This weekend, the first of hundreds of thousands of taxpayer bulletins will start going into the mail ? telling merchants and employers what to do to start collecting about $900 million in new taxes that go into effect New Year?s Day.
“Right now it?s the time frame” that?s the most difficult part of implementing the tax increases signed nine days ago, said Deputy Comptroller Linda Tanton, the little-known official who heads the operating divisions that collect, audit and enforce about $16 billion in state taxes a year. “We usually have a couple of months to implement new taxes, so the time is short for us.”
Even though her boss, Comptroller Peter Franchot, had opposed the calling of the just-completed special session of the General Assembly, his staff actually began planning how to implement possible new taxes as Gov. Martin O?Malley rolled out his plans in early fall.
“We had a sense of the kinds of things they were talking about,” Tanton told The Examiner. “We began drafting bulletins to taxpayers.”
About 100,000 vendors, retailers and service providers collect more than $3 billion in sales taxes. Retailers, now in the midst of their busiest season, need to reprogram their cash registers and billing systems to raise the rate from 5 to 6 percent. Another 120,000 employers and payroll processors collect withholding tax, and many employees “could actually see more money” in their paychecks come January as a higher personal exemption kicks in, Tanton said.
The hardest part of the new tax package to implement will be the new sales tax on computer services that popped up earlier this month. The legislature put off that new tax till July 1. The comptroller?s office needs to draft the regulations for what services are covered and to locate providers of such services. Many of them are sole proprietors, have no employees and have never had to collect taxes before.
