The Week Ahead (Cyber Monday Edition)

Welcome back from the Thanksgiving break! Last week - in addition to consuming copious amounts of turkey, stuffing, cranberries, and pie - we blogged about #GivingTuesday (which is tomorrow) and the latest good news about employment in Maryland.

Neil Bergsman also appeared in a Washington Examiner story about upcoming MD budgets. We've asked the Examiner to clarify that MBTPI is not in favor of increasing the corporate tax rate. We do support a combination of reducing Maryland’s corporation tax rate while broadening the base - by reforming the tax code to make it harder for multi-state corporations to use accounting maneuvers to escape Maryland’s tax. This could modestly increase state revenues and reduce taxes for local businesses while making sure that large multi-state corporations pay their fair share. Neil also appeared in a story on holiday giving for the Gazette.

Today is also Cyber Monday, the traditional day when office workers spend their work hours shopping for online deals. Finding a deal online is fun, but remember that Maryland will lose $200 million dollars in owed but unpaid sales tax to internet retailers this year. Not only is that lost revenue for the state, but it represents more than $3 billion in lost revenue for local businesses and fewer Maryland jobs.

Monday, November 26th

• Alcoholic Beverages Article Review Committee reviews material dealing with the conditions for issuing licenses. 5pm in Judiciary Training Room 3, 2009F Commerce Park Drive, Annapolis.
• Community Services Reimbursement Rate Commission meets. 6-8pm in the basement conference room, Mental Hygiene Administration, 55 Wade Avenue, Dix Building, Catonsville.

Tuesday, November 27th

• Maryland Nonprofits, MBTPI, and many other nonprofits around the country take part in #GivingTuesday. You've heard of Black Friday, Small Business Saturday, and Cyber Monday. Now celebrate the important work done by nonprofits and give back to your community on #GivingTuesday.
• Land Use and Ethics Subcommittee and the Local Government and Bi-County Agencies Subcommittee (both a part of the House Environmental Matters Committee) jointly meet to review the "flags" identified in the new Land Use Article. 10am in room 250, House Office Building, Annapolis.
• Joint Information Technology and Biotechnology Committee meets to discuss digital textbook use in Maryland, electronic medical records, the Maryland Innovation Initiative, Cigarette Restitution Fund grants, stem cell research grants, and Invest Maryland. 1pm in room 231, House Office Building, Annapolis.
• Task Force on the Establishment of a Statewide Spay/Neuter Fund meets. 1pm in room 250, House Office Building, Annapolis.
• Interagency Committee on School Construction meets via teleconference to discuss the Baltimore City Block Grant MCR draft report. 3:30-4:30pm on the 8th floor, conference room 1, 200 W. Baltimore Street, Baltimore.
• Maryland Nonprofits offers Enhance Your Individual Donor Program. This is a Maryland Nonprofits training program, for more information or to register go to their events page.

Wednesday, November 28th

• Capital Budget Subcommittee and the Health and Human Resources Subcommittee (both a part of the of the House Appropriations Committee) goes on a site visit to the Prince George's County Health Care System. The visit begins at 11am. 
• House Environmental Matters Committee holds its retreat to discuss legislation for the next legislative session. 9am in room 250, House Office Building, Annapolis.
• Senate Education, Health and Environmental Affairs Committee and House Environmental Matters Committee jointly meet for a presentation on proposed regulations stemming from the Sustainable Growth and Agriculture Preservation Act of 2012. The presentation will be given by the Department of the Environment. 1pm in room 250, House Office Building, Annapolis.
• Joint Committee on Unemployment Insurance Oversight meets to discuss the status of the Unemployment Insurance Trust Fund, tax tables for 2013, the impact of the Modernization Act from 2010, implementation of the Victims of Domestic Violence Act from 2012, the legislative audit of the Division of Unemployment Insurance, and unemployment benefits for individuals unable to work due to cancer in other states. 9am in room 3 East, Senate Office Building, Annapolis. 
• Bureau of Labor Statistics releases metropolitan-level employment figures for October. 
• Maryland Nonprofits offers Forming a Nonprofit: Paperwork. This is a Maryland Nonprofits training program, for more information or to register go to their events page.

Thursday, November 29th

• Maryland Medicaid Advisory Committee meets. 1-3pm in the lobby level conference room, L-3, 201 West Preston Street, Baltimore.
• Maryland Nonprofits offers Streamlining Your Marketing Through Content Strategy. This is a Maryland Nonprofits training program, for more information or to register go to their events page. 

