(Photo: Shutterstock)
A bill that would have levied a new tax on financial advisory services was unanimously pulled by a subcommittee of the Maryland House of Delegates. The HR 1628 Sales Tax and Services proposal would have lowered the state's sales tax from 6 percent to 5 percent, but expanded the tax to include the consumption of services like financial and legal advice, and the hiring of a real estate agent.
The bill was introduced by Maryland's House leader, a Democrat, and was strongly opposed by the state's Republican Governor, Larry Hogan.
Expanding the sales tax to professional services was a cornerstone of the bill, which purportedly would have raised $2.9 billion annually over 10 years to fund a re-haul of the state's public education system.
SIFMA, the Investment Company Institute, and Insured Retirement Institute submitted testimony to a revenue committee hearing earlier in the week, arguing, in part, that the tax would hit middle-income savers and deter adequate retirement savings.
While professional services like financial advice have historically not come under the fold of state sales taxes, more states are looking to tax previously exempted services in order to broaden the tax base.
Professional services—financial advisory, legal, medical, for instance—have been able to stave off attempts to be included in state efforts to widen tax bases.
"The imposition of a sales tax on services is an entirely new subject and should therefore be thoroughly examined before adoption in and form by the Maryland General Assembly," said Jason Berkowitz, IRI's chief legal and regulatory affairs officer, in a statement.
Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.
Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
