The Senate was close to giving tentative approval Thursday night to its reworked version of Gov. Martin O?Malley?s proposal to increase sales, income and corporate taxes that would raise $1.5 billion.
But the plan faces a filibuster to talk it to death Thursday night or Friday morning by 14 Republicans and at least one Democrat.
The Senate resisted many attempts to make changes to bill by both Republicans and Democrats.
The bill raises income tax rates for people making over $150,000 a year, and an attempt by Sen. Andy Harris, R-Baltimore County, to take that out of the bill was rejected by a vote of 25 to 20.
In a major floor amendment offered by Sen. Brian Frosh, D-Montgomery, that passed by one vote, people who live more than three months a year in Maryland would have to start paying state income taxes. The current law sets the requirement at six months.
The bill also raises the sales tax from 5 to 6 percent and extends the tax to computer services and landscaping services. Those services were added by the Senate Budget and Taxation Committee on Tuesday without a hearing, and there were several attempts to take those provisions out of the bill.
The most serious challenge to the committee action came from Sen. Delores Kelley, D-Baltimore County, who wanted to remove landscapers from the new taxes. “These are microbusinesses,” Kelley said.
“The real money is with accountants and lawyers.”
Kelley?s amendment failed by one vote, with eight Democrats and all 14 Republicans supporting her.
There were also serious attempts to not broaden the sales tax to computer services, a new levy that would raise $250 million. Those efforts failed on a 26-21 vote.
In a letter to House Speaker Michael Busch, Comptroller Peter Franchot objected to the new computer taxes. “I am frustrated by the seemingly random and arbitrary manner in which these industries have been targeted for taxation,” Franchot said.
“Pennsylvania and Florida enacted a sales tax on computer services, only to repeal them at a later date,” Franchot said. The new tax sends “a disturbing message” to Maryland?s business community, particularly, the technology sector. “Adding a tax provision of this magnitude to legislation at the 11th hour ? without the courtesy of advance notice, the benefit of meaningful public input or sufficient understanding of its effects ? plays into the hands of those who would unfairly question Maryland?s business climate,” the comptroller wrote.
