Bill Positions

Bill Number: SB 824

Bill Title: Sales and Use Tax - Online Sales Presumption

Bill Sponsor(s): Sen Madaleno, et al

Subject: Budget & Taxation

Committee: B&T

Bill Summary: This bill attempts to impose sales and use tax on sales of tangible personal property when an out of state vendor has (1) an agreement with a Maryland resident that provides compensation for sales referrals, including by an Internet website link; and (2) sales to Maryland customers referred by Maryland residents having such agreements exceeding $10,000 for the preceding 4 quarters.

History: In 2009 SB 1071 died without a vote in the Budget & Taxation Committee.

Chamber Position: Oppose

Position Summary: Other states are currently litigating similar laws that attempt to assert nexus for taxing such sales from out of state vendors. This bill is constitutionally suspect, and would waste the state's resources in attempting to impose sales taxes on remote transactions that are beyond its authority to tax. The bill would impose significant costs on businesses, as such a minimal nexus standard would require businesses to comply with the divergent sales tax laws of over 8,000 taxing jurisdictions around the country. A more sound approach to address taxation of remote sales would be to move Maryland toward implementation of the Streamlined Sales Tax Agreement.

Position Statement:

Chamber Staff: Ronald Wineholt

General Assembly: Click here to view the bill on the Maryland General Assembly's website.