Maryland Gov. Wes Moore says broad business, sugary drink taxes not on final budget

Maryland Gov. Wes Moore told reporters on Monday that lawmakers have had "productive conversations" over the state's final 2026 budget.

Moore's proposed budget aims to address a nearly $3 billion deficit through spending cuts and tax increases for residents who earn more than $500,000 annually.  

The state needs to adopt a balanced plan by April.  

Broad business, sugary drink taxes not included

The governor said that a broad tax on business-to-business services and a tax on sugary drinks would not be included in the budget.

Maryland lawmakers had considered a tax proposal, which was a 2.5% business-to-business sales tax. However, the bill was faced with opposition, claiming the bill would hurt the state's efforts to attract businesses. The business-to-business tax was projected to raise nearly $1 billion in the first year.

According to the Baltimore Banner, Moore said that he wants Maryland to be "the best place in the country in order for businesses to grow," which is why he rejected the business tax as proposed.  

Lawmakers were also debating whether to impose taxes on certain sugary drinks. For Our Kids Act, or House Bill 1469, would tax distributors for selling sugary drinks, syrups, and powders to retailers starting in July 2026. 

"We have to bring down the cost of what people are seeing inside the grocery stores and supermarkets, and that's why things like the soda tax will not happen in the state of Maryland," Moore said.

Maryland Republican House Minority Leader Jason Buckel said in a statement, "We remain cautious. The governor chose his words very carefully. There is much he did not say... neither Maryland's businesses nor our taxpayers are entirely off the hook quite yet."     

Three budget guidelines

Gov. Moore made it clear that he would sign the budget that abides by three guidelines -- reforming the tax code, making Maryland more economically competitive and business-friendly, and investing in the state's residents.

Under Moore's proposed tax plan, the state's lowest four tax brackets would be combined and taxed at a 4.7% rate, meaning that two-thirds of state wage earners would see a tax cut.

Moore previously stated there would be $750 million in investments made in the state, including $128 million in targeted spending in key industries. He stressed that Maryland needs a strategy to move forward, including investing in life sciences, defense technology, and innovation. This plan would add to the state's prior investments in federal workers, the medical industry, and higher education

"We've had very productive conversations with the General Assembly, with both the House and the Senate, to ensure that we are going to accomplish and hit every one of those benchmarks by the time we get to the close of the session," Moore said. "In order for any bill that makes it to my desk to get a signature, it has to hit those criteria."  

"Attacks on our economy"

Gov. Moore says President Trump's implementing tariffs on steel and aluminum imports, while also targeting Canada and Mexico, is "disastrous" and "an attack on the economy."

"The impacts of the Trump administration are real and we have seen it in just eight weeks, on how this has been a direct attack on the state of Maryland, direct attacks on our economy," Moore said.

The Trump administration last week increased tariffs on all steel and aluminum imports to 25%, which has raised fears about the economy's impact, including in Maryland and at the Port of Baltimore.

And, with 25% tariffs to be imposed on Canada and Mexico starting April 2, Moore said costs on imported goods could skyrocket.

The governor echoed what he said on Sunday's "Face the Nation," that the policies, impacts of the tariffs, and layoffs of thousands of federal workers are unprecedented and damaging.

"The assault that we are seeing right now, the direct assault that we are seeing from the federal government, is unprecedented, but I want the people of our state to know that even in this moment of crisis, this administration is going to meet the moment of crisis with courage and we are going to be OK," Moore said.  

Moore added that his administration is not going to back down from the federal government.

"The thing that we know at this moment is that we are not just going to sit down and be attacked," Moore said. "We are going to make sure that we are going to fight back as a state."