Who Are Democrats Trying to Fool?

An Emergency Bill from the Senate President is a Red Herring

Maryland Democrats are poised to override a number of Governor Larry Hogan’s vetoes, including a tax on digital service.

Maryland Matters reports that Senate President Bill Ferguson is trying to do an end-around on Governor Hogan’s attempts to rally support for sustaining the veto by filing an emergency bill addressing the issue:

But there’s a new wrinkle to the continued debate ― an emergency bill filed by Senate President Bill Ferguson (D-Baltimore City) on Friday that he says will prevent tech giants from passing along an estimated $250 million tax on digital advertising to Maryland small businesses.

When you review the text of the bill, however, the proposed language does anything but:

(C) A PERSON WHO DERIVES GROSS REVENUES FROM DIGITAL ADVERTISING SERVICES IN THE STATE MAY NOT DIRECTLY PASS ON THE COST OF THE TAX IMPOSED UNDER THIS SECTION TO A CUSTOMER WHO PURCHASES THE DIGITAL ADVERTISING SERVICES BY MEANS OF A SEPARATE FEE, SURCHARGE, OR LINE–ITEM.

The language says that you can’t directly pass on the cost of the tax as a separate fee. Many bars did this after the passage of the last hike on alcohol taxes, calling the tax the “O’Malley Tax” after former Governor Martin O’Malley.

But do Democrats really think that the cost somehow won’t be passed on to consumers? Do Democrats really think that this milquetoast language is going to prevent those businesses required to collect this tax from passing on the cost anyway.

Democrats are getting a lot of heat for the digital services tax, especially given the explosion in the use of digital services over the course of this pandemic. This bill is nothing more than a red herring, a lame attempt to give Democrats political cover for overriding the veto of a bill they never should have passed in the first place.

The right thing would be for Democrats to join Republicans in sustaining the Governor’s veto. However, SB 787 is a ridiculous attempt at Democratic blame-shifting. It too should not pass.