Senate Committee Takes Action on Administration’s Tax Relief Proposals

A Senate Committee voted Friday on four of the Administration’s proposals for tax relief, voting down one proposal and voting the other three favorable with amendments. As reported by the Washington Post,

The Senate Budget and Taxation Committee killed a bill that would have exempted police, firefighters and other first responders from paying income taxes on a chunk of their pensions. It significantly watered down bills that would have halted automatic increases in the state gas tax, eliminated personal property taxes for some small businesses and exempted all military retirement income from being taxed.

As introduced HB 483/SB 589  would have repealed the inflationary increases on the gas tax and future adjustments in the sales tax imposed on the price of gasoline.

The Senate committee stripped out of the gas-tax bill a provision that would have halted automatic increases scheduled to take place every year as well as other provisions that also would have decreased revenue the state is planning to use for transportation projects.

They left — and approved — one part of the bill: lowering the cap on inflation-related increases in the gas tax to 3 percent instead of 8 percent.

An article in the Baltimore Sun summarizes the changes to the other Administration bills.

Hogan had also proposed exempting all income from military and first-responder pension plans from taxation. That idea, too, seemed doomed from the start as House Speaker Michael E. Busch questioned whether it would open the door to other groups seeking exemptions.

On the military pensions bill, it stripped away Hogan’s language and substituted a measure that has passed the Senate twice before — raising the state’s existing exemption on military pensions from $5,000 to $10,000 for those over 65.

The governor’s bill to relieve small businesses of the burden of paying the personal property tax fared somewhat better. The panel approved Hogan’s proposal to exempt a company’s first $10,000 in business equipment from that tax, which is collected by local governments. However, senators delayed its impact to July 1, 2017, and made the law contingent on improvements in the state’s tax assessment system.

MACo opposed HB 480/SB 590, which as introduced, would have mandated local governments to provide a personal property tax exemption for businesses with personal property of a total assessed value of $10,000 or less.

MACo did not take a position on a SB 31 /HB 177  which would also expand the existing military retirement exemption to $10,000 for those age 65 and 65.