Here is the status of the Governor’s legislation pending in the special session of the General Assembly:

Senate

The Senate has passed each of the Governor’s bills to the House. Note that the transportation bill, SB 5, was merged into SB 2. The Senate is adjourned until Tuesday at 10:00. For an overview of the Senate plan, click here.

House

The House Ways and Means Committee completed work on HB 2, the tax bill, and HB 5, the transportation bill. The House met yesterday afternoon and will be in session most of the day today to move these and possibly other bills. The major differences between the House Ways and Means Committee and the Senate action is as follows:

Individual Income Tax - The Committee adopted 3 income tax brackets lower than the Governor’s proposal, but higher than the Senate: 5.25%, 5.5% and 5.75%. The personal exemption would be increased from $2,400 to $3,600, but phased-out at upper incomes.

Corporate Income Tax - Would be increased to 8.75%.

Sales Tax Services - The Committee replaced the services adopted by the Senate (computer services and arcades) with repair services (any tangible personal that is repaired) and parking.

Hotel Room Rental- The state tax would increase from 5% to 10%

Combined Reporting - The Committee left the Governor’s language in the bill, instead of adopting the Senate study language.

Titling Tax - Adopted the 6% rate, but granted only 50% trade-in allowance.

For more details about the House package, click here.

We are very concerned about the proposed 1.75% increase in the corporate income tax rate (costing businesses over $200 million annually). Maryland’s current 7% rate puts it in the middle of the pack nationally. Increasing it to 8.75% moves the state into the top ten.

We are also concerned about the adoption of combined reporting, and the extension of the sales tax to repair services, which will impact all sectors of the state’s economy.