The clock is ticking at the Maryland State House to advance bills and address a looming $3 billion budget deficit without two new proposed taxes.Governor’s update on budget: 2 tax ideas nixedThe governor declared that a broad business-to-business service tax and a sugary drinks tax would not be included in the final fiscal year 2026 state budget.Administration officials said the B2B tax, as introduced, is now off the table, but a targeted service tax remains under consideration.”The broad business-to-business tax will not be in the final budget. So, the broad B2B tax will not happen in the state of Maryland,” Moore said Monday afternoon. “The soda tax will not happen in the state of Maryland, and the soda tax will not be included in the final budget.”| BUDGET: Supplemental Budget (PDF) | FY2026 budget highlights (PDF) | Full story The bill that proposed a 2.5% tax on business-to-business services drew fierce opposition from store owners, and big companies, like McCormick, threatened to leave. It was expected to generate $1 billion in revenue.Negotiations between the governor’s office and Democratic legislative leaders started Friday and continued on Crossover Day, 11 News has learned. Administration officials described the meetings as productive conversations and unfinished.Raw video below: Watch the governor’s Monday afternoon remarksAccording to administration officials, some form of a sales tax on services is still in play, but details on how much and for what services remained unspecified and were said to be part of ongoing negotiations.A 2-cent tax per ounce on sugary drinks, powders and syrups left a sour taste in the mouths of the governor and legislative leaders. The $500 million that could have been generated from the For Our Kids Act would have gone toward free school meals, child care subsidies and the state’s general fund.”The impacts of this Trump administration are real … This would be a hard session in normal times, and these are not normal times,” Moore said. “The direct assault that we are seeing from the federal government is unprecedented, but I want the people of our state to know that this administration will meet the moment of crisis with courage, and we’re going to be OK.”Republicans respond: ‘We remain cautious’Senate Minority Leader Steve Hershey, R-District 36, said he remains skeptical that the bill is completely off the table.”I think when he says there will be no broad business-to-business services taxes, yes, we are all waiting to hear what the word ‘broad’ means. Sounds like it’s still open to the possibility that there would be some,” Hershey said.House Republicans released a statement after the governor’s comments on taxes and the state budget.House Minority Leader Jason Buckel, R-District 1B, released a statement, saying, “While we are pleased that Gov. Moore has finally voiced his opinion on two significant revenue measures under consideration, we remain cautious. The governor chose his words very carefully. There is much he did not say, and he did not answer any questions. I would submit to you that neither Maryland’s businesses nor our taxpayers are entirely off the hook quite yet.”House Minority Whip Jesse Pippy, R-District 4, released a statement, saying, “We know two things to be true – the budget will not be balanced without significant cuts, and both the governor and the Democratic majority appear unwilling to make those cuts. They see their only option as new revenues. While there is some buzz about a possible hike in the sales tax, it is really anyone’s guess at this juncture.”Business community respondsMary Kane, president and CEO of the Maryland Chamber of Commerce, released a statement, saying: “We applaud the governor for joining with the thousands of Maryland businesses who oppose B2B taxes. A stronger, more competitive business climate that promotes economic opportunity is the only sustainable path to addressing our state’s fiscal challenges. When businesses can grow and thrive in Maryland, they create jobs, generate revenue and strengthen our communities. “While this decision is a step in the right direction, we must remain vigilant against any alternative proposals that could still undermine business competitiveness-including a slimmed down version of B2B tax services. Maryland doesn’t need new ways to tax businesses — it needs policies that make our state a destination for business investment and job creation. “Every policy decision should be viewed through the lens of whether it makes Maryland more competitive for business investment and growth. We stand ready to work with lawmakers on responsible solutions that strengthen our economy rather than burden it.”Bills must meet Crossover Day threshold to be consideredCrossover Day serves as a key deadline for a bill to pass from one chamber to the other to guarantee it is considered in the opposite chamber. Many lawmakers come to Crossover Day with virtual fingers crossed.”(It’s) high energy, I’ll say that. A lot of delegates are trying to figure out how to get their bills through at the last minute,” said House Economic Matters Committee Chairman C.T. Wilson, D-District 28.Frenzied pace in House, Senate considers multiple billsThe pace in the House moved quickly Monday as Republican members said they are convinced Democrats are considering a bill to raise the state sales tax by a penny. According to administration officials, an increase in the sales tax is not part of the conversation.”I think there is significant opposition, including from McCormick. Can you imagine the spice company leaving Maryland? So now, in a Hail Mary pass, they are now considering adding one penny to the sales tax,” said House Minority Whip Jesse Pippy, R-District 4.Delegates also debated legislation about the Piedmont Reliability Project, a proposed 70-mile, 500,000-volt transmission line that would be built across three counties.”The legislation will actually help with the transparency and improving the process for the Piedmont line,” said Montgomery County Delegate Lorig Charkoudian, D-District 20.”They replaced the line, and now they are doubling it,” said Baltimore County Delegate Kathy Szeliga, R-District 7A.Demonstrators greeted legislators Monday in support of a series of bills, including one that would require the state attorney general to establish guidelines limiting immigration enforcement at sensitive places, like schools, churches and medical facilities. The full Senate passed the bill Monday without discussion.The Senate also engaged in spirited discussion before passing legislation that would allow speed cameras to be posted away from construction zones on interstates 83 and 695.”I know people have said people are doing 100 mph. You know what? Someone going that fast is not going to slow down because of a speed camera. They are going to pay the $40 (fine), and that’s it,” said Sen. J.B. Jennings, R-District 7, whose district encompasses portions of Baltimore and Harford counties.The governor declined to answer questions but said he would have more to say later. There was no timeline released on budget negotiations.
The clock is ticking at the Maryland State House to advance bills and address a looming $3 billion budget deficit without two new proposed taxes.
