Maryland Comptroller Peter Franchot on Thursday told Bethesda small business owners he’s confident a bill that would require online retailers to collect sales taxes will pass the House of Representatives.
The Marketplace Fairness Act, which the Senate passed and which awaits review in the House, would force major online retailers such as Amazon to collect sales taxes from customers in other states. Franchot said Maryland loses out on roughly $170 million in uncollected online sales tax revenue each year, though his main concern is the disadvantage it provides small businesses.
In my business, we have medium-sized companies that don’t have locations in Maryland that sell on the internet,” said Bethesda-Chevy Chase Chamber of Commerce Board Chair Andy Stern. Stern owns Andy Stern’s Office Furniture, which has a Rockville showroom. “Not only can they sell at lower prices because they don’t have bricks and mortar, they don’t have to carry inventory. They don’t have to do any of that stuff. They then have a six percent advantage when they sell into Maryland because they don’t have to charge their customer the sales tax. It’s completely and totally unfair.”
Stern joined Franchot, Maryland Retailers Association President Patrick Donoho and Union Hardware co-owner David Goldberg at Goldberg’s Wisconsin Avenue showroom.
“Because if it’s about price, I’m gonna lose,” Goldberg said. “I know that up front. I can’t make it if it’s about price. So I’ve had to figure out a way to make it not about price. I’ve been bringing in products, mostly from Europe, that aren’t on the internet.”
States have been pushing for enforcement of an internet sales tax for years and if passed, each state will likely have to manage enforcement issues.
Franchot said he’s optimistic that the Republican-controlled House will pass the measure, despite its appearance as a new tax.
“This is about protecting Main Street and everybody has a Main Street,” Franchot said.
“I know it’s difficult for people to put their mind around, but this is not a tax increase. You already owe the tax,” Donoho said. “It’s just a way to collect it. That’s all it is.”
Stern said he has people come into his showrooms with their iPhones who take pictures of price tags, decide what furniture they like, Google it and order it over the internet in his store.
“I’m at a six percent disadvantage automatically,” Stern said.
Franchot related a similar story from a longtime jewelry business in Baltimore, where customers will browse the merchandise, order it online and then ask the owner for an empty jewelry box so their wives won’t know it came from an internet company.
“You need to support the local brick-and-mortar stores. I want to make it to 100 years and beyond,” Goldberg said. “It certainly has not been helpful.”
Maryland’s top tax man told a Bethesda audience he is cringing this tax day, despite what most Democrats have labeled as a successful General Assembly.
Comptroller Peter Franchot, a Democrat, came out against a gas tax to pay for transportation projects last year, arguing it would hurt middle and working class people in a still fragile economy. Democrats passed a transportation bill that includes a gas tax increase in the recently concluded 2013 legislative session.
“For us in this pocket of affluence, it’s not a big deal, but 200,000 in Maryland are looking for work or underemployed,” Franchot told a meeting of the Bethesda-Chevy Chase Democratic Club on Monday morning. “I’m cringing because of the rhetoric of our party and the actual results. …We’re very proud of our leadership but we have to change direction.”
In March, the House and Senate approved the gas tax hike, backed by Gov. Martin O’Malley (D), that will raise gas prices by 4 cents in July and 13 to 20 cents by July 2016.
Franchot, thought to be a candidate for governor in the 2014 primary, surprised many late last year when he announced he would instead seek re-election as comptroller.
In his talk this morning, Franchot also spoke about the difficulty of attracting a business to the state and said he’d like to see more Democrats who understand what’s going on in the economy.
“If you want to move a business to Montgomery County, take a ticket and get in line,” Franchot said.
As for tax collection, Franchot said he anticipated a smooth tax season with state refunds getting back to taxpayers within three days if they paid online.
Montgomery County state senators and delegates today touted the transportation bill, death penalty repeal and new gun control law that came out of the just completed 90-day 2013 state legislative session during a press conference in Rockville.
Del. Anne Kaiser (D-Dist. 14) said finding transportation funding was priority No. 1, 2 and 3 for the Montgomery County delegation. County Executive Isiah Leggett (D), who led the press conference, has long advocated for a gas tax increase to provide funding for transportation projects in the county, including the state’s Purple Line light rail.
