More Topics:
New Tax Could Cripple Maryland Ad Agencies
Posted February 9, 2012
We Recommend...
Governor Martin O'Malley has proposed a new sales and use ("sales tax") tax on "digital products." If it passes, it could impact your business.
Currently, Maryland's sales tax applies to tangible personal property. Digital products are generally considered intangible personal property, and are therefore not subject to Maryland sales tax. With this law, that would change.
While the Governor maintains that the new tax is limited in scope to digital download versions of products sold in box stores, the tax bill includes any sound recording, video, text or software files. The bill's broad language could also be used to target digital services, including media services we provide to clients.
By including digital goods delivered to advertising and marketing clients, the proposed law could increase the cost of doing business by 6%.
The result: Many clients - already crunched by the economic downturn - may shift their business to agencies in nearby jurisdictions without such a tax - namely, Washington, DC or Delaware.
Additionally, if the law passes, it would create a nightmare for taxpayers as the Comptroller's office struggles to develop workable and enforceable guidelines as to what is taxable and where a transaction takes place.
WHAT CAN YOU DO?
The AAF Baltimore Legislative Committee urges AAFB members to:
1. Write your Maryland legislators asking them to delete the language imposing a new sales tax from the Budget Reconciliation and Financing Act of 2012, SB152 Click here to read bill.
2. Bring your voice to Annapolis on February 14, 2012 AT 8 am to Fight the Ad Tax.
3. Consider attending the AAF Baltimore Sales Tax Workshop on February 23. Attorneys Gary Hyman and Cynthia Sanders from law firm Ober|Kaler will discuss the proposed increased tax burden in a workshop covering common sales tax compliance issues that AAFB members face.
AAF BALTIMORE SALES TAX WORKSHOP
Thursday, February 23, 2012
8:00 AM
Radisson Hotel at Cross Keys
5100 Falls Rd
Baltimore, MD 21210
Members: $20
Non-Members: $30
Full breakfast and refreshments will be served.
For reservations, contact Linda Stanley at director@baltimoreadvertising.com or call 410-821-6968.
blog comments powered by