Shop Maryland Energy Tax-free Weekend

Are you in the market for new appliances? Take advantage of Shop Maryland Energy tax-free weekend on select ENERGY STAR appliances. The tax-free weekend will take place Saturday, February 18, through Monday, February 20. This is the eighth year for this annual event, which allows consumers to make qualifying purchases on qualifying ENERGY STAR products without paying the state’s six percent sales tax.

OLO Report Compares Tax Burdens of Six Local Jurisdictions

Take a look at the report from our Office of Legislative Oversight entitled Individual and Business Tax Burdens in Local Jurisdictions. The report analyzes the tax burden for individuals and businesses in Montgomery County compared to five other local jurisdictions: Prince George’s, Howard and Frederick counties in Maryland, Fairfax County in Virginia and the District of Columbia.

The tax burden data in the OLO report comes from two reports conducted for the District of Columbia government. Some highlights of the OLO report include:

• Among the local jurisdictions examined in the report, Montgomery County ranked third in projected Fiscal Year 2016 total revenue at $5.1 billion, following the District ($14.0 billion) and Fairfax County ($7.5 billion).
• Among families in the six jurisdictions at five annual income levels ranging from $25,000 to $150,000, Montgomery County ranked third in annual tax burden at all income levels except for $50,000. At the $50,000 level, the tax burden in Montgomery County is lower than all but one of the jurisdictions examined.
• A September 2013 report created for the D.C. Tax Revision Commission found that in many scenarios, taxes are lower for businesses located in Montgomery County, compared to Prince George’s County, Fairfax County and the District of Columbia.

The Council is scheduled to receive a briefing on the report on Tuesday, July 12. Stop by the Third Floor Hearing Room of the Council Office Building or watch it on County Cable Montgomery.

My Thoughts on the Budget Agreement

The Council today reached agreement on a $5.07 billion total County operating budget for Fiscal Year 2016. I voted in opposition. The budget reflects a 1.7 percent increase over the approved budget for FY15. We will formally adopt the FY16 operating budget and amendments to Capital Improvements Program next Thursday. The budget will go into effect on July 1.

While I am pleased that this budget holds the line on property taxes and limits our spending increase to 1.7 percent over last year, I remain deeply troubled by the fuel-energy tax rate. Residents and business owners will remember that we doubled this rate when we were in the throes of the recession. At that time, we promised to eliminate the increase entirely when the economy improved. To date, we have only reduced the increase by 27 percent. For FY16, we did not reduce it at all.

We have been working hard over the past several years to boost our economic development initiatives and bring more jobs, and ultimately more revenue, to Montgomery County. I am very sensitive to the cost of doing business here, and I am not willing to undercut our efforts to improve the local economy with such an onerous fuel-energy tax rate.

I appreciate the work that has gone into this budget but regret that I cannot support it. See the full press release.

My Views on the Fuel/Energy Tax Rate

We're in the final days of our budget deliberations, but there are still some big decisions to make. On Wednesday, we will discuss revenues, including the proposed fuel/energy tax rate. We raised this rate when we were in the throes of the recession with the understanding we would decrease it when the economy improved. To date we've only reduced the increase by 27 percent, so I'm asking the Council to reduce it more this year. Learn more in this video by County Cable Montgomery.

Bill to Establish Excise Tax on Electronic Cigarettes

Councilmember Tom Hucker yesterday introduced Bill 15-15 that would establish an excise tax on the distribution of electronic cigarette products. The bill has six co-sponsors, including me.

Under current state tax law, cigarettes are taxed at $2 per pack and other tobacco products are taxed at a rate of 30 percent of the wholesale price. Electronic cigarettes are not currently subject to state tobacco taxes. The proposed tax on the distribution of electronic cigarettes would be 30 percent of the wholesale price--mirroring the state tax on other tobacco products.

If you want to weigh in, you can testify at the public hearing at 7:30 on May 5. Call 240-777-7803 to sign up. You can also send your testimony to county.council@montgomerycountymd.gov.

Shop Maryland Tax-Free Week

From the Maryland Comptroller: The second Sunday of August to the following Saturday is designated as Shop Maryland tax-free Week each year. That means qualifying apparel and footwear $100 or less, per item, are exempt from the state sales tax. Accessory items are not included. The tax-free week for 2013 will occur Sunday, August 11, through Saturday, August 17.

Council Approves Increasing Tax Credits for Historic Properties

Today we approved a bill that will allow owners of properties designated as “historic” to take tax credits of up to 25 percent for qualified improvements that help preserve the historic nature of the property. This is a great incentive for property owners to make investments in preservation that benefit us all.

