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County seeks power to waive excise tax for businesses

March 31, 2006|by TAMELA BAKER

ANNAPOLIS

With less than two weeks left for this year's General Assembly, a last-minute flap over revisions to the county's excise tax on new development could place the bill in jeopardy.

The County Commissioners asked the Washington County Delegation to the Maryland General Assembly to sponsor enabling legislation that spells out their authority to grant exemptions. They believed the excise tax bill passed last year did not give them clear power to waive the tax.

The delegation agreed to sponsor the legislation, but with an amendment by Del. LeRoy E. Myers, R-Washington/Allegany, that would also exempt existing businesses that wanted to expand their facilities up to double their original size.

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Myers argued that established businesses shouldn't be penalized for expanding.

County Administrator Rodney M. Shoop has written the chairman of the Senate Budget and Taxation Committee with "concerns" about Myers' amendment.

The delegation approved the amendment to the bill in February. Myers presented the bill to the House Ways and Means Committee on March 1, and no one spoke in opposition. The House approved the measure last week, sending it to the Senate Budget and Taxation Committee, where it is scheduled for a hearing Monday.

Shoop's letter to committee Chairman Ulysses Currie said "as it is currently written, the bill limits Washington County's ability to collect Excise Tax on expansions of nonresidential construction. The language allows an existing nonresidential building to double in size without being subject to the tax.

"Further, (the bill's) current language allows for a nonresidential building to expand via phased construction without being subject to the tax. Therefore, Washington County can only collect Excise Tax, for nonresidential structures, on new 'greenfield' construction."

Delegation Chairman Christopher B. Shank, R-Washington, said Thursday that the delegation was working with county officials to resolve the differences with some minor amendments. Any potential loophole that could allow "phased construction" that would circumvent the excise tax for existing businesses was "an unintended consequence of the legislation that can be easily addressed by amendment," Shank said.

But the basic protection for established businesses would remain. "I don't believe that there will be any effort to backtrack on that component of the legislation," he said.

The bill must be approved by both the committee and by the full Senate; and if it's amended, the House would have to approve it again.

Myers said he still believes "we need to protect the businesses that have been there for us for many, many years I will not be satisfied until we protect longstanding businesses."

House bill 1407

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