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Delegation backs tip-jar sticker request, but not liquor-license change

January 25, 2012|By ANDREW SCHOTZ | andrews@herald-mail.com

Washington County’s state legislators agreed on Wednesday to sponsor a bill to help the bottom line for groups who sell tip-jar games, despite opposition from county government officials.

The Washington County Restaurant & Beverage Association asked that the $2 fee for stickers for each tip jar be subtracted from gross profits, arguing that it otherwise would be double taxation, since operators are also taxed on those gross profits.

The Washington County Board of Commissioners and the county administrator opposed the change because it means cutting into tip-jar proceeds distributed to local nonprofit organizations

Still, the county legislative delegation voted unanimously to support the association’s request and submit it as a bill during this General Assembly session.

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The delegation Wednesday also turned down another request by the association — to tighten the limits on how many liquor licenses may be issued in Washington County based on population.

Currently, the county allows one liquor license per 1,000 people in an election district, although the liquor board may issue additional licenses if it decides it’s warranted.

The Restaurant & Beverage Association asked that the new limit be one license per 3,500 people, arguing that the lesser density would protect the community from having too many liquor-selling establishments.

The new limit would not have applied to restaurants.

Louis L. Thomas, the association’s president, said during a delegation meeting in Annapolis on Wednesday that the change would put Washington County more in line with Frederick County, which allows one license per 4,000 people, and Carroll County, where the ratio is one license per 5,000 people.

Del. Michael J. Hough, R-Frederick/Washington, spoke against the proposal, saying it would stifle a free market.

Sen. Christopher B. Shank, R-Washington, also said he opposed the change.
Under the population formula, Maugansville is the only place in the county that could have a new license, and the proposal would prevent that, he said.

On the tip-jar gaming sticker change, Thomas wrote in a July letter that the alcohol beverage industry “has been hit hard by the struggling economy, the smoking ban which took effect several years ago, rising gasoline and food prices, the recent sales tax increase, and now a gaming increase.”

Last year, Washington County increased the cost of each tip-jar sticker from $1.25 to $2.

County Administrator Gregory B. Murray said after Wednesday’s delegation meeting that the increase was meant to cover the county’s administrative costs.

If operators that sell tip jars are allowed to subtract sticker costs from gross profits, the county still will collect the fees, but nonprofit organizations, which benefit from tip-jar proceeds, will get less money.

Under the new accounting, tip-jar proceeds for nonprofit groups would have been about $25,000 less in 2010 and about $20,000 less in 2011, Murray said.

In his letter to the delegation, Thomas acknowledged the expected loss in money for charities.

“While this is unfortunate, we need to keep sight of the fact that without these small businesses participating in the program, there would be zero funds available to charities,” the letter said.

The delegation unanimously approved filing the change in tip-jar sticker accounting as a bill.

Del. Neil C. Parrott, R-Washington, suggested that the change could be an incentive for establishments to sell more tip jars, adding to the proceeds that reach nonprofit groups.

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