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Local bills considered in state Senate

April 07, 2006|by TAMELA BAKER

ANNAPOLIS - Two local business tax bills and a property tax bill were under consideration Thursday by the full Senate after being approved by the Senate Budget and Taxation Committee.

One is a measure to revise the county's excise tax on new development so that county officials can waive the tax for certain new businesses.

The request came from the Washington County Commissioners, who wanted authority to offer exemptions as a tool to recruit new business. But since the initial request, the bill has produced some differences of opinion between lawmakers and county commissioners.

Del. LeRoy E. Myers, R-Washington/Allegany, feared the exemption for new businesses would penalize established businesses that wanted to expand but would be subject to the tax. The delegation agreed to sponsor the legislation for the commissioners on the condition that the tax be waived for existing businesses unless their expansion more than doubles the size of the existing facility.

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After the bill was approved in the House, county officials complained the condition would open a loophole to allow existing businesses to expand in phases, eventually doubling the size of their facilities without paying the tax. So the delegation amended the bill to limit the exemption to 50,000 square feet and stipulate that a business getting a waiver would not be eligible again for five years.

But again, county officials wrote to the chairman of the Senate committee asking the bill be amended to exclude existing retail businesses; delegation members opposed amending the measure further, arguing that exempting retail business would harm small shops wishing to expand, according to delegation Chairman Christopher B. Shank.

Sen. Donald F. Munson, R-Washington, said Thursday that the county's letter had come too late to get the bill amended before the legislative session ends at midnight Monday.

Another bill that started as a measure to force the county to lower its property tax cap was completely altered after the commissioners chose last month to lower the cap themselves. Local lawmakers amended the bill to simply permit the county government to issue property tax credits for fiscal year 2007, which begins July 1. The lower tax cap becomes effective in fiscal 2008.

Legislation that would expand existing tax credits for businesses that create new jobs to include contract workers employed for a year or more won unanimous support in the House of Delegates.

To qualify for the credits, new or expanding businesses must create at least 25 new full-time positions. This bill would allow businesses in Washington County to count full-time contract workers toward that number.

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