Maryland and Montgomery County have previously allowed tax credits of 10 percent for qualified improvements to historic homes. As of July 1, the state law changed and now allows a 25 percent tax credit. Passage of the bill keeps the County at highest possible tax credit allowed by law.

The Council designates specific properties or districts as historic by including them in the Master Plan for Historic Preservation. The designation provides public benefit by retaining the history of the property. However, the owner of a historic property has additional burdens compared to other property owners.

Once designated, the owners of historic property must seek a historic area work permit before making changes to the exterior of their property. The review is intended to ensure that the historic integrity of the site is maintained. The cost for improvements to historic properties is generally higher than it is for non-historic properties as the material and labor necessary to adhere to historic preservation standards make improvements more expensive. The tax credit will help offset this burden. In FY11, there were 141 applications for historic tax credits. Kudos to Councilmember Craig Rice for sponsoring this legislation.

Apply Now for Property Tax Credits

Montgomery County homeowners who have a limited income or are at least 70 years of age may be eligible for property tax credits that will limit the amount of taxes they must pay. One application will determine eligibility for three programs -- the Maryland Homeowners’ Property Tax Credit Program; the Montgomery County Supplemental Property Tax Credit; and the Montgomery County Senior Property Tax Credit.

Property owners who have applied for a tax credit previously and been denied are encouraged to apply again, since the tax credit programs have changed and been improved over the years, and your income situation may have changed.

In order to be eligible for the Maryland Homeowners’ Property Tax Credit and the County Supplemental Property Tax Credit, a homeowner must:

• Have an annual household income of up to $60,000;
• Own and live in their home in Montgomery County;
• Must have lived in that home for at least six months, or will live in it for six of the next 12 months;
• The combined net worth of everyone in the household must not exceed $200,000. This does not include the value of the principal residence or the cash value of any qualified retirement savings or individual retirement accounts. It does include any other real estate or investments that are owned;
• Only the first $300,000 of the home’s assessed value counts towards these credits;
• The cities of Gaithersburg and Rockville provide additional tax credits to their homeowners under similar programs.

Homeowners who are at least 70 years of age will automatically receive the Montgomery County Senior Property Tax Credit if they already receive either or both of the Maryland and Montgomery County Tax Credits.

Homeowners who file and qualify after May 1 but before the September 1, 2012 deadline will receive either a “revised” tax bill that reflects the credit amount or a refund if the taxes have already been paid in full.

To apply for these tax credits, homeowners must fill out one application form each year. Application forms are available by calling the Maryland State Department of Assessments and Taxation (SDAT) at 1-800-944-7403, or by downloading the form and instructions from the SDAT website at http://www.dat.state.md.us/sdatweb/htc.html.

Maryland Tax Holiday

Get your shopping list ready for Shop Maryland Week, August 14-20. Qualifying apparel and footwear $100 or less will be exempt from the Maryland six percent sales tax. Accessories are not included. To learn more, visit the Comptroller of Maryland’s Web site.

Property Tax Credit Deadline Extended--Apply Now

I get a lot of calls in my office about low-income and senior homeowner property tax credits, so I want to be sure everyone knows that the deadline to apply for the credits has been extended to November 2. Here's some more information about the County and State programs:

The State of Maryland has a program that gives a credit against the homeowner’s property tax bill if the property taxes exceed a fixed percentage of the household income. In other words, it sets a limit on the amount of property taxes any homeowner must pay, based on his or her income. Montgomery County offers two supplemental tax credit programs. You can apply for all three programs with one application. The deadline to apply for credits has been extended to Monday, Nov. 2.

The tax credit programs available are:
• Maryland Homeowners’ Property Tax Credit Program
• Montgomery County Supplemental Property Tax Credit
• Montgomery County Senior Property Tax Credit

Who is Eligible?
Even if you have applied for a tax credit previously and been denied, you are encouraged to apply again since the tax credit programs have changed and been improved over the years.
You may be eligible for the Maryland Homeowners’ Property Tax Credit and the County Supplemental Property Tax Credit if:

• Your annual household income is about $64,000 or less
• You own and live in your home in Montgomery County
• You have lived in that home for at least six months, or will live in it for six of the next 12 months
• The combined net worth of everyone in your household must not exceed $200,000. This does not include the value of your principal residence or the cash value of any qualified retirement savings or individual retirement accounts. It does include any other real estate or investments you own.
• Only the first $300,000 of your home’s assessed value counts toward these credits
• The cities of Gaithersburg and Rockville provide additional tax credits to their homeowners under similar programs

If you are at least 70 years of age, you will automatically receive the Montgomery County Senior Property Tax Credit if you receive either or both of the Maryland and Montgomery County Tax Credits.

For more information, call the Tax Credits Telephone Service at 410-767-4433 or 1-800-944-7403 (toll free in Maryland).