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Senate votes for snack tax

March 18, 2004|by LAURA ERNDE

laurae@herald-mail.com

Over the objection of Republicans, including Gov. Robert L. Ehrlich, the Maryland Senate on Wednesday voted to begin taxing salty snacks such as potato chips, pretzels and nuts for the first time in seven years.

The Senate voted to revive the 5 percent sales tax on snacks, arguing it was needed to raise more money because Ehrlich underestimated expenses in his $23.6 billion spending plan.

Ehrlich's office said the governor opposes the sales tax increase and will work to try to remove it from the spending plan, which has not yet received final approval from the legislature.

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Snacks sold at grocery stores and in vending machines were included in the sales tax from 1992 to 1997, when it was repealed as an incentive to entice Frito-Lay Inc. to expand in Harford County.

Sen. Nancy Jacobs, R-Harford/Cecil, was among the loudest to complain that the Budget and Taxation Committee revived the tax without a public hearing or public notice.

"Since there wasn't a hearing, we were taken by surprise on this," she said. "It's gonna cost Harford County and the state of Maryland jobs and economic development."

Jacobs said Frito-Lay has invested $111 million in its plant since 1991. The plant employs 386 people full time with an average salary of $38,000 a year.

Opponents of the tax argued that snack food manufacturers would have to absorb the costs.

The Grocery Manufacturers of America said the tax disproportionately affects low-income families who can least afford to pay more for their groceries.

If approved, it would make Maryland the only state in the country to single out snack foods for the sales tax. Some states, including West Virginia, tax all food.

"It's not going to kill us. Frito-Lay won't pay this. The kids will. Maybe they'll be less obese," said Sen. Delores G. Kelley, D-Baltimore.

Sen. Andrew P. Harris, R-Baltimore/Harford, said nuts should be removed from the tax because they are healthful compared to the other snacks such as potato chips and cheese puffs.

Sen. Patrick J. Hogan, D-Montgomery, said the tax is not expected to affect sales of snack foods because sales did not increase when the tax was repealed.

The Senate voted 26-20 to approve the snack tax.

Sen. Donald F. Munson, R-Washington, said he voted against it mainly because it would hurt vending machine companies.

"My general philosophy in life is I never saw a tax that I liked or a job that I didn't," he said.

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