Giving Tuesday

This is an edited version of a post that originally appeared on the Maryland Nonprofits blog. Dawn Edwards, Director of Development for Maryland Nonprofits (our parent organization), is the author.

The holiday season is upon us…  If you failed to notice, you’re one of the lucky few that haven’t seen holiday decorations (already!!) festooning storefronts; and you’ve somehow avoided bombardment by Black Friday, Small Business Saturday, and Cyber Monday sales ads.  I can’t help but wonder, “what’s the rush?”  We barely have time to give thanks before we are encouraged to leave our tables to shop for that “perfect present” for everyone on our list.

This year there is  an alternative to the corporate takeover of the holiday season… it’s called #Giving Tuesday^TM.

#GivingTuesday, scheduled for Tuesday, November 27th, is a special call to action, culminating in a new, national day of giving. It is the first effort of its kind, designed to harness the collective power of a unique blend of partners – charities, families, businesses, and individuals – to transform how people think about, talk about, and participate in the holiday giving season.  The goals are to inspire people to take collaborative action to improve our communities, give back in better, smarter ways, and to help create a better world.  

If you are a nonprofit organization you can be a part of this ‘opening day’ to the giving season by becoming a partner.  Between now and November 27th, tell your donor community (really everyone in your network) about #GivingTuesday to inspire early giving…before the year-end tax deduction rush we are all too familiar with. 

As individuals, we encourage you be a part this new day dedicated to giving by donating to your favorite causes.  And spread the word about #GivingTuesday to everyone you know!

#GivingTuesday will prove that the holidays can be about both giving and giving back.  It will celebrate Americans doing more with their wallets than just shopping – and that we Americans can give as good as we get!

With just 7 days left until #GivingTuesday, how do you plan to "Get out the Give" this giving season?!

More information...
Read the Maryland Nonprofits press release on #GivingTuesday
#GivingTuesday on Twitter
#GivingTuesday on Facebook

Marketplace Fairness Act

Marylanders will avoid paying sales tax on roughly $3 billion in online purchases this year.  That works out to $184.1 million in lost state sales tax revenue, according to projections by the University of Tennessee (see Table 5, page 11).  U.S. Senator Ben Cardin wants to do something about that, which is why he cosponsored the Marketplace Fairness Act last fall.

I've written about the need for an internet sales tax previously (Cyber Monday highlights need for internet sales tax). Now apparently Memorial Day online sales are becoming a thing as well.  As time goes on the percentage of purchases which are made online will continue to grow.  Unfortunately, given the status quo that means that the amount of sales tax Maryland can expect to collect will likely decline.

The state's bank account isn't the only victim here.  Not charging sales tax on online purchases hurts local retailers who can't compete on price because they have to collect the tax. Consequently local businesses and the state can't afford to hire more employees, which in turn means that retailers lose further sales.

While there are actions Maryland can take to collect on some of these purchases (the governor has a few ideas), this is one policy area that can only be resolved at the federal level.  The Marketplace Fairness Act is a good start, but I fear it will languish in Congress.

Cyber Monday highlights need for internet sales tax

After the travel, after the turkey and stuffing, and after the Black Friday (or is it Thursday?) sales, comes Cyber Monday. In the days before widespread home internet access, this was the day when shoppers returned to work after Thanksgiving and began their holiday shopping online using their employer’s internet connection. Nowadays, it is a great opportunity for retailers to generate nearly $1.2 billion in sales nationwide.

However, from a state perspective Cyber Monday is a lost opportunity to collect funds necessary to provide vital services. When consumers purchase goods from brick and mortar stores in Maryland the retailers collect the sales tax and remit it to the state. Yet when a Maryland resident makes an online purchase, the resident is responsible for remitting the tax to the state, which few do. Remitting the tax on these purchases falls to the consumer because online retailers without a physical presence in Maryland are not required to collect the tax. According to some estimates, this cost Maryland upwards of $164 million in lost tax revenues.

While federal action would be required to allow Maryland to collect all $164 million, in a June 2011 report Neil Bergsman highlighted two things Maryland can do to increase the tax collection rate for online purchases:

• Change the law to require online retailers with Maryland affiliates to collect state sales tax. This should apply whether the affiliate is an individual or a subsidiary company.
• Add a line to its state income tax form to help consumers remit their use tax once a year, as the vast majority of states have done

In the upcoming legislative session, Governor O’Malley and the General Assembly will have to figure out how to plug a roughly $1 billion shortfall in the FY 2012 budget. Given the significant cuts made to services over the past several budgets, and the loss of federal stimulus dollars, MBTPI encourages a balanced approach to closing the budget gap that includes revenue enhancements such as collecting online sales taxes.