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Senate Taxes Digital Products And Raises Tobacco Tax

Rachel Baye

The state Senate passed two changes to the sales tax on Tuesday night. One of the bills extends the sales tax to digital products, such as e-books and streaming services. The other raises taxes on tobacco products.

Both bills were originally crafted to raise money for the expensive school overhaul plan proposed by the Kirwan Commission. However, they have both been amended. If approved by the House, the measures would fund efforts related to the coronavirus outbreak in the immediate future.

Sen. Andrew Serafini, a Washington County Republican who co-sponsored the digital product tax, said it’s not a new tax, but rather a modernization of the state’s existing sales tax.

“We’re catching up to the way that we collect taxes,” he said. “Not new, just adapting to the way of the economy, so I’ll challenge anybody that wants to talk about this being a new tax.”

Sen. Sarah Elfreth, a Democrat representing Annapolis and the chamber’s youngest member, said her experiences as a millennial back up what Serafini was saying.

“I do not have cable. I use mostly streaming services and mostly purchase movies and rent movies with digital download. The same thing with music,” she said. “I have not paid a sales tax on any of those things.”

Several Republicans said the tobacco tax is another story.

Senator Justin Ready of Carroll County said this is the wrong time to raise taxes.

“Small businesses are really afraid right now,” Ready said. “They’re afraid because of the coronavirus. They’re afraid because of what’s going to happen to the economy, their ability to make a living to stay open.”

The House has until the end of the day Wednesday to sign off on the Senate’s amendments.

Rachel Baye is a senior reporter and editor in WYPR's newsroom.
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