The House Ways and Means Committee stripped a proposed sales tax on repair services for cars, home and hosts of other items out of tax proposal being brought to the House floor Saturday night.
“We couldn?t get the votes” to pass it in the full House, said Committee Chairman Sheila Hixson.
The committee also cut a proposed doubling of the hotel tax in half. It will now go up from 5 percent to 7.5 percent. Some counties and Baltimore City also add their own 7 percent local tax on hotel rooms.
The Ways and Means Committee met three times on 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 to 6 percent.
A meeting of the full House was delayed several times on Saturday as Democratic leaders tried to reach a compromise tax proposal that at least 71 delegates could support. Hixson, D-Montgomery, 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. Some delegates even wanted the income tax rates raised even higher than 5.75 percent top rate the committee is proposing. Delegates from Montgomery County were divided on that issue because their constituents would pay the bulk of the new revenues the higher income tax rates would generate.
“We feel it is much more progressive than the Senate did,” Hixson said.
Delegates from Baltimore City and Prince George?s County were most vehement in opposing the tax on car repair and other maintenance services, Hixson said. Those taxes would have raised $130 million, a legislative staff member said.
Del. Craig Rice, D-Montgomery, a committee member who has worked as a sales manager for Marriott International, said, “The concern has always been to keep competitive with tax,” and the new rate would have put Maryland?s hotel tax above the District of Columbia.
The proposed 7.5 percent tax would raise an additional $40 million, a legislative analyst said.
These were the principal changes made in a tax package the House committeeapproved Friday. It differs with the plan the Senate approved Thursday, especially in setting higher income tax rates.
The full House began debate on the tax package Saturday night.
