Maryland tech and consulting businesses would bear the brunt of a late-filed proposal to subject some business services to a 2.5% sales tax.

Nearly one dozen services would pay $944 million in sales taxes in fiscal 2026, according to an analysis released Tuesday by the Department of Legislative Services. In that first year, technology and consulting services would pay nearly $625 million.

Kelly Schulz, chief executive officer of the Maryland Tech Council, said the tax will force businesses in her industry to close or leave the state at a time when growing the private sector has become a focus of Gov. Wes Moore (D).

“Governor Moore has repeatedly spoken about making life science and IT strategic industry sectors for investment and the need to have a strategy to grow these sectors,” Schulz said in written testimony that will be delivered at a House hearing Wednesday. “We agree with the governor’s sentiment. However, the additional 2.5% B2B sales tax is in direct contrast to that goal and risks to undermine efforts to support these industries.”

Moore this year made diversifying the state economy and easing the state’s dependence on federal employment a top priority. He has not said whether he will support the service sales tax, which was introduced only last week as lawmakers scramble to close a $3 billion budget gap.

“We’re going through it and looking at it now, but I had three principles that I laid out when we first introduced our budget,” Moore told reporters last week. “And that was we had to be able to give middle class families a bit of relief, and we had to be able to make sure that we weren’t going to build the economy on their backs. The second was that we had to make it easier for businesses to be able to come here and grow and scale in Maryland. The third was that we have to invest in our people whatever proposals come out of this.

“If it meets those criteria, that’s a proposal that I will work with and I’m good with, but if it does not, that’s not a proposal that I am good with,” he said.

Ferguson warns of ‘Maryland recession’ as report says state has greatest risk from federal cuts

Schulz wrote that the General Assembly should “view its actions through a lens of economic competitiveness.”

The legislative analysis characterizes the effect on small business as “potentially meaningful.”

Schulz, in her testimony, is more blunt.

“This proposal will put Maryland at a disadvantage in growing, attracting, and retaining businesses, including those in the life sciences and technology sectors. Maryland is already a costly state to conduct business; this proposal would further exacerbate those operating costs,” she said.

Schulz is one of more than 400 businesses signed up to testify against the House version of the bill at a House Ways and Means Committee hearing Wednesday. The businesses, ranging from small companies such as Chick & Ruth’s Delly in Annapolis and Phillips Seafood, to Under Armour and Northrop Grumman, will be limited to 90 seconds of testimony each.

The Senate Budget and Taxation Committee will hold a hearing later on Wednesday afternoon on the identical Senate Bill 1045.

Analysts project that the tax, as currently drafted, could generate more than $1.4 billion by fiscal 2030.

House Majority Leader Del. David Moon (D-Montgomery), lead sponsor of the House bill, said “the starting point for this year’s discussion was a much narrower bill” than the sales tax on all services he unsuccessfully proposed last year.

“Whether every category in here stays, I can’t tell you, because the committee is going to have to take a look at and figure out what they what they want,” said Moon.

Moon said he didn’t draft this year’s bill with a revenue target in mind.

“I think the hope is, and whether it’s this tax proposal or more cuts or additional different revenues than what this one’s proposed, I think the hope is to, obviously, we have to deal with the current $3 billion (deficit), and to try and leave some cushion for additional hits from the federal government,” Moon said. “The Board of Revenue Estimates write-down of $280 million or so was a floor. I think many of us are looking at what’s going on and anticipating significant additional revenue drops to be announced in the coming months.”

On Monday, Moody’s Ratings released a report  that said Maryland was the most vulnerable state in the nation to ongoing federal budget cuts and employee layoffs. Senate President Bill Ferguson (D-Baltimore City) warned of the potential for a “Maryland recession” because of the cuts.

Maryland Chamber of Commerce President and CEO Mary D. Kane said the service tax proposal has united the business community.

“The overwhelming opposition from the business community isn’t about avoiding responsibility — it’s about preventing a policy that will do more harm than good,” Kane said in a statement. “A strong economy is the foundation for sustainable funding, and we remain committed to working on solutions that address the budget deficit without driving businesses, jobs, and investment out of Maryland.”

The proposal appears to have some support in both the House and Senate. Ferguson, speaking to reporters Tuesday, said the bill deserves serious consider

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ation.

Both Ferguson and Moon said the legislature will likely reach a compromise on a budget with more than $2 billion in cuts.

“This is one of the tougher parts of this job is when you have a deficit like this and trying to figure out how to get out of it,” Moon said. “We said at the beginning of this session, not everyone was going to be happy. Someone was going to have to take a haircut on the policy decisions coming out of here.”

He warned that failing to find revenues would result in important services being cut.

“If they’re ready to line up for a billion in additional cuts — we’re talking about DDA [Development Disabilities Administration], health care, things like that, things that people currently don’t seem to have an appetite for cutting — certainly they’re welcome to put things back in that posture,” Moon said. “Alternatively, we had all sorts of other tax proposals, itemized deductions, combined reporting, I-gaming. Those are all in the same committee.