Governor’s update on budget: 2 tax ideas nixed
The governor declared that a broad business-to-business service tax and a sugary drinks tax would not be included in the final fiscal year 2026 state budget.
Administration officials said the B2B tax, as introduced, is now off the table, but a targeted service tax remains under consideration.
“The broad business-to-business tax will not be in the final budget. So, the broad B2B tax will not happen in the state of Maryland,” Moore said Monday afternoon. “The soda tax will not happen in the state of Maryland, and the soda tax will not be included in the final budget.”
| BUDGET: Supplemental Budget (PDF) | FY2026 budget highlights (PDF) | Full story
The bill that proposed a 2.5% tax on business-to-business services drew fierce opposition from store owners, and big companies, like McCormick, threatened to leave. It was expected to generate $1 billion in revenue.
Negotiations between the governor’s office and Democratic legislative leaders started Friday and continued on Crossover Day, 11 News has learned. Administration officials described the meetings as productive conversations and unfinished.
Raw video below: Watch the governor’s Monday afternoon remarks
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You may be able to find the same content in another format, or you may be able to find more information, at their web site.
According to administration officials, some form of a sales tax on services is still in play, but details on how much and for what services remained unspecified and were said to be part of ongoing negotiations.
A 2-cent tax per ounce on sugary drinks, powders and syrups left a sour taste in the mouths of the governor and legislative leaders. The $500 million that could have been generated from the For Our Kids Act would have gone toward free school meals, child care subsidies and the state’s general fund.
“The impacts of this Trump administration are real … This would be a hard session in normal times, and these are not normal times,” Moore said. “The direct assault that we are seeing from the federal government is unprecedented, but I want the people of our state to know that this administration will meet the moment of crisis with courage, and we’re going to be OK.”
Republicans respond: ‘We remain cautious’
Senate Minority Leader Steve Hershey, R-District 36, said he remains skeptical that the bill is completely off the table.
“I think when he says there will be no broad business-to-business services taxes, yes, we are all waiting to hear what the word ‘broad’ means. Sounds like it’s still open to the possibility that there would be some,” Hershey said.
House Republicans released a statement after the governor’s comments on taxes and the state budget.
House Minority Leader Jason Buckel, R-District 1B, released a statement, saying, “While we are pleased that Gov. Moore has finally voiced his opinion on two significant revenue measures under consideration, we remain cautious. The governor chose his words very carefully. There is much he did not say, and he did not answer any questions. I would submit to you that neither Maryland’s businesses nor our taxpayers are entirely off the hook quite yet.”
House Minority Whip Jesse Pippy, R-District 4, released a statement, saying, “We know two things to be true – the budget will not be balanced without significant cuts, and both the governor and the Democratic majority appear unwilling to make those cuts. They see their only option as new revenues. While there is some buzz about a possible hike in the sales tax, it is really anyone’s guess at this juncture.”
Business community responds
Mary Kane, president and CEO of the Maryland Chamber of Commerce, released a statement, saying: “We applaud the governor for joining with the thousands of Maryland businesses who oppose B2B taxes. A stronger, more competitive business climate that promotes economic opportunity is the only sustainable path to addressing our state’s fiscal challenges. When businesses can grow and thrive in Maryland, they create jobs, generate revenue and strengthen our communities.
“While this decision is a step in the right direction, we must remain vigilant against any alternative proposals that could still undermine business competitiveness-including a slimmed down version of B2B tax services. Maryland doesn’t need new ways to tax businesses — it needs policies that make our state a destination for business investment and job creation.
“Every policy decision should be viewed through the lens of whether it makes Maryland more competitive for business investment and growth. We stand ready to work with lawmakers on responsible solutions that strengthen our economy rather than burden it.”
Bills must meet Crossover Day threshold to be considered
Crossover Day serves as a key deadline for a bill to pass from one chamber to the other to guarantee it is considered in the opposite chamber. Many lawmakers come to Crossover Day with virtual fingers crossed.
“(It’s) high energy, I’ll say that. A lot of delegates are trying to figure out how to get their bills through at the last minute,” said House Economic Matters Committee Chairman C.T. Wilson, D-District 28.
Frenzied pace in House, Senate considers multiple bills
The pace in the House moved quickly Monday as Republican members said they are convinced Democrats are considering a bill to raise the state sales tax by a penny. According to administration officials, an increase in the sales tax is not part of the conversation.
“I think there is significant opposition, including from McCormick. Can you imagine the spice company leaving Maryland? So now, in a Hail Mary pass, they are now considering adding one penny to the sales tax,” said House Minority Whip Jesse Pippy, R-District 4.
Delegates also debated legislation about the Piedmont Reliability Project, a proposed 70-mile, 500,000-volt transmission line that would be built across three counties.
“The legislation will actually help with the transparency and improving the process for the Piedmont line,” said Montgomery County Delegate Lorig Charkoudian, D-District 20.
“They replaced the line, and now they are doubling it,” said Baltimore County Delegate Kathy Szeliga, R-District 7A.
Demonstrators greeted legislators Monday in support of a series of bills, including one that would require the state attorney general to establish guidelines limiting immigration enforcement at sensitive places, like schools, churches and medical facilities. The full Senate passed the bill Monday without discussion.
The Senate also engaged in spirited discussion before passing legislation that would allow speed cameras to be posted away from construction zones on interstates 83 and 695.
“I know people have said people are doing 100 mph. You know what? Someone going that fast is not going to slow down because of a speed camera. They are going to pay the $40 (fine), and that’s it,” said Sen. J.B. Jennings, R-District 7, whose district encompasses portions of Baltimore and Harford counties.
The governor declined to answer questions but said he would have more to say later. There was no timeline released on budget negotiations.
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