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Washington Co. Commissioners agree to new excise-tax exemptions

August 28, 2012|By ANDREW SCHOTZ | andrews@herald-mail.com
  • Hagerstown-Washington County Economic Development Commission member Ron Bowers asks the Washington County Board of Commissioners Tuesday to eliminate all excise taxes to help stimulate economic growth.
By Joe Crocetta/Staff Photographer

HAGERSTOWN — The Washington County Board of Commissioners briefly toyed with the idea of a broad rollback of the county’s excise tax on Tuesday before sticking to the more limited proposal at hand.

The commissioners unanimously agreed to eliminate the excise tax when a nonresidential property changes from one use to another.

That change, which will last through June 30, 2015, will eliminate the excise tax of $3 per square foot for properties that switch from nonretail to retail.

For the opposite change, from retail to nonretail, the excise tax of $1 per square foot would be waived.

The commissioners also agreed to have the staff recommend how to draw a cutoff line — how far along a project could be before getting an excise-tax rebate.

Some liked an idea mentioned by Del. LeRoy E. Myers Jr., the owner of a construction business. Myers told the commissioners that Frederick County, when it eliminated its excise tax last year, refunded the excise tax on projects for which the developer had paid but hadn’t started construction.

If construction had begun, the county considered, case by case, whether to refund the tax, Myers said.

The Washington County commissioners agreed on the change-of-use exemption, but debated how to impose a cutoff or refund excise taxes.

When Commissioner Ruth Anne Callaham asked about considering proposed projects for the exemption, Commissioner John F. Barr replied, “But is that not subjective?”

In June, the commissioners expressed their support for the change-of-use exemption before approving a fiscal year 2013 budget.

Last month, county officials clarified that the nonresidential exemption would apply both ways — from nonretail to retail, and vice versa.

The first two people who spoke during a public hearing on Tuesday raised points that did not apply to the limited proposal before the commissioners.

One speaker was Jerry Cump, who said he has been trying to convert a Hagerstown building he used as a business office back to a residence.

But the scope of the discussion broadened with the comments of the third speaker, former Washington County Commissioner Ronald L. Bowers.

Bower said the Hagerstown-Washington County Economic Development Commission has recommended eliminating the excise tax entirely to help stimulate economic growth. “Just do away with it,” he said.

Commissioner William B. McKinley agreed, saying this is a good time to consider the idea.

McKinley said the excise tax should be applied on a sliding scale — it should lowered or eliminated when the economy is bad and there’s little development.

But Barr later objected to the idea of frequent changes to the law.
“Every time we turn the spigot on and off, someone gets scalded,” he said.

Barr said he’s frustrated by the excise tax, calling it “government greed.”

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