Heavy Equipment Gross Receipts Tax Must be True Local Option and Revenue Neutral

MACo Associate Director Andrea Mansfield and the Chief of Treasury from Prince George’s County Stan Willis testified today before the House Ways and Means Committee on HB 817.  The bill would grant a personal property tax exemption for heavy equipment used for short-term lease or rental, and would grant local governments the option to enact a new gross receipts tax on the use of that equipment.  While widely described as “revenue neutral,” the bill as introduced completely repeals a current tax but, in return, only offers counties an option to pass local legislation to levy a new, explicitly capped, tax with largely uncertain net effect.

Ms. Mansfield testified that for MACo to support the bill it would need to be amended to make it a true local option and truly revenue neutral.  Mr. Willis agreed with this position and added that amendments also need to clarify the business entity to which the gross receipts tax applies, the entity renting the equipment or the entity holding the equipment.

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