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A  bill that would have levied a new tax on financial advisory services wasunanimously pulled by a subcommittee of the Maryland House of Delegates. The HR 1628 SalesTax and Services proposal would have lowered the state's sales taxfrom 6 percent to 5 percent, but expanded the tax to include the consumption of services likefinancial and legal advice, and the hiring of a real estateagent.

The bill was introduced by Maryland's House leader, a Democrat,and was strongly opposed by the state's Republican Governor, LarryHogan.

Expanding the sales tax to professional services was acornerstone of the bill, which purportedly would have raised $2.9billion annually over 10 years to fund a re-haul of the state'spublic education system.

SIFMA, the Investment Company Institute, and Insured RetirementInstitute submitted testimony to a revenue committee hearingearlier in the week, arguing, in part, that the tax would hitmiddle-income savers and deter adequate retirement savings.

While professional services like financial advice havehistorically not come under the fold of state sales taxes, morestates are looking to tax previously exempted services in order tobroaden the tax base.

Professional services—financial advisory, legal, medical, forinstance—have been able to stave off attempts to be included instate efforts to widen tax bases.

"The imposition of a sales tax on services is an entirely newsubject and should therefore be thoroughly examined before adoptionin and form by the Maryland General Assembly," said JasonBerkowitz, IRI's chief legal and regulatory affairs officer, in astatement.

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