2015 End of Session Wrap Up: Tax and Revenue Legislation

This post summarizes the status of the remaining tax and revenue bills that MACo took a position on during the 2015 General Assembly Session. Additional tax and revenue bills can be found in the following posts on Conduit Street.

2015 End of Session Wrap Up: Tax & Revenue – Property Tax Related Legislation
2015 End of Session Wrap Up: Tax & Revenue – Retirement Income of Military and First Responders
2015 End of Session Wrap Up: Transportation Funding

Unpaid Water and Sewer Charges: HB 366 would change the definition of “tax” to exclude liens against real property for unpaid water and sewer charges, and prohibit Baltimore City from selling a property at tax sale just for these charges.

MACo opposed the bill as it would have severe statewide consequences. It would undermine local government’s most effective collection tool for public taxes and charges, and would lead to greater delinquency and default on public water and sewer bills.

FINAL STATUS: The House Environment and Transportation Committee voted the bill unfavorable.

MACo Testimony on HB 366

Hotel Taxes Paid by Online Travel Companies: HB 1065/SB 190 would impose a State Sales and Use Tax on the full price paid to an online travel website for the cost of a hotel room, not the wholesale rate the travel website pays to a hotel.

MACo supported both bills with amendments to extend the same principle to any local hotel tax, but was unsuccessful. To further explain the circumstances, online travel companies pay hotels a discounted, wholesale rate for the rooms they book, but these rooms are then sold to customers at a higher retail rate.  While customers are charged the applicable hotel rate, the hotel taxes remitted by the online travel company are based on the wholesale rate, which results in a revenue loss for counties. This scenario has the same effect on the State’s sales and use tax revenue.

FINAL STATUS: SB 190 passed the General Assembly and is being reviewed for the Governor’s signature.  Some advocacy groups are requesting a veto of the legislation. HB 1065 passed out of the House, but no action was taken on the bill in the Senate.

MACo Testimony HB 1065 and SB 190

Rural Economic Development Program/One Maryland: HB 1089/SB 196 would establish the Rural Economic Development Program to spur economic activity in the rural parts of the state. The bill would also change the eligibility criteria for a county to participate in the One Maryland Tax Credit Program.

MACo supported both bills with amendments. While it believed the bill to be well-intentioned, MACo was concerned that some jurisdictions would be prohibited from participating, the job creation requirements were too rigorous for rural areas, and that the local property tax exemptions were mandated. In addition, it was concerned that the program could result in businesses relocating amongst regions of the state. MACo’s amendments addressed these concerns.

FINAL STATUS: Both bills had hearings in their respective committees, Senate Budget and Taxation and House Economic Matters Committee, but no further action was taken.

MACo Testimony on HB 1089 and SB 196