By Holden Wilen
Jan 22, 2020
Senate President Bill Ferguson defended a controversial proposal to implement a digital advertising tax while again advocating that Maryland needs to do a comprehensive overhaul of its tax code.
Ferguson, a Democrat from Baltimore City, has talked about the need for tax reform several times during the opening weeks of the General Assembly’s 90-day legislative session. He said Maryland has been using a 19th-century tax code in a 21st-century economy.
One of the early proposals, sponsored by Senate President Emeritus Thomas V. Mike Miller Jr. and Ferguson, would implement a digital advertising services tax. The bill’s goal is to tax large platforms like Facebook and Google.
“This is not the people doing the advertising, this is the platforms themselves,” Ferguson said.
Advertising industry experts believe the bill is unconstitutional and argue it would have a dramatic impact on small businesses. They said it’s likely Facebook and Google would pass the cost onto customers advertising on the platform. They also believe the bill’s language is too vague and does not clearly define what a digital ad service company is.
Ferguson tried to clear the air on the bill, saying it would only tax the gross annual receipts of global companies that make at least $1 billion worldwide.
A broader tax code overhaul will not happen this year, Ferguson said, but needs to take place within the next couple of years. To that end, Sen. Brian Feldman said he is sponsoring a bill to create a blue ribbon panel to do a comprehensive review of Maryland’s tax code and make recommendations to the governor.
Feldman’s bill, Senate Bill 233, would establish a 17-member “Commission on Tax Policy, Reform, and Fairness.” The Montgomery County Democrat said his bill is based on a similar effort that took place in Georgia.
Members of the committee would include:
- two members of the Senate of Maryland, appointed by the president of the Senate;
- two members of the House of Delegates, appointed by the speaker of the House;
- the Maryland comptroller, or a designee;
- the Secretary of Budget and Management, or the Secretary’s designee;
- a representative of the Maryland Association of Counties;
- a representative of the Maryland Chamber of Commerce;
- a representative of the Maryland Municipal League;
- a representative of the state Department of Assessments and Taxation, designated by the director of assessments and taxation;
- a representative of the Montgomery County Chamber of Commerce; and
- a representative of the Greater Baltimore Committee.
Gov. Larry Hogan would also get to appoint an economist, one member of the University of Maryland School of Public Policy’s faculty and one member of the faculty at the University of Maryland Robert H. Smith School of Business.
Hogan would also appoint two members of the public who are either an attorney or an accountant knowledgeable about the state’s tax structure.
To read the full story, visit the Baltimore Business Journal’s website.
Source: Baltimore Business Journal