The COVID-19 pandemic has raged across retailers large and small with repercussions that will be felt long after the sting of the vaccine needles fade. Businesses across the state are struggling and when they suffer, their employees and consumers are directly affected. When the Maryland General Assembly convenes for the 2021 legislative session in January, the Maryland Retailers Association (MRA), in concert with Maryland’s business coalition, will be laser-focused on helping businesses weather the challenges we all currently face.
The MRA will focus on four major areas:
Protection from tax hikes and mandated operating costs
Revenue projections for the state, though not as dire as originally feared, are still lower than in previous years, and funding demands, such as the education funding increases recommended by the Kirwan Commission, are ever higher. As a result, lawmakers are considering new taxes that would be devastating to businesses, many of which are simply trying to maintain their livelihood amid the fallout of the pandemic.
Failed proposals from previous sessions are expected to be reintroduced in 2021, including a bill that would impose the state sales tax on services such as auto repairs, attorney, accounting services and trips to the barbershop. Premium pay legislation, which would require employers to pay premium wages on top of current wages, will be introduced in an effort to further compensate workers at the expense of the struggling businesses who employ them. Lawmakers are also poised to overturn Gov. Larry Hogan’s veto of HB732, which contains a provision that would tax revenue from digital advertising up to 10% — a new tax that will undoubtedly be passed directly on to small businesses that advertise digitally.
These types of taxes are often proposed without due consideration of the negative impacts they would have on small businesses and local economies. Expanded sales and services taxes result in consumers spending less or on fewer services rather than expanding their buy, leading to less revenue and slower economic growth in the community. Digital advertising taxes would be particularly devastating to small businesses that depend on drawing in customers through advertising.
The bill that proposed an expansion of the sales tax was quickly defeated in 2020 by a large business coalition, but HB732 was passed in the final hours of the abbreviated session without public input.
Small business relief
Early federal COVID-19 relief packages have run out and the governor’s recent aid package just begins to address help that businesses needed months ago. Small businesses are closing in record numbers with more teetering on the brink.
MRA strongly supports a small business relief package ranging from tax credits and deductions, to waiving fees and providing reimbursements or discounts for a variety of mandated business costs. MRA also seeks to protect small businesses from predatory lenders by advocating for legislation that requires transparency, regulation, licensing and capped interest rates.
In these desperate times, many small business owners were targeted by online predatory lenders offering assistance to help them stay open; in some cases they were charged interest rates up to 400%. Maryland is well overdue to end payday lending for commercial businesses.
Beer and wine sales
The COVID-19 pandemic has brought the long-simmering issue of beer and wine sales to the surface in Maryland. It is past time to allow grocery, wholesale, pharmacy and convenience stores to sell beer and wine. Opening this marketplace would create more convenience, more consumer choice and new jobs and revenue.
It would also address COVID multi-store safety shopping concerns for consumers. MRA has formed a coalition called Maryland Alcohol Choice to advocate for consumers and businesses on this issue. You can learn more at www.mdalcoholchoice.com.
Business Community Priorities and Defense
Maryland businesses have a stake in balancing the health and safety of their employees, clients and all Marylanders while sustaining and growing business operations, and MRA is dedicated to protecting the businesses that are doing it right. MRA is partnering with a statewide business coalition to seek liability protection from COVID-related lawsuits for responsible employers.
The business community is also concerned about the solvency of the Unemployment Insurance Trust Fund in the wake of unprecedented unemployment claims. Together, the members of the business coalition seek to insulate fragile Maryland employers from skyrocketing unemployment insurance rates.
Additionally, MRA will work with advocates to balance environmental initiatives to sustain and support businesses while also seeking clean air, water and pollution reduction.
Finally, and as always, MRA will primarily be playing defense. Many legislators see businesses as just another revenue opportunity rather than the backbone of our economy, but small businesses have never been more battered than they are right now. This is NOT the time to increase or levy new taxes, fees, or regulations. We need to help businesses heal so all Marylanders can get stronger.