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Excise tax panel holds first meeting

July 18, 2007|By JOSHUA BOWMAN

A task force recommending a new Washington County excise-tax structure held its first meeting Wednesday.

The task force set a meeting schedule and discussed the scope of its work, which will include recommending changes to the excise-tax rates and structure to the Washington County Commissioners by Sept. 30.

"It's a daunting task, especially given the time frame, but we'll do what we were asked to do," said former county commissioner John Schnebly, the chairman of the task force.

The current excise tax applies to new construction, and pays for schools, roads, libraries and other county projects.

Until recently, the fee for subdivisions of 25 units or fewer was $13,000 for a single-family home and $15,500 for multifamily homes. The fees doubled for subdivisions of more than 25 units.

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But a bill passed by the Maryland General Assembly this year removed the county's excise-tax cap on new residential construction from July 1, 2007, to June 30, 2008.

The commissioners may change the tax at any time during the next year, but likely will wait for the task force's report before changing it, county officials have said.

Schnebly said one of the task force's first goals will be to eliminate "loopholes and safe havens" from the current excise tax. The excise-tax ordinance provides exemptions or credits for certain kinds of construction, including additions, farm construction, and elderly and work-force housing. Schnebly and others said some of those exemptions are being abused.

"We have people asking for multiple exemptions to get around these taxes," said Michael Thompson, director of the county's planning department, who briefed the task force during Wednesday's meeting.

For instance, Thompson said people often build additions on their homes that serve as apartments for older relatives, but are not charged an excise tax because of the exemption for additions.

"We have a lot of in-law apartments like this in the county," Thompson said.

Thompson said elderly housing complexes also are problematic. Developers apply for elderly housing exemptions for complexes that are not fully devoted to elderly housing or lose their age restrictions over time, Thompson said.

The task force discussed alternatives to excise taxes Wednesday, including impact fees and tax districts, but will focus on amending the current excise-tax structure, Schnebly said.

"This discussion has shown me that there are structural problems with the excise-tax ordinance that we need to address," Schnebly said.

The task force's next meeting is July 25 at 4:30 p.m. in the Washington County Administration Annex building at 80 W. Baltimore St.

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