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Maryland and Connecticut Updates

On Wednesday, the Budget and Taxation Committee of the Maryland legislature held a public hearing on SB 824, the bill for Maryland Internet sales tax. This bill would require out of state merchants to collect sales tax in Maryland if they had Maryland affiliates. Similar to the New York , Rhode Island and North Carolina Internet sales tax laws, it sets a threshold of $10,000; once that level of sales is reached, the merchant must collect and remit the sales tax.  A couple of Affiliates testified, in addition to proponents of the bill. The Committee will weigh the testimony and information received and then vote. A favorable vote will send the bill out to the full Senate for further debate and vote.

The fiscal analysis for this bill indicated it will bring in an estimated $7.1 million. Although they admit the amount may be lower. They reference NYS collecting an estimated $70.0  million ( not a typo – that’s Seventy million) for the fiscal year ending March 31, 2010 as a result of online sales tax and North Carolina’s estimated $8.2 million.

There is a lot of support for this bill, just as there was last year.  In addition to contacting legislators to voice opinion, Affiliates should continue to prepare their business model in order to minimize the impact of the law should it pass.

As I reported in greater detail the other day, the Connecticut hearing on HB 5481, the Connecticut Internet sales tax was held on Monday. See Report on the Connecticut Hearing for full details.  The committee is evaluating the testimony and will then vote. There is also a lot of heavy support for this bill which is the same as last years bill. Legislators allowed plenty of time this  to complete work on the bill.

As with other states , Affiliates are urged to be diligent and prepare their business model. This means identifying replacement merchants for all vulnerable merchants.

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