There are two proposed Maryland tax bills that, if passed, have serious implications for advertising agencies, PR firms and even independents.
Senate Bill 152. Senate Bill 152 of the Budget Reconciliation and Financing Act of 2012 calls for a six percent sales tax on digital products, which include sound recordings, video, text or software files. There’s a potential that this could also affect digital services that we traditionally provide clients. Read MD Senate Bill 152.
Maryland House Bill 1051. In addition, Maryland House Bill 1051 is calling for a six percent tax to be imposed on many businesses and services, including “A MANAGEMENT, A MANAGEMENT CONSULTING, A PUBLIC RELATIONS, OR ANY OTHER BUSINESS CONSULTING SERVICE;”. Read Maryland House Bill 1051.
What do you think of these proposed taxes?
UPDATE Feb. 29, 2012
Many people have asked how they can help to oppose this bill. The Maryland Chamber Action Network summarizes next steps you can take: http://www.chamberactionnetwork.com/blog/view/next-weeks-hearing-on-imposing-sales-tax-on-services/. To quote them:
“1. Testify in opposition to the legislation during the March 6 hearing in the House Ways and Means Committee. The hearing will begin at 1 p.m. Anyone wishing to testify should arrive early and sign the witness register before the hearing begins. If you have written testimony, please submit 35 copies to the committee staff for distribution one hour prior to the hearing.
The Ways and Means Committee meets in Room 130 of the House Office Building, 6 Bladen St., Annapolis, MD 21401. There are twelve bills up on March 6, and the order that they are listed on the schedule is not necessarily the order in which they will be heard.
2. Let us know how this legislation would harm your business. If you oppose the bill, but can’t make it to the hearing, let us know how extending the sales tax to professional services would impact your company. Email Ron Wineholt at email@example.com.”
UPDATE March 5, 2012
What has PRSA-MD done to express their disagreement with these bills? Here’s a list:
- Messages to PRSA-MD members in our eNewsletter, beginning with the Feb. 27, 2012 issue
- Communications to PRSA-MD members and contacts via our social media channels (Twitter, Facebook, LinkedIn)
- This posting on our blog
- An email communication to our members on March 3, 2012 with very specific instructions/guidance on what they can do to fight the bills, including attending the March 6 Ways and Means Committee hearing and instituting a letter-writing campaign from PRSA-MD Chapter members to MD legislators expressing opposition to the bills.
- Issued a statement on our website
- Submitted a Letter to the Editor to the Baltimore Business Journal in response to this article
- Submitted an op-ed to the Baltimore Sun
- Sent a PRSA_MD WaysandMeansCmte ltr re HB1051
Take action!Attend the hearing on March 6 to oppose HB 1051 and send a letter to your legistature.
If you’d like, copy the below text into the body of your email or letter:
To my elected representatives:
I am a member of the Maryland Chapter of the Public Relations Society of America (PRSA-MD). Our members are primarily Maryland businesses in the public relations and communications industry. I write to express strong concern regarding the sales tax on public relations firms and consultants proposed in Maryland House Bill 1051 as well as the sales tax on digital products and services proposed in the Budget Reconciliation and Financing Act of 2012, SB 152/HB 87.
Imposition of the sales tax required by HB 1051 and SB 152 on services PRSA-MD members provide would increase the cost of these services by six percent and would put those businesses collecting the “new tax” at competitive disadvantage to companies in Washington, D.C., Virginia and Delaware. Furthermore, it provides an incentive for our Maryland PRSA-MD members to move to Virginia if either HB 1051 or SB 152 is enacted. Consequently, enacting these bills damages the vitality of the Maryland economy by targeting PRSA-MD members, a significant part of Maryland’s professional communications industry.
For the above-stated reasons, I respectfully request that any new tax on public relations firms and consultants or on digital products and services be rejected. I appreciate the opportunity to present our concerns to your committee.
Thank you for your thoughtful consideration in this very important matter.