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Bill would let tech businesses spread personal property tax burden over years

March 05, 2013|By KAUSTUV BASU | kaustuv.basu@herald-mail.com

ANNAPOLIS — A bill that would enable Washington County to enter into agreements with technology-related businesses to let them make payments in lieu of personal property taxes was heard Tuesday at a Senate Budget and Taxation Committee hearing.

The agreements would let a technology-related company spread out its personal property tax burden over a number of years.

The bill, which was presented by Sen. Christopher B. Shank, R-Washington, at the Senate Committee also has been filed as a delegation bill in the House of Delegates.

County officials previously have said that PILOTs, or payments in lieu of taxes, give them a tool to attract and keep technology companies in the county.

Shank said at the hearing that the bill, which was requested by the Washington County Commissioners, is an attempt to make the county more competitive with neighboring jurisdictions when it comes to server farms and technology-related businesses.

“We got a couple of these in existence now, so it would assist them in maintaining those operations as well as trying to attract other server farms and technologically heavy businesses,” Shank said.

Terry L. Baker, president of the county commissioners, said in a letter written to Sen. Edward J. Kasemeyer, D-Baltimore/Howard, chairman of the Senate Budget and Taxation Committee, in support of the bill that “the intensive technology investment required to build and operate a server farm results in a large amount of personal property subject to tax.”

The personal property tax bill is “exorbitant initially” when it comes to technology-related personal property, the letter said.
“PILOTS would allow these tax burdens to be spread out over the life of the equipment and would give businesses greater cash flow flexibility while protecting the county’s taxable revenue,” Baker said in the letter.

A fiscal analysis of the bill by the state’s Department of Legislative Services, said any decline in property tax revenue would be mitigated by the negotiated payments in lieu of taxes.

“In addition, county income tax revenues may increase to the extent that new jobs are created in the county,” according to the analysis.

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