In March, the House and Senate approved a gas tax hike from Gov. Martin O’Malley (D) that will raise gas taxes by 4 cents in July and 13 to 20 cents by July 2016.
Councilmember George Leventhal (D-At large) said a gas tax hike in Virginia helped get the transportation bill the votes necessary.
“For legislators who don’t represent transit-dependent areas, it was a tough sell,” Leventhal said. “So when it was clear when we were losing in competition to Virginia, that won a lot of votes from suburban and rural Democrats. …From the governor’s perspective, it was absolutely decisive. It created the political space that he needed to make it happen.”
The Montgomery delegation also brought back more than $28 million in state grants for MCPS construction, including $137,000 for improvements at Walt Whitman High School, $898,000 for Thomas W. Pyle Middle School and $332,000 for Strathmore Elementary School. Education aid to the county grew by almost $14 million.
Sen. Brian Frosh (D-Dist. 16) of Chevy Chase was key in the state’s gun control bill, leading the effort soon after the Newtown, Conn., mass shooting.
The State Senate last week approved an O’Malley-backed bill 28-19 one day after the House of Delegates ushered it through. It’s one of the most restrictive gun control bills in the county, with a ban on assault weapons, an ammunition limit of 10 rounds, a license and fingerprint requirement for all new handgun sales and a ban on gun ownership by the mentally ill.
District 16 Del. Susan Lee and District 18 Del. Al Carr and Sen. Richard Madaleno joined the gathering, which included Leggett, Leventhal, Councilmembers Nancy Navarro, Nancy Floreen, Craig Rice, Marc Elrich and Hans Riemer. Roger Berliner was at another meeting.
“This is a very special moment for us, because the elected officials in Montgomery County are a famously opinionated and contentious lot,” said Sen. Jamie Raskin (D-Dist. 20) of Takoma Park. “We fight about a lot of things and have a lot of conflict, but the point of this is when we get together and we have our eyes on the prize, we are absolutely unstoppable.”
Another Hot April Day, With Shot At Record Highs — Temperatures could reach 90 degrees today, which would best the area record highs of 89 set at National and BWI Airports in 1922. [Capital Weather Gang]
Two Energy Tax Cut Proposals At County Council — Two councilmembers are proposing energy tax cuts for the upcoming budget that would save the average resident between $10 and $20 a year. [Washington Examiner]
Montgomery County State Delegation Celebrates Successful Session — With a transportation bill that could provide the state’s portion of the 16-mile Purple Line light rail and a 4 percent increase of direct state aid to the county, delegates and state senators from Montgomery say they had a productive General Assembly. [The Gazette]
Know A Good Landscaper? — Forum user sandyspring would like to know in our Forums. Take advantage of our new feature by connecting with the more than 20,000 people who visit our site each month. [Forums]
Woodmont Rooftop Bar To Be Named “Roof” — Tommy Joe’s owner Alan Pohoryles, who hopes to open a two-level bar and restaurant at the building under construction on the corner of Cordell and Norfolk Avenues, decided on a straightforward name around what will be place’s signature characteristic. [Bethesda Patch]
Residents Not Happy With Highway Plan For Montrose Road East — Residents and other members of the White Flint Implementation Committee are unhappy with plans revealed by the State Highway Administration on Monday night for the eastward extension of Montrose Parkway toward Veirs Mill Road. The route would connect the north end of White Flint with Rockville, Aspen Hill and mid-county. [Friends of White Flint]
Montgomery County Might Have To Refund $72.5 million in collected taxes — If the Maryland Court of Appeals does not reconsider its ruling on out-of-state tax credits for county taxes, Montgomery would be on the hook for taxes collected in 2009, 2010 and 2011. [The Gazette]
Montgomery Cops To Get A Raise — Montgomery County Police will get their first raise in four years, a 2.1 percent bump starting July 1. [Washington Examiner]
Flickr photo by Rootchopper
As included in today’s “Morning Notes,” a group of Maryland State Senators is pushing a bill that would exempt defense contractor Lockheed Martin from paying about $450,000 a year in hotel taxes and force Montgomery County to refund $1.4 million in taxes collected since 2010 on Lockheed’s Center for Leadership Excellence.
County Executive Isiah Leggett (D) has proposed a tax break and grant for Lockheed. Both failed to gain the support of the County Council.
