ANNAPOLIS, Md. – Today, members of the Senate Republican Caucus renewed calls for meaningful tax relief for everyday Marylanders and pushed for passage of legislation to ease the rapidly rising cost of living across the state, including a repeal of the automatic gas tax increase.
“The world has changed since we first introduced our tax relief package in January,” said Senate Minority Leader Bryan Simonaire. “While we were already experiencing record inflation and rising gas prices then, global events are putting even more pressures on Maryland’s household budgets.”
Repeating “The Netflix Tax”
The “Digital Downloads Tax” was passed during the 2021 Session during the worst of the COVID-19 pandemic after it was vetoed by Governor Larry Hogan in 2020. The “Netflix Tax” charges a new 6% sales tax on digital content including streaming services such as Netflix, Disney+, Spotify and Hulu as well as digitally downloaded content such as audiobooks, e-books and computer software.
The Netflix Tax also taxes critical tools for small businesses such as QuickBooks, Constant Contact, Mail Chimp, Microsoft Office, Google Workspace and much more, further adding to their costs of doing business during this time of rising inflation.
SB 735 calls for a complete repeal of the Netflix Tax and would return $100 million/year to Maryland’s working families. The bill has a hearing in the Senate Budget & Taxation Committee on Thursday, March 10th at 1:00pm.
Repeal of CPI Adjustment to Gas Tax
“Since we first introduced this bill on January 27th, the average price of regular, unleaded gas has jumped from $3.29/gallon to $4.19/gallon, are we are being told to expect prices as high at $7.00/gallon in the near future,” said Senator Michael Hough (Frederick), the bill’s lead sponsor. “We should take this opportunity to give Marylanders some relief at the pump and eliminate a hidden annual tax increase that should have never been passed.”
SB337 repeats the automatic and never-ending gas tax increase that was passed in 2013 and is a hallmark of the tax and spend legacy of the O’Malley Administration.
The State of Maryland currently increases the gas tax every year based on the CPI (inflation). With gas prices the highest they have been in seven years and inflation at a 30-year high, we need to stop the automatic gas tax increase. In 2021, the CPI was over 7% and will increase the gas tax proportionally by the same rate come July 1st and further increase the cost of living in Maryland.
If passed, SB 337 will repeal the automatic increase tied to the Consumer Price Index and save Marylanders $37.5 million in FY23 and $117 million by FY27.
SB337 was heard in the Senate’s Budget & Tax Committee on February 8th and has not yet received a committee vote.
Tax credits for travel, hospitality and entertainment
SB 622 establishes a tax credit program where Marylanders can write-off expenses for in-state travel, lodging and entertainment in 2022 and 2023. Qualified expenses must be made at least 50 miles from a principal residence and can include food and beverage, lodging, transportation, live entertainment and sporting events. The maximum credit is $500 for individuals and $1,000 for families per year.
SB 622 gives Marylanders an incentive to explore their home state and support Maryland’s hospitality and entertainment industries, which are still hurting from the COVID-19 pandemic. With gas prices on the rise, families are tightening vacation budgets, and this tax credit is a great incentive for them to keep their travel plans and our economic recovery on track.
“With an unprecedented budget surplus this year, legislators have the opportunity to deliver the kind of tax relief that will ensure continued economic recovery and prosperity,” said Senator Paul Corderman (Washington) and the bill’s lead sponsor. “SB 622 focuses directly on boosting Maryland entertainment and tourism, uplifting small businesses, and keeping more money in the pockets of Marylanders that choose to travel within our state.”
SB337 was heard in the Senate’s Budget & Tax Committee on March 2nd and has not yet received a committee vote.
Comparing Tax Relief Proposals
Proposals passed by the House last week amount to $95.4 million – just 2% of the budget surplus in FY23. Over the same period, Senate Republican tax relief proposals, combined with Governor Hogan’s Retirement Tax Reduction act, delivers $342 million in tax relief. By FY27 these proposals, would deliver more than 10 times more in tax savings.
“We appreciate the bipartisan effort to provide tax relief through the bills passed in the House, but we agree with our Republican colleagues across the street that we can and we should give Marylanders a larger share of our state’s $4 billion surplus – which is, after all their money,” said Senate Minority Whip Justin Ready. “Marylanders desperately need broad-based tax relief, not the nibbling around the edges we’ve seen from the Democrat leadership. These Senate Republican Tax Relief proposals go right to the source of the suffering we see in our state and would immediately begin reducing the rising cost of living for all Marylanders during these very difficult times.”