Washington Co. Commissioners to recommend excise tax rates

October 31, 2007|By JOSHUA BOWMAN

· The commissioners are to recommend a $3-per-square-foot tax rate for residential construction.

· For commercial construction, the commissioners suggested two categories: retail and nonretail. Retail construction would pay $3 per square foot; nonretail would pay $1 per square foot.

WASHINGTON COUNTY - The Washington County Commissioners on Tuesday agreed to recommend excise tax rates for residential and commercial development.

The commissioners' recommended rates are higher than those suggested in a report by the Excise Tax Task Force, though the county's delegation to the Maryland General Assembly will have the final word on how the tax rate and structure are set.

The commissioners reached a consensus Tuesday to recommend a $3-per-square-foot tax rate for residential construction.

For commercial construction, the commissioners suggested two categories: retail and nonretail. Retail construction would pay $3 per square foot; nonretail would pay $1 per square foot.

The commissioners will discuss their recommendations Nov. 13 with the Washington County Delegation, along with the recommendations from the Excise Tax Task Force. The General Assembly would have to pass into law any changes to the tax.

The commissioners began their review two weeks ago of a report released by the county's Excise Tax Task Force, which was created to recommend changes to the tax.

The excise tax is charged on new construction and largely pays for school capacity projects.

Last week, the commissioners reached a consensus on most of the task force's 14 recommendations, which would change the tax from a flat rate to a rate based on square footage and would eliminate many exemptions in the tax ordinance.

The task force's report recommended a residential tax rate of $2 per square foot, which several commissioners argued would exacerbate the county's current excise tax shortfall.

In fiscal year 2007, the county collected $3.8 million in residential excise taxes - roughly $11.5 million below budget projections.

Several commissioners said during Tuesday's meeting that a residential tax rate of $3 per square foot would generate roughly the same amount of revenue the county now earns from the tax.

Currently, the tax is a flat rate of $13,000 for single-family homes and $15,500 for multifamily homes.

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