Annapolis, MD — Bills have been introduced into the Maryland General Assembly that would remove the personal property taxes for businesses in St. Mary’s and Calvert counties and also for the entire state.  The statewide bill was sponsored by Del. Mark Fisher [R-27C], pictured at the left.

The St. Mary’s and Calvert bills are slightly different. The St. Mary’s bill (HB 0184) cosponsored by delegates Matt Morgan [R-District 29A], Deborah Rey [R-District 29B], Anthony J. “Tony” O’Donnell [R-District 29C] and Fisher, begins the total elimination of the tax on July 1, 2017. From July 1, 2015 until July 1, 2017 new personal property purchased by business would be covered. There are several exemptions to the tax elimination.

The Calvert County bill (HB 0069), sponsored by Delegates Fisher andO’Donnell , makes the effective date for the total elimination July 1, 2018 and provides for the elimination of the tax for new purchases beginning July 1, 2015 until July 1, 2018.

Fisher’s statewide bill essentially has the same provisions as the St. Mary’s County bill. Del C.T. Wilson [D-Charles] is one of that bill’s cosponsors.

The exemptions in all three bills will have to continue to pay the personal business property taxes. They are:

• “Operating personal property taxes of a railroad or public utility;
• “Property used to provide a cable television, data, or telecommunication service, including all fiber-optic and other cable wire systems, cellular telephone towers, and wireless appartances attached to or installed on cellular telephone towers.”

The Calvert County bill has the additional exemption of “electronic bingo machines authorized to operate under Section 12-308 of the Criminal Justice Article.”

The bills, if passed, would deal a $3 million annual revenue hit to St. Mary’s and a $2.5 reduction for Calvert. Morgan, in an interview with The Bay Net prior to the opening of the 2015 session, said he felt the lost revenue could be recouped by the county through revenues from new business and income taxes from new hires.

In a letter to the St. Mary’s County Commissioner President Randy Guy [R] further explaining the bill, Del. Morgan said, “Exempting businesses from personal property tax is not a new idea for promoting small business investment and growth. Five other counties throughout Maryland exempt businesses from personal property taxes, the largest being Frederick County. In fact, Frederick County touts their ‘zero-rate’ of personal property taxes as a key factor in their economic growth.

“My hope is that you, along with the other four commissioners, will realize the ‘potential meaningful’ effects on job growth this legislation has and remember that our county collects much more revenue in income tax than personal property taxes. It is in the best interest of St. Mary’s to have businesses thriving and hiring and this legislation signals to them that both state and local government value what businesses offer to their community.”

The commissioners in the two counties have not taken an official position on the proposal. In St. Mary’s Commissioner Tom Jarboe [R-District 1) has come out in support of it.

Governor Larry Hogan in his State of the State address also called for elimination of the personal property tax for small business. His office issued the following statement: “Given the important role that small businesses play in creating jobs and growing the state economy, Governor Hogan is proposing new legislation that would eliminate the personal property income tax for businesses that have less than $10,000 in personal property. Under current law, all Maryland businesses must inventory and pay taxes against such personal property as inventory, office furniture, fixtures, equipment, and plant machinery. More than 70,000 Maryland small businesses would benefit from this action, freeing them from making the decision between hiring a third party to carry out an inventory or the time consuming process of documenting minor business purchases themselves.”

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