The case for the lost real estate business

This is the next case I want to briefly talk about and hopefully will have some insight shared by other by posting this here.

A local real estate business owner told me that his business had been doing well. He had a niche in that he could reach people from out of state and help them buy second homes in Maryland. He basically created a new niche and nailed it. Our state legislators again saw an opportunity to once again skim off of a Maryland small business and increased the amount of taxes owed for out of state buyers verses in state buyers. Seems like an innocent thing to do. They are after all buying "second" homes and they are from out of state so who will that hurt? Right?

Unfortunately this small business owner tells me his niche business has nearly dried up. He has had to change  his business model to survive by becoming yet another common real estate company. The niche he built was taken away by way of extra taxation. Tough for him in this harsh economic climate.

What happened? He tells me that all of his potential customers were actually indeed aware of the difference in taxes between Maryland and Delaware and that they are nearly all choosing to buy second homes in Delaware now.

So instead of the state receiving a steady stream of tax revenue from an entrepreneur who made something new and unique happen, the state gets virtually nothing from that revenue stream now. We have once again taxed ourselves out of getting any taxes at all!

If you are a business owner that has a story to tell about doing business in Maryland - good or bad - please share it. I would love to post your story and add it to the what I hope will be an instructional list for our state representatives. - joro