Excise task force votes to base rate on square footage

September 13, 2007|By JOSHUA BOWMAN

WASHINGTON COUNTY - Washington County's Excise Tax Task Force voted Wednesday to change the county's residential excise tax from a flat fee to a rate based on the square footage of a new home.

The recommendation, which likely will be drafted into a final report and sent to the Washington County Commissioners later this month, would set the rate at $2 per square foot for new residential construction.

The current tax is a flat fee of $13,000 for single-family houses and $15,500 for multi-family houses.

Task force Chairman John Schnebly said the change is needed to eliminate loopholes in the tax.

"We need to make this tax more collectible," Schnebly said.

The task force has leaned toward changing the tax structure from a flat rate to a fee-per-square-foot since the group began meeting last summer.

Several task force members, along with county planning department officials, have argued that the current flat tax fee is ineffective and creates gamesmanship among builders who look for ways to avoid paying the tax.


The current tax contains exemptions for elderly housing, additions and homes smaller than 1,500 square feet.

Daniel Divito, director of the county's permits department, said builders have used those exemptions to their advantage.

"We've seen a surge in permit applications for huge additions and 1,499-square-foot homes," Divito said.

The task force's recommendations will include eliminating those exemptions from the excise tax ordinance.

A rate based on square footage would also be more progressive because it would increase with the size of the house, task force members have said.

"Right now you've got people building 4,000-square-foot homes paying the same tax amount as people building 2,000-square-foot homes. With a rate based on square footage, those larger homes will pay more," said Del. LeRoy Myers, R-Allegany/Washington.

The task force, which was created by the Maryland General Assembly to recommend changes to the current excise tax, has to submit a final report to the Washington County Commissioners by Sept. 30.

The task force's recommendations would have to be approved by the county commissioners and the General Assembly to take effect.

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