Opponents to Md. tax proposal voice concerns in Annapolis

A pending bill in Annapolis aims to tax a variety of services to fund Maryland education. And on Monday, several voiced their opposition.

Realtors wearing white ball caps and carrying placards gathered outside the House of Delegates Office Building in Annapolis to protest a Maryland bill that would tax their services.

Frieda Nicholls has been a realtor in the Baltimore area for decades, and she’s vocal in her opposition to the bill proposed by the House majority leader, Del. Eric Luedtke.

Nicholls said Maryland homeowners would certainly feel the impact of the tax if it’s passed in its current form.

“Everything on your settlement sheet — from your appraisal to your credit report, your survey, your mortgage fees, your homeowners insurance — every single thing would have a 5% tax on it,” said Nicholls, who also called the legislation “a power grab.”

Al Peteraf with Integrity Real Estate in Havre de Grace, Maryland, said homeowners would bear the brunt of the tax increase.

“These are all huge costs that are going to be passed on to consumers and put a real damper on the real estate industry in general,” he said.

Both Nicholls and Peteraf said that currently, the real estate markets they serve are doing well.

“And we’d like to keep it that way,” Peteraf added.

Members of the real estate industry weren’t alone in opposing HB1638. Regina Ali with AAA Mid-Atlantic said her organization is lobbying against the bill.

“For one, it will tax automotive repairs,” said Ali. “We already know that labor is a large part of the price you pay when you’re having your car repaired. What impact will that have on auto insurance and claims where obviously we’re looking at auto repairs?”

AAA Mid-Atlantic also opposes the bill, Ali said, because it would tax the services that AAA provides, including roadside assistance and travel advice.

Luedtke, talking before the hearing in Annapolis, said he understands that there’s opposition to his bill.

“I think our kids should have the best schools in the world, Luedtke said. “I think it’s worth talking about every possible idea for how to get there. This is just one proposal on the table.”

The bill is intended to fund the proposal in the state’s “Blueprint for Maryland’s Future,” the education reform bill based on recommendations to improve education in the Kirwan Commission’s report.

Gov. Larry Hogan repeated his criticisms of the bill on Monday, after he said it would “destroy” the state’s economy when the tax proposal was first announced.

On Monday, his office released a statement saying the $2.9 billion in revenue the bill is projected to generate through taxes on services would be the biggest single tax increase in the state’s history.

The bill would cut the state’s sales tax by a penny, but then apply taxes to services, with few exceptions. Luedtke said those exceptions are “educational services, health services, social services, which includes child care and non-profit services.”

Luedtke said he expected to hear from business groups lobbying in opposition to the bill as proposed.

“As we’re discussing the bill, people are bringing up these points. And that’s, again, why we have a democratic process,” he said.

WTOP’s Kate Ryan reported from Annapolis.

Kate Ryan

As a member of the award-winning WTOP News, Kate is focused on state and local government. Her focus has always been on how decisions made in a council chamber or state house affect your house. She's also covered breaking news, education and more.

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