“That same committee has heard all of these proposals,” he said. “Every single one of them is going to bring out different people who really don’t want it. So, I just think that’s where we are.”

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by Bryan P. Sears, Maryland Matters
March 11, 2025

Maryland Matters is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Maryland Matters maintains editorial independence. Contact Editor Steve Crane for questions: [email protected].

Qlarant Foundation announced that they have selected Lamont Thompson, DPT as the 2025 Board Chair, replacing Amanda Neal who has joined Qlarant as Qlarant Foundation Executive Director. Dr. Thompson was most recently Vice Chair of the Foundation and has been on the Board since January 1, 2019.

“As I become Chair, I hope to facilitate a continued focus toward Qlarant’s mission of individuals and communities in each of the areas we serve,” said Thompson.

Dr. Thompson has been a Physical Therapist with Amedisys Home Health Care since January 2023 and is certified as an Orthopedic Manual Therapist. He is a member of the American Physical Therapy Association participating in home health section of the APTA, as well. He has treated patients in home health, outpatient, and acute-care inpatient rehabilitation environments under an extensive variety of diagnoses. From 2008 to 2023 he worked as a Physical Therapist for University of Maryland Shore Regional Medical Health. From 2007 to 2008 he worked at Chesapeake Physical and Aquatic Therapy in Laurel, Maryland as a Physical Therapist.

From October 2007 to March 2008, Dr. Thompson was with Chesapeake Physical and Aquatic Therapy in Laurel, Maryland as a Physical Therapist. He is a Licensed Physical Therapist by the Maryland Board of Physical Therapy Examiners, a Certified Orthopedic Manual Therapist by Maitland Australian Physiotherapy Seminars, and a Certified Sportsmetrics™ Trainer focusing on ACL injury prevention.

Dr. Thompson joined Qlarant Foundation after meeting with then Chair, Dr. Molly Burgoyne-Brian and retired Program Coordinator Glennda Moragne El. “They extended an invitation for me to be a part of this tremendous team,” added Thompson. “I was attracted to the organization by the amazing work that the Board supports throughout the region. I see so many opportunities for improvement and maintenance of healthy lifestyles in our region, especially with regard to exercise. I see the work that is already being done, and it’s exciting to be a part of the transformation.”

In 2025, Qlarant Foundation began accepting grants from Texas, Florida, and Georgia. “I’m hoping the expansion will drive growth within our organization celebrate and walk alongside all areas of the country that we serve,” he continued. “We want to let each of them know we see them and want to support their continued drive to have a long-standing impact in the community.”

“We are driven to identify organizations that are focused on improving the quality of life of their surrounding communities. We are passionate about supporting and propping up those members of our society who are looking to create an overall movement toward equitable access to healthy living.”

Dr. Thompson earned a Doctor of Physical Therapy degree in 2007 from the University of Maryland Eastern Shore in Princess Anne, Maryland. He also holds a Bachelor of Science in Health and Exercise Science from Wake Forest University in Winston-Salem, North Carolina.

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About Qlarant

Qlarant is a not-for-profit, nationally respected leader in fighting fraud, waste, and abuse, improving program quality, and optimizing performance. The company uses subject matter experts and innovative data science and technology to help organizations see risks, solve problems, and seize opportunities. Qlarant provides customized solutions for state, federal and commercial industries across the nation.

The Qlarant Foundation— the mission arm of the organization—has provided over $7 million in grants to charities throughout Maryland and the District of Columbia. Qlarant has a 50-year record of accomplishment improving the performance of some of the Nation’s most important programs. Headquartered in Easton, MD, Qlarant has offices throughout the country and employs over 550 people. Qlarant is a five-time winner of the Best Places to Work award. For more information, visit www.qlarant.com or contact [email protected]

Easton Utilities named Kelly Simonsen, as the Director of Corporate Communications. This new position will be responsible for developing and implementing the overall communications strategy including  internal and external communications, media relations, branding, advertising, events, and charitable giving.

“Kelly has been a valuable part of the leadership team offering her expertise in how best to share the important information and educational messaging with our employees, customers, and community,” said John J. Horner, President and CEO of Easton Utilities.

In her new role, Simonsen will oversee all communications involving the organization including the development and implementation of a multi-channel communications strategy for the wide range of services provided by Easton Utilities and Easton Velocity.  Working with the Marketing and Communications team, Simonsen will continue to promote and enhance the image of Easton Utilities and Easton Velocity to uphold both customer and employee satisfaction.

“We try to be proactive with our approach to authentic communication using a variety of tools and platforms to ensure all of our customers stay informed and aware ,” said Simonsen. 

