Maryland Business Owners Oppose Proposed Tax Increases Before Budget Vote

BALTIMORE, Md. — Maryland business owners are calling on state lawmakers to withdraw a proposed $1.6 billion increase in taxes and fees as the 2025 legislative session nears its end. In a series of interviews, local entrepreneurs expressed their concerns about how the new fees could impact both their businesses and the state’s economy.

One major point of contention is a new $5 tire fee, recently added to the Senate budget plan, that would apply to each new tire sold. If approved, purchasing a full set of tires would increase by $20. Operations manager Todd Huff, of a family-run automobile repair shop, stated, “I think it’s insane. They’re talking about trying to protect the middle class, but it’s the middle class that’s driving the cars and buying the tires.”

According to estimates, the state expects the new tire fee will generate approximately $24 million in revenue to address budget shortfalls.

Huff, who has operated his business for over 80 years, indicated he may need to relocate to Pennsylvania where he believes tax conditions are more favorable. “We just keep getting taxed and burdened with more garbage coming out of Annapolis,” he explained.

Another significant proposal that has business owners on edge is a controversial 3% tax on digital services, which passed in the House of Delegates this past Wednesday. Todd Marks, CEO of Mindgrub Technologies, expressed that this tax could jeopardize his operations in Maryland, stating, “If the tax is passed, I will have to move or go out of business in this state.”

State budget documents suggest that this new technology tax could generate up to $497 million, making it the largest revenue contributor among the proposed increases. Marks fears that such measures could lead to an exodus of businesses from the state, saying, “They don’t get it, but they will. One way or another, they’re going to get it when their legacy becomes the biggest exodus of business in the state of Maryland.”

As discussions on the budget continue, concerns are mounting over the potential impact of these taxes on Maryland’s economy and small businesses. Despite Governor Wes Moore‘s promises to improve business conditions in the state, both Huff and Marks argue the proposed budget framework has fallen short of realistic support for their operations.

Governor Moore’s office has attributed the state’s current $3.3 billion budget deficit to previous fiscal policies. Spokesperson Carter Elliott mentioned that the former administration proposed spending down more of the state’s cash surplus than was necessary, which contributed to the shortfall.”

“Yes, we’re suffering a $3.3 billion deficit, but we can’t just raise more money because the problem is we have a dwindling population,” Marks said. The sentiment among business owners aligns with his view that the government should focus on cutting spending rather than increasing taxes.

The Senate is scheduled to hold its first floor debate on the proposed budget on Monday, and lawmakers are weighing the implications of these measures on Maryland’s business landscape. In the meantime, resident families may see some tax relief; an average family of four with a taxable income of about $100,000 is expected to receive a reduction of approximately $53 in state income taxes for the upcoming fiscal year.