ANNAPOLIS, Md. (WBFF) — After the Bureau of Revenue Estimates revealed the state’s IT tax didn’t generate nearly the amount of revenue as originally expected, a new push has emerged to repeal the tax.
The BRE revealed the 3% IT and data services tax generated approximately $35 million in the first two quarters of the year, and revised numbers show it’s expected to bring in roughly $110 million this year, and $220 million next year.
“I mean, I think it’s really hard to know at this point. It’s early on,” Sen. Guy Guzzone, chair of the Budget and Taxation Committee, said when asked by FOX45 News if the revenue results indicated businesses moved out of Maryland. “It always is an issue of concern when estimates don’t make their mark. I think we need to let it roll a little longer.”
Republicans have argued the revenue generated wasn’t enough, and now they want to repeal the tax.
“We’re going to put in for repeal of that. Obviously, it doesn’t work,” Senate Minority Leader Steve Hershey. “Let’s show the IT industry, who we’re trying to create, and bring to Maryland that we can remove a tax that doesn’t work.”
Senate President Bill Ferguson, D-Baltimore City, rejected the notion that companies left Maryland as a result of the new tax. During a FOX45 News In Depth with Mikenzie Frost interview, Ferguson said he doesn’t see the tax getting repealed and argued the shift in the economy toward more data and technology-based companies proves the tax won’t impact everyone.
“There is rapid change happening in the technology sector, not just in Maryland, but across the country,” Ferguson said. “We believe that we’re going to see growth in technology, and we don’t want to put the tax burden on everyday Marylanders. We want to put it on corporations that we know are growing, so that we can have a much more fair and just society overall.”
When asked Friday, House Minority Leader Jason Buckel said the revenue estimates are often used by lawmakers as decisions are made during the legislative process, but the fact that the IT tax was off by hundreds of millions of dollars raises concerns.
“You either drove the businesses out of the state, which is what we said was going to happen, or there was no business here to begin with, which seems to be, you know, contrary to Governor Moore’s position, that we’re the center of the tech industry, which is kind of a joke,” Buckel said.
Economist Anirban Basu indicated the tax may have pushed out businesses, and said Maryland doesn’t have a competitive business environment.
“I mean, it’s [the tax] a massive failure because there’s a cost when you increase taxes, particularly on mobile firms and technology, because they can choose to expand elsewhere, whether in Virginia or Florida,” Basu said.
Sen. Hershey said there will likely be several amendments introduced on the floor as the budget plan emerges next week for full debate.
Follow Political Reporter Mikenzie Frost on X and Facebook. Send tips to mbfrost@sbgtv.com.
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