State lawmakers are proposing to tax some of our bad habits in an attempt to repeal an unpopular computer services sales tax and possibly raise money for health care.
But taxes on tanning salons, cosmetic surgery, tobacco paraphernalia and alcohol, among other things, would hurt businesses and even drive people out of the state, opponents argue.
“Legislators may not want to believe it, but people are crossing over the border,” said Bruce Bereano, an Annapolis lobbyist representing several clients, including alcohol and tobacco distributors.
Lawmakers contend that nonessential services are legitimately taxable. They also want to find a way to eliminate the 6 percent computer services sales tax, which was approved during November’s special session and becomes effective in July. The tax is expected to raise $200 million a year.
Delegate Dan Morhaim, D-Baltimore County, a physician and lead sponsor of a bill to impose a sales tax on tanning salon services, said the additional fees will raise money for health care and may help discourage the practice.
“Tanning salons are related to an increase in skin cancer, especially for young people who will tan early in life and develop cancer later in life,” he said.
But Indoor Tanning Association Executive Director John Overstreet said the additional fees will strain small businesses.
“As the economy slips, these businesses struggle more and more,” he said. “[Salons] are worried about the additional cost of doing business.”
Consumers could also pay more for plastic surgery under a bill proposed by Delegate Saqib Ali, D-Montgomery, which would apply a sales tax to strictly cosmetic procedures.
“Medically unnecessary plastic surgery is a luxury item,” he said. “People who get [cosmetic surgery] can afford to pay a 6 percent sales tax.”
Ali said his goal is to find an alternative revenue source to take the place of the computer services tax, and not to discourage procedures.
But taxing plastic surgery would not bring significant revenue for the state, said Dr. Michele Shermak, chief of plastic surgery at Johns Hopkins Bayview Medical Center and spokeswoman for the American Society of Plastic Surgeons. She added that a similar tax in New Jersey has failed to raise substantial revenue.
“It’s horrible for patients and it’s horrible for physicians,” she said, predicting that doctors would lose business to other states and have a harder time getting their services reimbursed by insurance companies.
Marylanders could also be facing a $20 surcharge per item on smoking “paraphernalia,” which originally included cigarette rolling papers, pipes of several materials and “roach” clips intended to hold marijuana joints.
But lead sponsor Sen. C. Anthony Muse, D-Prince George’s, said cigarette rolling papers and pipes made out of briar, clay and the white mineral meerschaum have been amended out of the bill to avoid punishing legal tobacco smokers.
The exempted pipes, commonly found in tobacco shops, are not his target, Muse said. He wants to go after gas stations and convenience stories selling crack and marijuana pipes to youth.
He said the surcharge would go to a health fund for children.
<!–
–>