Senators started “informal work” resolving their differences with the House over $1.4 billion in tax increases, Senate President Thomas Mike Miller said Wednesday.
“Everybody?s upbeat, things are on target,” Miller said. “We?re fairly confident that the entire package is close to enactment. There are not major differences.”
The two houses have agreed to:
» Raise the sales tax rate from 5 to 6 percent.
» Double the cigarette tax to $2 a pack.
» Raise the car titling tax from 5 to 6 percent, but give credit for a trade-in car.
They also have agreed to raise income and corporate taxes, and cut spending in next year?s budget by $500 million. But there are a number of sticking points between the two houses over all the details of those tax increases.
The largest difference is over income tax rates. As Gov. Martin O?Malley had done, the House provides income tax relief to people making less than $150,000 per year and raises taxes for those above that bracket. The Senate raised rates slightly at the upper level and did little for those below.
O?Malley said he hoped the final plan would be closer to his proposal to help working families.
The Senate also added the increased sale tax to computer services, a $200 million item that the House never considered. The House Ways and Means Committee ultimately stripped from the bill any expansion of the sales tax to other services.
The committee held an abbreviated hearing on the Senate version of the revenue bill Wednesday. Business lobbyists focused on taking computer services out of the bill and changing parts of a Senate study on “combined reporting” ? revising the way corporations report their taxable income.
Sean Looney for Comcast testified that the computer services tax was a levy that multiple companies would either pass along to each other or manage to avoid altogether. “When you get in conference, please don?t drink the Kool-Aid” on computer services, Looney said. “There?s no money there.”
Health and anti-smoking advocates asked to take out a Senate amendment that would reduce the cigarette tax if Congress raised the federal tobacco tax.
