After losing out on possibly millions of dollars in revenue from their plastic bag tax, Montgomery County, Maryland, may look to retool the program after confusion of how many businesses are supposed to collect on the tax.
Like many counties and municipalities in the D.C. area, Montgomery County collects a 5-cent tax on every plastic and paper bag used at grocery stores, gas stations and other retail outfits.
But enforcement of the program has been lax, according to a report from the Montgomery County Inspector General, which identified many issues.
Only 600 retailers submitted those tax dollars to the county in fiscal year 2022, but according to their report, the number should have been approximately 2,100.
“If you take the average of remittance from FY18 to 22, that was $3,941 per retailer times the 2,100 retailers, you come closer to $8 million over those fiscal years,” said Inspector General Megan Limarzi, admitting an exact number of potential loss is not known.
The audit was discussed in detail during Thursday night’s audit committee meeting.
“From when this bag tax went into effect to today, retail has changed dramatically,” said Council member Sidney Katz, offering a possible explanation for the revenue discrepancy.
The bag tax went into effect in 2012 as a means to push reusable bags and reduce single-use plastics in the environment.
One of the recommendations from the inspector general is to create a master list of businesses that the tax would apply to.
“This is a county government (that) likes to regulate a lot of things. And we have to be able to communicate with businesses on what we’re expecting of them. And if we don’t, if we don’t know who they are, we can’t communicate with them,” Council member Andrew Friedson said. “I think that is a major problem.”
Enforcement of the bag tax was transferred to the Department of Environmental Protection a year ago. The department has since hired someone to solely focus on the program and its enforcement. Their primary focus since being hired in April has been to create a master list of businesses, Director of the Department of Environmental Protection Jon Monger told the council.
“We try not to penalize, but to educate first,” Acting Deputy Director Vicky Wan said. “So right now, we’re very focused on education and outreach into ensure that all of the businesses and all of the cashiers that they hire know that this law exists.”
According to the decade-old law, businesses can be fined $750 for non-compliance.
