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Income tax hike takes effect

January 28, 2002

Income tax hike takes effect



By SCOTT BUTKI / scottb@herald-mail.com


Washington County taxpayers will pay a higher income tax this year as a result of actions taken by the Washington County Board of Commissioners in the spring of 2000.

To balance the fiscal 2001 budget, the commissioners approved increases in the property and income tax rates.

The fiscal year begins July 1.

The property tax rate hike took effect July 1, 2000. The income tax rate increase took effect in January 2001 and first affected taxpayers this year, county Budget and Finance Director Debra Bastian said.

The vote was to increase the income tax rate to .028 percent of taxable income, which the county said would cost the average taxpayer about $73 more a year.

In 2000, the county's income tax rate was .0251 percent, and the Maryland General Assembly had set the county's rate for 2001 at .0255 percent, Bastian said.

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

In 2000, the Maryland General Assembly 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 was changed.

The state, at that time, set the rate for Washington County at .0251 of taxable income. That rate was chosen so it would generate the same revenue for the county as the piggyback tax would have.

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