MARYLAND (WBFF) — Sitting inside Max’s Taphouse in Fells Point, owner Gail Furman discusses the stretch of vacant spaces near one of Baltimore’s most recognizable bars — something she sees as a warning sign for the state’s business climate.
“There’s a lot of empty storefronts,” Furman said. “We’ve never seen it this vacant before.”
After 40 years of running the popular taphouse, Furman said staying in business has never felt more difficult.
“I feel like the only thing not being taxed right now is the air we breathe,” she said.
Her frustration reflects a broader concern echoed by business owners, economists and industry leaders across Maryland, who say rising taxes, mounting operating costs, labor shortages and regulatory hurdles are making the state increasingly difficult for businesses to navigate.
They warn that when businesses struggle or leave, jobs and investment often leave with them, creating ripple effects across Maryland’s economy.
Maryland was home to 696,710 small businesses in 2025, accounting for 99.6% of all businesses in the state, according to the U.S. Small Business Administration Office of Advocacy. That figure was up from 668,365 in 2024.
Still, business leaders argue that growth in raw numbers does not tell the full story.
This year, WalletHub ranked Maryland second-worst in the nation for starting a business. Business leaders note Maryland’s 8.25% corporate income tax rate is among the highest in the region.
“It’s not very easy to do business here in Maryland,” said Mary Kane, president and CEO of the Maryland Chamber of Commerce.
Kane said high taxes, Maryland’s 3% tech tax, permit delays and complex regulations are pushing some companies to expand elsewhere.
High taxes, permit delays add to business concerns
Maryland’s corporate tax rate is higher than Virginia’s, which taxes corporate income at 6%; West Virginia’s, at 6.5%; and Pennsylvania’s, at 7.49%. Delaware has the highest rate among neighboring states at 8.7%.
“Economically, they have to pass these costs onto the consumer,” Kane said.
She notes the tech tax is particularly burdensome for companies operating on narrow profit margins.
“When you add a 3% tech tax onto a margin of only 5%, that’s a problem,” she said. “When you find that you can go to North Carolina and do it a lot cheaper and not have to pay that 3% tech tax, you’re going to do that.”
Scott Stevens, president at Modu-Tech in Baltimore, said many business owners are questioning what they receive in return for the taxes they pay.
“The rate of return we’re receiving, for the taxes and the investment in the state that we’re making, it’s not apparent where those investments are,” Stevens said.
For entrepreneurs, Stevens said, opening a new business presents a different challenge.
Established companies often have the staff and experience to navigate city and state requirements, but new business owners can find the process daunting.
“It’s a huge barrier to enter for a new business,” Stevens said.
One of the biggest obstacles, he said, is the time it takes to secure permits and approvals.
Spotlight on Maryland has reported on developers who waited years for permits while spending thousands of dollars on projects that generated no return.
“It’s been like that for years,” Stevens said.
Kane said prolonged delays can discourage investment and push companies to other states.
“When you put up those barriers to help them build or grow their businesses, they will go elsewhere,” Kane said.
Furman said she is candid with aspiring entrepreneurs about how long it can take to open in Maryland.
“They come in and we’re frank with them: ‘Look, if you think you’re going to open in two to three months, it’s going to take you a year.’”
Asked whether she would start a business like Max’s Taphouse in Maryland, knowing how long the process can take, Furman was blunt.
“Not here,” she said. “Elsewhere, yes.”
Labor and population losses
Daraius Irani, Chief Economist with Towson University’s Regional Economic Studies Institute, said Maryland is losing younger adults ages 18 to 24 and seniors 65 and older.
This is a trend Kane also shared with Spotlight on Maryland.
“We’re losing many of our younger workers,” Irani said. “Those are typically individuals who would be here for the longer term, would raise a family here and perhaps retire here.”
Furman said both groups are important to her business.
“Daytime business, when seniors would come in during the day, pretty much disappeared,” she said. “The younger people are fleeing for jobs where it is more cost-effective for them to live.”
But Furman is still doing OK. She has a full staff — some have worked at the taphouse for 30 years.
At Modu-Tech, partner Scott Stevens said hiring has become one of the company’s biggest challenges.
“The real challenge is the availability of labor,” Stevens said.
Stevens, who has been with the company for 34 years, estimates Modu-Tech has employed about 1,000 workers over the years.
“Less than five would you consider longtime, good employees,” Stevens said.
Gov. Wes Moore has highlighted that the state has added more than 55,000 new businesses and attracted 85 foreign companies since he took office. As The Baltimore Sun reports, the data shows a mixed picture.
The Maryland Chamber of Commerce “can’t speak to the methodology or framing used by the governor’s office” but did share the broader set of indicators it typically uses when evaluating the state’s business climate and economy.
Maryland recorded roughly 96,000 to 102,000 business applications annually from 2023 to 2025, according to the U.S. Census Bureau Business Formation Statistics. A spokesperson with the chamber explained “only a smaller subset of those applications were tied to businesses likely to hire employees or generate payroll.”
Business applications that planned to have a payroll have decreased from roughly 11,500 in 2023 to 10,200 in 2024 and 9,000 in 2025.
A call for more support
Furman believes state and local leaders should focus less on raising taxes and more on attracting visitors and supporting existing businesses.
“Promote to the outside areas to get people to come back in and support the businesses that you have.”
She is concerned there is not enough promotion on Sail250. Baltimore is part of a five-city national event that offers fleet, flight and festival activities to celebrate America’s 250th birthday. The events will take place from June 24-30.
It is also a great event for local businesses to gain new customers.
“Most people don’t know about the Sail250,” Furman said.
Her concern goes beyond her own bottom line. It is about whether Maryland can remain a place where businesses can grow and workers can afford to stay.
“You pay more and more taxes. It’s facts of life. We all have to pay taxes. Even when we die, we pay taxes,” she said. “I think people wouldn’t be upset about paying taxes if we still saw the same quality of services that we were used to getting.”
Spotlight on Maryland is a collaboration between FOX45 News, WJLA in Washington, D.C., and The Baltimore Sun. Have a story tip? Email spotlightonmaryland@sbgtv.com or call 410-467-4670. Investigative reporter Tessa Bentulan can be reached at tbentulan@sbgtv.com.
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