“There’s pretty much a consensus that the economy is starting to slow, so it’s not the best time to put another tax on consumers,” said Tom Saquella, president of the Maryland Retailers Association. “The holiday season was difficult and we think going into the new year that will continue, and the increase doesn’t help.”
Stores selling big items like furniture or jewelry already operate at a disadvantage to Delaware, which has no sales tax — a disadvantage that will only increase after today, said Ray Kenney, owner of Pasadena Furniture in Pasadena.
“It’s going to hurt,” said Kenney. “Because where do people draw the line? Five percent? Six percent? The home furnishings people I know in Delaware are salivating.”
Andrew Jodlbauer, owner of Jodlbauer’s Furniture in Elkton, just across the state line from Delaware, knows the competition well. He testified at the special session against the increase, and told lawmakers businesses in Delaware sometimes compete with him by not charging the current tax for delivering into Maryland.
“They’re not [charging the tax] and no one’s enforcing it,” he said. “They pitch it to the customer point-blank that they’re not going to charge them sales tax, and you can’t combat that.”
Jodlbauer said he can’t lower his prices too much in a business that has a high overhead and already slim profit margins, and wasn’t sure exactly how much the new sales tax might cut into his business.
“We’re in uncharted waters,” he said. “I told my crew last week, I don’t know what will happen, and there’s nothing I can do to combat it.”
Saquella said business across the state might feel the pinch but that jewelry stores and other retailers of expensive items would be the hardest hit.
“They’re the ones that are going to feel it the longest,” he said. “It’s almost psychological that people [say] ‘my sales tax is going up, let me try shopping across the state line.’ I think for your big-ticket guys it’s going to be a permanent thing.”
acahall@baltimoreexaminer.com
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O'Malley is a highly defective leader. We are in trouble.
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