Commerce
· Cailey Locklair, President of Maryland Retailers Alliance
· Bill Chambers, President & CEO of the Salisbury Area Chamber of Commerce and Chair of the Maryland Chamber Federation
· Rebekah Olson, CEO of the Maryland Association of CPAs
Coalition Leaders United in Opposition
Business and trade association leaders expressed unified opposition to the proposed tax, emphasizing its far-reaching impact on Maryland’s economy.
“We understand the state faces fiscal challenges, but creating a hostile business environment is counterproductive,” said Cailey Locklair of the Maryland Retailers Alliance. “Growing our economy by supporting businesses is the path to sustainable revenue, not taxing the very services businesses need to operate.”
“Small businesses are the heart of Maryland’s economy and are still recovering from years of challenges,” added Mike O’Halloran, Maryland State Director, of the National Federation of Independent Business. “This tax targets the essential services they rely on to function. Our members operate on margins that simply cannot absorb these additional costs without cutting jobs, reducing wages, or closing altogether. This is exactly the wrong approach at exactly the wrong time.”
Bill Chambers, President & CEO of the Salisbury Area of Commerce and Chair of the Maryland Chamber Federation, emphasized the local impact: “Our members are deeply rooted in their communities. They sponsor Little League teams, donate to local charities, and create jobs for our neighbors. This tax would force them to cut those community investments first. The ripple effect will touch every corner of our region.”
Rebekah Olson, CEO of the Maryland Association of CPAs, also weighed in: “As CPAs, we have a unique understanding of the impact this proposed tax will have — not just on our own businesses, but on the many clients we serve. From small business owners to large enterprises, the message is clear: this tax will raise operational costs across the board, forcing businesses to make difficult choices that could include layoffs, price hikes, or, for some, even relocating out of state.”
Businesses Across Maryland Echo Similar Concerns
While dozens of business owners attended the press conference, many more from across Maryland have shared their concerns but were unable to participate in the press conference. Their stories echo the same themes:
A veteran-owned construction company in Pasadena shared: “I built my business in 2011 from nothing and the savings I had in my account. If this bill passes it will force me to close my doors due to increased costs on payroll, supplies, employees and overhead. This will not only hurt me but will cause my employees who have families to become unemployed.”
An engineering firm facing annual cost increases between $100,000-$150,000 warned: “Our clients include nationwide corporations that allow us to provide our services in numerous states. Any increase in taxes will put us at a significant disadvantage when we compete against other firms in other states.”
A St. Mary’s County retail owner who has operated for 10 years shared: “My business has never recovered from the pandemic. Inflation almost did us in. All of the uncertainty around federal jobs has people holding onto their money right now. I can’t afford any more taxes. My lease is up in less than a year. I am not sure I am going to renew. I’ve been here ten years. I can’t afford Maryland. One less business and resident.
An Anne Arundel County IT services provider estimated costs exceeding $50,000 annually and explained: “If this tax were implemented, it would encourage our customers to use services operated by companies in other states. It would also encourage me to move my business out of state and just offer services remotely to Maryland to avoid paying the tax.
A Baltimore-based tech company expressed concerns over the proposed 2.5% B2B services tax: “The business climate in this state is becoming increasingly uncertain, and if this law passes, relocation will become a serious consideration. With thin margins since COVID, any new taxes could push my business to a breaking point.”
A Montgomery County accounting firm facing more than $50,000 in annual tax costs shared: “Many clients have already moved out of state. There is already a shortage of accountants and severe workload compression. We are already overworked and this would add an enormous amount of hours handling both our own tax matters and those of our clients.”
Impact Goes Beyond Business Owners
Kane emphasized that the consequences extend far beyond business owners to employees, families and communities across Maryland: “When a business owner is forced to cut staff, that’s a Maryland family losing income. When a business relocates across state lines, that’s lost tax revenue and community investment. When a company closes its doors, that’s a dream extinguished and a hole in the fabric of a local community.”
Speaking on behalf of the coalition of business and trade associations and business leaders, Kane concluded: “The constant barrage of new taxes, fees and mandates on businesses must stop. Each new burden makes Maryland less competitive, drives businesses to neighboring states, and ultimately harms the very economy we’re trying to grow.
Sustainable funding for critical services depends on a competitive economy that attracts investment and fosters growth. This tax and others that treat businesses as an unlimited source of revenue moves Maryland in the wrong direction, at a time when we need to be doing everything we can to encourage job creation and continued investment.
This approach is unsustainable and counterproductive. We’re asking lawmakers to partner with us on solutions that strengthen our economy rather than continually adding costs that weaken it.”
The House Ways and Means Committee and Senate Budget and Taxation Committee are scheduled to hear testimony on the bills today at 1:00 p.m. and 3:00 p.m., respectively.
Coalition Members
The press conference was organized by a coalition that includes:
· Maryland Chamber of Commerce
· Maryland Retailers Alliance
· National Federation of Independent Businesses
· Maryland Chamber Federation
· American Property and Casualty Insurance Association
· Apartment & Office Building Association of Metropolitan Washington
· Associated Builders and Contractors of Metro Washington
· Association and Council of Automotive Repair
· International Franchise Association
· Mid-Atlantic Petroleum Distributors Association
· Maryland Association of CPAs
· Maryland Association of Realtors
· Maryland Building Industry Association
· Maryland Hotel Lodging Association
· Maryland Multi-Housing Association
· Maryland Motor Truck Association
· Maryland Restaurant Association
· NAIOP Maryland
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