Simonsen began her career at Easton Utilities in 2016 as the Marketing and Communications Manager. Prior to joining Easton Utilities, she spent the majority of her career in marketing working for several niche corporations to include a national hotel chain, an international medical device company and a national industrial service provider.  

Simonsen holds a bs in communication from Towson University and is currently working on her master’s in integrated marketing communications at Georgetown University. She is a Graduate of Shore Leadership (2014) and is currently on the board of MD/DC Utilities Association, Eastern Shore Land Conservancy, and SOS Sink or Swim. Simonsen has lived in Easton since 2013 with her husband and two daughters.    

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Easton Utilities is a community-owned, not-for-profit utility and telecommunications company operating the Electric, Natural Gas, Water, Wastewater, Cable Television, and Internet services for the Town of Easton and portions of the surrounding area. Visit eastonutilities.com for more information.

Qlarant Inc., a health care data science and technology firm headquartered in Easton Md., has selected Anthony “Tony” P. Kern as its new Board Chair. Mr. Kern joined Qlarant as a Board Member in January of 2019 and became Vice Chair in May of 2021. He also has served Qlarant as the Chair of the finance committee and served on the governance committee.

Mr. Kern begins his tenure following the retirement of John H. Murray, Esq. who was Board Chair for the last three years.  “I am honored to be named the next Chair of Qlarant,” said Kern. “I want to thank John Murray for his good advice and steady hand over these last several years. I look forward to continuing work to safeguard and improve the country’s health care system and expand Qlarant’s offerings across a broad range of clients and industries.”

Tony Kern retired as Senior Managing Partner with the global accounting and consulting firm Deloitte & Touche. His experience encompasses a broad range of industries with a concentration in technology, media, telecommunications, energy, and financial services. Throughout his career, Mr. Kern has provided counsel on a wide range of topics including management advice, business strategy, planning, business development, innovation and disruption strategies, corporate finance and re-structuring, and customer experience and retention. He also provides insight into operational optimization, corporate governance and ethics, board of directors’ guidance, and merger and acquisition planning and integration.

Tony Kern also served as U.S. Deputy Managing Partner of the firm’s Technology, Media, and Telecoms practice. He was the Global Managing Partner of Innovation and the Managing Partner of Deloitte’s Fast 50 program (recognizing the fastest growing companies in America). Prior to joining Deloitte & Touche, Kern was an Industry Global Managing Partner at PricewaterhouseCoopers, and before that, a Regional Managing Partner at Arthur Andersen.

“I’ve had the wonderful opportunity to manage consulting practices from $20 million to $1.45 billion in revenue,” Kern continued. “I hope that experience will continue to be useful as Qlarant grows. At the end of the day, I maintain a consultative approach to growing companies which can mean a lot of things—but primarily it means LISTEN MORE. It’s critically important to listen to our people, our clients, and the marketplace in order to meet the goals we have set for ourselves over the next few years.”

Kern has lectured on various topics at leading business schools and taught advanced industry seminars on the future of consumer interactions with new technology, customer experience, technology media and telecommunications. He has made legacy predictions and forecasts regarding wireless networks, internet-speed and security, as well as the impact of social media on society, news, and the entertainment industry. Tony is recognized as an expert by U.S. Federal Courts in matters of business management, transactions, and corporate finance. He’s been a frequent speaker at industry gatherings and has been interviewed by The Wall Street Journal, National Public Radio, CNBC, MSNBC, The

New York Times, Dow Jones News-Wire, Fortune Magazine, and other media outlets.

Kern has mentored and counseled entrepreneurs, senior executives, and managers in a wide range of mature businesses and start-ups. He has successfully started and sold several companies in the communications, technology, and energy industries. He serves on several boards, including Qlarant, Inc., the Easton Economic Development Corporation, as President of the Board at the Eastern Shore Entrepreneurship Center, Vice President of the Board for Waterfowl Festival, Inc., and Chair of the Talbot County Ethics Commission.

“I see Qlarant as a highly intelligent, dynamic and agile company made possible by the people who make up our team,” added Kern. “It’s this kind of thinking that will keep us growing and keep us innovative. All these attributes are necessary to remain competitive and to provide the types of leading-edge products and services we have become known for in the marketplace.”

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About Qlarant

Qlarant is a not-for-profit, nationally respected leader in fighting fraud, waste, and abuse, improving program quality, and optimizing performance. The company uses subject matter experts and innovative data science and technology to help organizations see risks, solve problems, and seize opportunities. Qlarant provides customized solutions for state, federal and commercial industries across the nation.

The Qlarant Foundation— the mission arm of the organization—has provided over $7 million in grants to charities throughout Maryland and the District of Columbia. Qlarant has a 50-year record of accomplishment improving the performance of some of the Nation’s most important programs. Headquartered in Easton, MD, Qlarant has offices throughout the country and employs over 550 people. Qlarant is a five-time winner of the Best Places to Work award. For more information, visit www.qlarant.com or contact [email protected]