Blog
The Wake-Up Call Maryland Can’t Ignore
Aug 19, 2025
32nd in business rankings. 9th highest corporate tax rate. Losing nearly 19,000 residents annually to other states.
These aren’t just numbers — they’re warning signs. While you’ve been focused on running your business, Maryland has been quietly slipping in the competitiveness race. The question isn’t whether this affects you — it’s how much it’s already impacting your operations.
But here’s what spreadsheets can’t capture: the manufacturing company that chose North Carolina over Maryland for their expansion. The tech startup that relocated to Virginia for better tax treatment. The family-owned business wrestling with complex regulations that’s considering moving operations. The data tells us where we stand; the stories tell us why it matters.
Maryland’s competitiveness challenges aren’t abstract — they’re affecting real decisions every day. Business leaders weigh tax rates, regulatory complexity, talent availability and cost of living when deciding where to locate, expand, or hire. The data tells part of the story, but the trends are clear: Maryland is losing ground.
Here’s a preview of the early warning signs that businesses and policymakers alike need to watch closely.
Early Warning Signs Worth Watching
| Metric | MD ('24-'25) | Comparisons | Key Insight |
| Overall CNBC Ranking (2025) | 32nd | VA #4, PA #17, DE #29 | Maryland lags regional competitors in overall business climate. |
| Cost of Doing Business (2025) | 46th | NY #45, CA #40, VA #31, PA #25 | Higher costs limit expansion and investment. |
| Business Friendliness (2025) | 37th | TX #2, FL #3, VA #7, WV #15 | Maryland trails top states in regulatory and operational environment. |
| Cost of Living (2025) | 43rd | VA #21, PA #12, DE #9, WV #1 | Makes it harder to attract and retain talent. |
| Net Domestic Migration (Dec. 2024) | -18,900 / 45th | VA +5,284 (20th), DE +8,155 (14th), PA -11,500 (43rd) | Maryland loses residents to other states, shrinking the talent pool. |
| Corporate Tax Rate (2025) | 8.25% / 9th | PA 7.99% → 4.99% by 2031 (13th), VA 6% (26th), DE 8.7% (7th) | Maryland’s tax system is high and poorly structured, increasing costs and discouraging expansion. |
| New Business Applications (2024) | 152,999 (-6% YoY) | DE 81,514, VA 178,095 | Applications are declining; fewer entrepreneurs starting businesses. |
| Employer Business Application Percent (2024) | 14% | DE 19%, VA 17% | Low proportion of businesses intend to hire employees. |
| Business Survival Rate (2024) | 12% | DE 18%, VA 10% | Survival is dropping, meaning fewer businesses scale or contribute to local jobs. |
| Jobs per New Business (2024) | 0.76 (from 2.11 in 2023); 35th | DE 1.52 (14th), VA 1.29 (21st) | Job creation per business is declining sharply, weakening growth. |
Takeaway: Maryland is losing ground across every key measure: cost, talent, taxes and business formation. Competitors are moving ahead, meaning fewer expansions, fewer jobs and fewer opportunities for families and communities.
The Cost Squeeze: Maryland ranks 32nd overall in CNBC’s 2025 Top States for Business — trailing neighbors like Virginia (#4), Pennsylvania (#17) and Delaware (#29). Our 46th ranking in cost of doing business puts us behind even New York (#45) and California (#40). 37th in business friendliness leaves us far behind top-ranked states like Texas (#2) and Florida (#3), while 43rd in cost of living makes it harder to attract and retain talent.
The Talent Drain: Maryland ranks 45th in net domestic migration, losing nearly 19,000 residents to other states in just one year. Neighboring states are faring much better: Virginia gained +5,284, Delaware +8,155 and Pennsylvania lost fewer (–11,500). While international migration (+53,100) offsets some losses, the long-term trend is concerning: from 2020-2024, Maryland lost 120,435 residents to other states. These departures shrink the talent pool for businesses, limit local consumer demand and put pressure on taxpayers to support essential services with fewer contributors.
The Tax Trap: Maryland’s 8.25% corporate tax rate ranks 9th highest nationally, while our corporate tax system ranks 37th in competitiveness, and our tax climate ranks 46th overall. Neighboring states are pulling ahead: Pennsylvania is phasing down its corporate rate from 9.99% to 4.99% by 2031, Virginia sits at 6% and Delaware offsets higher rates with structural advantages. Meanwhile, Maryland remains stagnant — meaning higher costs, more complexity and fewer business expansions choosing our state
The Business Creation Gap: Maryland saw 152,999 new business applications in 2024, down 6% from 2023, with only 14% intended to be employer businesses. Business survival dropped from 19% to 12%, and jobs per new business plunged from 2.11 to 0.76, ranking 35th nationally. Neighboring states like Virginia and Delaware outperform Maryland in survival, net creation, and jobs per business — underscoring that businesses here struggle to start, survive and scale.
Behind Every Ranking Is a Real Decision
These rankings aren’t abstract statistics. They represent real choices: a company weighing Maryland or Virginia for their next facility, an entrepreneur deciding where to launch, a CEO choosing between expansion here or elsewhere.
While the data is critical, the most persuasive force in Annapolis is your voice. During the 2025 session, business advocacy changed outcomes. Because of this advocacy, Maryland Chamber of Commerce members helped defeat 68 harmful bills, stop expansive B2B service taxes and reshape costly mandates that would have slowed growth.
That's why we need more stories, not just more statistics.
What Keeps You Up at Night
We want to hear your Maryland business experience:
- The 2 a.m. concerns rankings don’t capture
- The creative solutions you’ve developed to stay competitive
- How policy uncertainty affects your planning and investments
- What you’re doing to support your workforce and community
- What you wish policymakers understood about doing business in Maryland
Your insights fuel our advocacy. They help us push for policies that support growth instead of stifling it.
Join the Conversation — And Shape Maryland’s Future
Be part of the solution. If you’re not yet a Chamber member, it’s time to get off the sidelines. If you are, engage, share your story, and bring your team into the conversation. Maryland’s future depends on businesses having a seat at the table.
Get the full competitiveness briefing. Schedule a session this fall to hear the presentation and learn how we can work together to improve the state’s competitiveness.
Share your story. Your experience could shift a vote or reframe the debate in Annapolis.
Upcoming Events
Don’t miss these opportunities for Maryland businesses to connect with decision-makers, engage in critical conversations and hear directly from business leaders and policymakers on the issues shaping our communities and economy.
- Chamber Cup — September 8: Play one of Maryland’s premier courses, connect with top business leaders and support advocacy efforts that strengthen our business climate.
- Maryland Chamber PAC Reception — October 8: Join an exclusive gathering in Annapolis with influential business and legislative leaders. Build relationships, exchange insights and help put pro-business policies at the forefront.
- Policy Forum 2025 — November 20: Be in the room where solution-focused conversations happen. Hear directly from policymakers and experts on issues like energy, AI, tech and business taxes — the big debates shaping Maryland’s competitiveness in 2026.
The path Maryland takes next will be shaped by those who speak up. Share your story, engage in the conversation and help build a state where businesses and their communities can thrive.
