Legislation repealing a sales tax on computer services and replacing it with a new income tax on residents earning more than $1 million has cleared the General Assembly and is headed to the governor?s desk.
Members of the House of Delegates voted 93 to 44 on legislation that makes up a $200 million gap the so-called “tech tax” was expected to generate. The bill, which already cleared the Senate, also includes $50 million in cuts to transportation funding and requires the state?s Board of Public Works to identify an additional $50 million in cuts.
The vote came after intense debate in a rare Saturday evening session just two days before the end of the 90-day legislature.
“It?s a thankless job being a legislator when there is a shortage,” said Majority Leader Del. Kumar Barve. “No matter what we do, we will be criticized.”
Barve was one of one several Montgomery County Democrats to vote in favor of the bill ? which has the support of Gov. Martin O?Malley ? despite opposition from colleagues who said the so-called “millionaire?s tax” disproportionately affects them.
The measure creates a new tax bracket of 6.25 percent for personal earnings beyond $1 million, generating about $110 million a year. About 6,000 Marylanders, mostly in Montgomery County, will pay the tax.
Republicans largely voted against the measure, suggesting additional cuts or tapping into the state?s general fund balance ? reducing it by $114 million and leaving just under $100 million. Those alternatives failed.
“Taxes don?t just redistribute wealth, they redistribute people,” said Minority Whip Christopher Shank of Washington County. “Ifwe pass this, they have the option of relocating.”
