A $1.4 billion package of increases to the sales, income, cigarette and corporate taxes passed the House of Delegates on Sunday morning.
The House version was more progressive, with low-income families paying less and the wealthy paying much more than in the Senate plan, said House Speaker Michael Busch, D-Anne Arundel.
“We do think we have more relief in it for the average Maryland family than the Senate proposal that passed, but we?re pretty close in comparison, and we?ll get to a conference committee after tonight and start to work out the details,” Busch said.
The House and Senate now must reconcile differing versions of the package.
Before the votes, the Ways and Means Committee had stripped a proposed sales tax on repair services for cars, houses and other items out of the tax proposal. They had removed the tax on computer services the Senate had added.
“We couldn?t get the votes” to pass it in the full House, said Committee Chairwoman Del. Sheila Hixson, D-Montgomery.
The Ways and Means Committee met three times Saturday, as did the House Democratic caucus.
Their leaders tried to counter the strong resistance by some members to expanding the sales tax to repairs and parking, in addition to raising the sales tax from 5 percent to 6 percent.
A meeting of the full House was delayed several times, as Democratic leaders tried to reach a compromise tax proposal that at least 71 delegates could support.
Hixson said they were coming up 30 votes short in winning the new tax on repairs and parking.
The sales tax is seen as highly regressive, hurting people with lower incomes the most.
Delegates from Baltimore City and Prince George?s County were most vehemently opposed to the tax on car repair and other maintenance services, Hixson said. Those taxes would have raised $130 million.
Some delegates wanted the income tax rates raised even higher than the 5.75 percent top rate the committee is proposing.
Montgomery County delegates were divided on that issue because their constituents would pay the bulk of the new revenues the higher income tax rates would generate.
The Ways and Means Committee also cut a proposed doubling of the hotel tax in half to 7.5 percent, which would have raised an additional $40 million, a legislative analyst said.
Del. Craig Rice, D-Montgomery, a committee member who has worked as a sales manager for Marriott International, said the new rate would have put Maryland?s hotel tax above the District of Columbia.
BY THE NUMBERS
These increases are in the approved House tax plan:
» Sales tax from 5 percent to 6 percent
» Tobacco tax from $1 to $2 a pack
» Corporate income tax from 7 percent to 8.75 percent
INCOME TAX
Single filers making:
» More than $125,000 in annual income at 5.25 percent
» More than $150,000 at 5.5 percent
» More than $200,000 at 5.75 percent
Joint filers making:
» More than $175,000 in annual income at 5.25 percent
» More than $200,000 at 5.5 percent
» More than $250,000 at 5.75 percent
» Personal exemption from $2,400 to $3,200
» Phase out exemptions at certain income levels
The current 4.75 percent rate would apply to single filers who earn between $3,000 and $125,000 and joint filers between $3,000 and $175,000.
These increases in the approved Senate tax plan differ from the House proposal:
» Corporate income tax from 7 percent to 8 percent
INCOME TAX
» Single filers making more than $150,000 in annual income at 5 percent
» Joint filers making more than $200,000 at 5 percent
» Filers making more than $500,000 at 5.5 percent
Source: Associated Press
The Associated Press contributed to this story.
