HAMPDEN, Md. — A proposed tax bill in the Maryland General Assembly could be bad news for small businesses that outsource for services.
Melissa Salzman, owner of Lovelyarns in Hampden, told WMAR 2 News she uses an accountant and a payroll company.
VIDEO: Small businesses worried about proposed sales tax
Those are two things that would be more expensive if Maryland lawmakers impose a 2.5% sales tax on business-to-business services.
Businesses paying for services like accounting, IT services, photography, marketing, and more would be expected to pay even more.
"I don't like that at all. I feel like that would be a big misuse of my funds. It just means money that I can't put back into my business, which makes my business grow, with then makes the community better as a whole," Salzman said.
She said if the tax bill is passed, the extra costs to her business would then be passed down to her customers.
"Which means the cost of goods is gonna have to go up. And I think nobody wants that to happen."
But Montana Bowman, owner of Balto Vintage, sang a different tune.
"I fulfill all my online orders, I stock the shop, I source everything," Bowman said. "My business is so small that my margins are low enough that I can't really afford to have other people do stuff, so I just wind up doing everything."
Like many other small businesses, he pays an accountant to handle the numbers.
But since that's all he outsources, he says he's not too worried.
"It's a small enough percentage that I can handle it. Obviously nobody wants to see their expenses go up, but it's not so much that I couldn't make it work with my business."
If passed, the bill is projected to bring nearly a billion dollars to the state next year.
The bill is up against a legislative deadline next Monday, March 17th, when bills have to cross over to the other chamber.
