Maryland Gov. Wes Moore said he will not sign off on a 'broad' business service tax; sugary drink tax is dead

Hannah Gaskill, The Baltimore Sun on Mar 17, 2025

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BALTIMORE — Gov. Wes Moore said Monday afternoon that the current version of a bill creating a “broad” new tax on business-to-business services will not be in the state’s final budget for fiscal year 2026.

“A broad [business] to [business] tax will not happen in the state of Maryland,” Moore said in Annapolis Monday.

Senate Minority Leader Steve Hershey, a Republican representing the Eastern Shore, said that it was “good” to hear the governor come out and “forcefully” say that the proposed 2.5% tax on business-to-business services would not move forward, but added that more detail is necessary before he can fully support Moore’s position.

“I think we have to understand what ‘broad’ means in that situation,” Hershey said. “It didn’t sound like he totally took it off the table, but it sounds like there might be some qualifiers in that that we’d want to understand and see what that means.”

Moore said that when he rolled out his budget in January, he had three “very clear guidelines”: reform the tax system so that it doesn’t severely impact the middle class, make Maryland more economically competitive and invest in people.

“That is exactly where I am to this day, and we have not moved and will not move from those three guidelines,” the governor said.

During his weekly news conference Friday, Senate President Bill Ferguson, a Baltimore Democrat, said that, though new taxes are the “last place we want to be” this session, the 2.5% sales tax on business-to-business services is “still on the table.”

“I think it is a very real possibility that some version of it is on the table in the final menu [of options” for bridging the budget gap, Ferguson said.

Additionally, according to Moore, legislation placing a new 2-cent-per-ounce excise tax on the distributors of sugary beverages, powders or syrups will not be moving forward this session.

“We also said that, in order to really support Marylanders — particularly working Marylanders, right now — that we had to be able to drive and get the cost of things down,” he said. “That’s why things like the soda tax will not happen in the state of Maryland, and the soda tax will not be included in the final budget.”

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