La Plata, MD – For many Charles County residents, the new transfer tax imposed upon home purchasers earlier this year was not a welcome thing. Many citizens railed against the proposal at the July 24 public hearing in La Plata, but watched the measure pass by a 3-2 margin.

Given the fact that it has confused most people—especially first-time homebuyers—going to settlement as to whether the new tax effects them or not, perhaps it isn’t surprising the issue ended up in Charles County Circuit Court, Friday, Aug. 21.

Sue Greer, representing plaintiffs Gary French and Holly Dunbar, told visiting Judge J. P. Salmon that the new law, which went into effect Aug. 8, “goes against state law.”

Greer said Charles County modeled the new statute after Caroline County, but she added that Caroline and Cecil counties had flaws in their transfer tax. The crux, she explained, was that the Annotated Code of Maryland exempts first time homebuyers from having to pay the tax. Charles County leaders stipulated that first time purchasers would not be excluded from the tax.

“It’s caused a lot of confusion,” she said. “It was based on faulty information.”

She added that St. Mary’s County also enacted a transfer tax, and much like Charles County, used Caroline County’s transfer tax as the model, and discovered afterward that it was contrary to state law.

“St. Mary’s County went back and corrected its statute,” Greer said. “They went back and fixed what they needed to fix. It’s presumptuous of the county to say that does not impose upon the homeowners a sanction of substantial hardship.

“The remedy is to make the county compliant by having the county and legislature clarify and correct the statute,” she added.

Adam Schwartz, representing the county, said the local example is valid.

“In this issue, the county exercised its legal right,” Schwartz said.

“The plaintiffs say if there is going to be an exemption for first-time homebuyers, it has to be all of them,” Salmon stated.

Schwartz argued that the state law does not define first-time homebuyers.

“There’s a process here,” he said.

He added that the transfer tax was enacted to address the budget shortfall in the county.

When Greer called into question who should receive the new tax—the clerk of the circuit court, who usually handles such tax revenues—or the county treasurer, both Schwartz and county attorney Elizabeth Theobolds “strenuously objected” to the information being brought into the case.

“We’re being ambushed here today,” Theobolds stated.

Salmon allowed the information to presented.

“I want to hear what they have to say,” Salmon said.

“I’ll have plenty to think about on the way back to Upper Marlboro,” the judge added.

Contact Joseph Norris at joe.norris@thebaynet.com