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State tax rules change

April 10, 2000|By SCOTT BUTKI

Taxes haven't been raised in Washington County, but changes to the state's income tax rules may make it look that way, Washington County spokesman Norman Bassett said Friday.

The Maryland Association of Counties expects some state residents will be confused about the changes as they fill out their 1999 Maryland tax forms, Bassett said.

He said the County Commissioners have made no changes to the county tax and that any confusion stems from actions taken by the state.

The County Commissioners today are to discuss a possible tax hike to balance the annual budget.

Maryland has had a piggyback tax for years. In Washington County, the piggyback tax, the amount of income tax revenue that goes to the county, has been figured at 50 percent of the state tax liability, Bassett said.

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The Maryland General Assembly last year adopted a phased-in tax cut. To prevent the counties in the state from taking a tax cut as a result of the state change, the manner in which the county's share of the income tax is calculated has been changed, he said.

The state essentially separated the state tax and the piggyback tax, Bassett said.

The state reduced its top tax rate from 5 percent to 4.75 percent, among other things, Bassett said.

"The Board of County Commissioners made no changes in the tax rate for 1999. However it appears as though the county rate has increased, because the amount you pay the state is lower than it has been," Bassett said.

For 1999 taxes due this month, the amount that will go to Washington County is figured at .0252 of taxable income, he said.

But the rate for taxes to be paid for the year 2000 currently is .0251, Washington County Budget and Finance Director Debra Bastian said. The County Commissioners may vote to increase that rate during a meeting today.

The Maryland General Assembly's intent in using the .0252 rate was to generate the same revenue for the county as the piggyback tax would have, he said.

"Were your taxes raised? Not really, according to the Maryland Association of Counties," Bassett said.

"It's the same rate you had last year," he said.

He said the Maryland Association of Counties fought the flat tax change because of predicted confusion and apparently has been proven right.

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