MSBA Focuses on Tax Proposals and Security for the Profession in the 2025 Legislative Session
Lawmakers in Annapolis are addressing the state’s budget deficit and looking for new revenue sources and economic growth opportunities to fund Maryland priorities in the 2025 legislative session. On the table are proposed tax cuts and increases, given the state’s projected historic budget deficit. High-income earners may face a tax increase while Governor Moore claims that nearly two-third of Marylanders will see their state taxes decrease. The budget proposal also includes lowering the corporate tax rate to encourage more business relocation and expansion in Maryland, eliminating the inheritance tax, and lowering the estate tax exemption. Federal policy changes from the new administration are also a consideration for lawmakers and advocates, given the potential impact on federal jobs, benefits programs, and funding for state programs.
As legislators consider new revenue sources to address the deficit, MSBA will keep an eye on funding and tax bills. In 2020 and 2024, lawmakers proposed lowering the sales tax but expanding the tax to include legal services and other professional services. MSBA successfully defeated the prior proposals and remains ready to address any tax on legal services in the 2025 session. MSBA recognizes the current budget constraints and funding gaps for state priorities, but any proposed tax on legal services is not an equitable solution for Maryland businesses or those seeking legal services.
MSBA recognizes the current budget constraints and funding gaps for state priorities, but any proposed tax on legal services is not an equitable solution for Maryland businesses or those seeking legal services.
The safety and security of judges, attorneys, and other court personnel is essential to protect the profession and the public and to allow over 42,000 attorneys and judges in Maryland to work without fear.
MSBA’s Legislative Priorities for the 2025 session include:
1. Opposing a Tax on Legal Services:
MSBA opposes any proposed sales tax increase that would tax legal services given the dramatic impact it will have on all aspects of the legal profession, as well as the reduced ability of individuals and businesses to access legal services.
Large law firms and corporations in Maryland will have an incentive to relocate out of state given tax advantages and increased competitiveness.
The proposed sales tax will discourage out-of-state clients to continue hiring Maryland law firms, as they would not have to pay a tax with comparable specialists out of state and will look for a more competitive rate in neighboring areas.
Small businesses that seek legal guidance and representation will face financial challenges with the proposed tax as they lack the ability to afford in-house legal departments and may forgo legal advice altogether given the cost.
A sales tax will lead to increased administrative costs to track, calculate, and process sales tax on billings and receivables, with a higher cost that could be passed on to clients.
A tax would hinder access to justice for vulnerable communities, undermining the fundamental principle of equal representation under the law.
The proposed tax creates ambiguity around what precisely constitutes a taxable service, potentially complicating compliance and enforcement efforts.
2. Promoting Judicial and Attorney Security:
The safety and security of judges, attorneys, and other court personnel is essential to protect the profession and the public and to allow over 42,000 attorneys and judges in Maryland to work without fear. MSBA will continue to support legislation and funding requests to enhance security for the legal profession, including modernizing court structures, protecting personal data and enhanced privacy, and preventing future harm.
3. Sustained Funding for Access to Counsel in Evictions Law:
MSBA joins its partner, Maryland’s Access to Justice Commission, in securing funding for the access to counsel in evictions law, and civil legal aid funding generally that allows attorneys to provide advice or representation to Marylanders navigate non-criminal legal issues affecting their livelihoods and families.
MSBA will continue to protect members, firms, and the future of the legal industry through ongoing advocacy and opposition to any proposed tax on legal services and support for the initiatives above.
MSBA serves as the collective voice of Maryland’s legal profession, representing the interests of lawyers across the state from nearly every practice area, career stage, and demographic. MSBA's nationally-recognized advocacy protects the profession on critical initiatives, including a proposed tax that would negatively impact all Maryland attorneys, ensuring the safety of the judiciary and attorneys, and securing civil legal aid funding. Your voice and expertise matter. They allow us to conduct the most effective advocacy as we work together to educate and inform our representatives. Join today at www.msba.org.