Today’s Washington Post features a story in which Senate President Thomas V. Mike Miller Jr. calls for a special session of the General Assembly this October to deal with the state’s projected $1.5 billion budget deficit.

“Offering his most detailed forecast to date of possible tax increases, Miller (D-Calvert) said he could envision raising the state’s sales tax, applying that tax to a range of services, imposing a surcharge on Maryland’s wealthiest taxpayers and raising the gas tax.”

With regards to the sales tax, Miller suggested raising it from 5 to 6 percent, but he did not offer any specifics regarding which services he’d like to see the tax expanded to cover.

The Maryland Chamber will continue to work in opposition to a sales tax expansion to professional services. We believe such an expansion would:

Hurt Small Business: Maryland is a small business state. More than 50 percent of private sector jobs are created by small companies. Expanding the sales tax to professional services hurts these small and growing companies the most. Large companies hire employees to perform many of the services under consideration. Small businesses are more likely to hire outside companies to perform these services, and therefore would be more likely to pay the proposed sales tax.

Damage Maryland’s Competitive Posture: Most of the services mentioned during the legislative session are not taxed by our regional competitor states. Expanding the sales tax to these services will be harmful to Maryland’s business climate. No Maryland business, or consumer, is more than 45 miles from another state.

Cause Administrative Nightmares: There is a reason most states don’t attempt to impose a sales tax on services. It is almost impossible to administer. Consider the nightmare of trying to identify where the taxable transaction took place. For example, what if a Maryland-based engineering company is working for a client headquartered in Virginia on a project for the client’s location in North Carolina. Is the sales tax in Maryland, Virginia, or North Carolina? This sort of problem caused Florida to repeal its broad services sales tax just a few months after it had been enacted.