Bill Positions

Bill Number: HB 663

Bill Title: Municipal Corporations - Building Excise Tax

Bill Sponsor(s): Delegates McComas, et al.

Subject: Budget & Tax

Committee: W&M

Bill Summary: This bill will authorize municipal corporations to impose, by ordinance or resolution, a building excise tax on all types of building construction within a municipal corporation; requiring the governing body of a municipal corporation to hold a public hearing before adopting a specified ordinance or resolution; prohibiting a municipal corporation from imposing a building excise tax if the municipal corporation imposes any type of impact fee; etc.

History: HB 1260 of 2006 passed the House but then remained in Senate Budget&Tax committee.
The 2007 bills failed -- HB0523 passed the House, but then the Budget & Taxation Committee took no action on either bill.

Chamber Position: Oppose

Position Summary: More than just additional tax expense, the bill represents an additional layer of tax and more complexity in tax administration for businesses. It imposes a tax burden on the person seeking a building permit for new construction, but the revenues can be used for infrastructure not serving the newly constructed building. The bill focuses this new tax burden on only the businesses that are seeking to do new construction, but infrastructure improvements in the municipality will be enjoyed by other existing buildings and arguably the entire population of the municipality. The bill does not define or outline the standards to be used in determining which infrastructure items are “growth-related.” The bill does not give parameters for the tax rates or specify a maximum tax rate. All of these and other details are left to the local ordinance. The seeming unfairness of its application to only a few, and the open ended characteristics of this tax process make it much less desirable to the business community than impact fees that serve the same purpose of providing funds for infrastructure construction related to development.

Position Statement: Click here to download a pdf version of the Maryland Chamber's position statement.

Chamber Staff: Karen Syrylo

General Assembly: Click here to view the bill on the Maryland General Assembly's website.