The Bethesda-based company argues the Center, which includes conference rooms, a restaurant and lodging, should not be subject to the county’s commercial hotel tax because it is used for employees only.
County councilmembers against Leggett’s past proposals argued the hotel tax does legally apply to the Center, Lockheed knew of the tax when it built the facility, the Center competes with other commercial hotels that do pay the tax and that money is needed to pay for county services.
Still others, including the Washington Post editorial board last year, argued members of the Council were allowing peace activists against Lockheed to mask the economic benefit the company brings to the county.
Now, led by State Senator Nancy King (D-Dist. 39), a group of senators is advancing a measure that would exempt facilities such as Lockheed’s Center from such payments and force Montgomery County to refund past taxes.
What do you think? Please vote in the poll below and leave your opinions in the comments section.
Flickr photo by kgunnar
County Executive Isiah Leggett (D) was in attendance last night when Gov. Martin O’Malley, House Speaker Michael Busch and Senate President Thomas V. Mike Miller announced their gas tax plan in Annapolis.
Today his office released a statement in which the longtime supporter of raising the gas tax for the first time since 1992 praised the state’s political leadership.
Leggett and county leaders say the proposal, which would effectively raise the price of gas by 2 cents a gallon starting in July and another 7 cents per gallon starting next July, is necessary to restore the state’s dwindling Transportation Trust Fund and provide dollars to match the federal government’s support of the Purple Line light rail.
Raising gas prices is politically unpopular, with polls showing a clear majority of Marylanders are against it. Leggett said it was even more unpopular in 2006, when he first proposed it and O’Malley’s support was less clear:
“I am very pleased that Governor O’Malley, Senate President Miller, and Speaker Busch have joined forces to insure that the Maryland Transportation Trust Fund has the needed resources to maintain and improve our State’s roads and transportation systems and grow jobs and business into the future.
“Several years ago, I virtually stood alone in advocating for an increase in the state’s gasoline tax — which hasn’t been increased since 1992, when George Bush Senior was President. It wasn’t popular then, and it isn’t popular now. But we needed it then, and we still need it now.
“This will help replenish the State’s Transportation Trust Fund and assist counties throughout the state to advance major transportation infrastructure. Inaction costs commuters even more time stuck in congestion and costs the State jobs and investment.”
The proposal is projected to raise $3.4 billion in transportation funding over the next five years, according to the Washington Post.
O’Malley Introduces Gas Tax Hike For Transportation Funding — Gov. Martin O’Malley (D), with the support of House Speaker Michael Busch (D) and Senate President Thomas V. Mike Miller (D), last night introduced a transportation funding plan that would raise the sales tax of wholesale gas, thus raising gas prices an estimated 2 cents per gallon starting in July and an additional 7 cents more next July. Leaders argued the money was necessary to match federal funding for the Purple Line. [Washington Post] [Baltimore Sun] [Washington Examiner]
Pepco Says It’s Ready For Snow — The power company said it has more than 450 overhead line contractors ready to deal with the three to eight inches of snow projected for the inner D.C. suburbs and the as much as 17 inches projected for western areas of Montgomery County. Pepco is also asking for 250 mutual assistance crews from other utilities and says it has almost 300 tree contractors already working. [Pepco]
MoCo Examining Intersection After Accident With Bethesda Elementary Student — County transportation officials are focusing on the intersection of Arlington Road and Edgemoor Lane, near Bethesda Elementary School, after a student-involved pedestrian collision there last week. The student wasn’t injured, according to police. There were few details on the nature of the collision. [Bethesda Patch]
Glen Echo Popcorn Gallery To Feature Pottery — From April 6 to May 5, Glen Echo Park’s Popcorn Gallery will feature “2013: From the Fire,” an exhibition of pottery work from Glen Echo art instructors and advanced students. The gallery (7300 MacArthur Blvd., Glen Echo) is open Saturdays and Sundays from noon to 6 p.m. and by special arrangement.
Flickr photo by ehpien
Montgomery County Executive Isiah Leggett (D) and County Council President Nancy Navarro (D-Mid-county) today testified in Annapolis in support of a bill that would raise the state’s gas tax to pay for transportation projects.
Both argued that the Washington suburbs of Montgomery County are an economic engine that directly affects the prosperity of the entire state. They said if projects such as the Purple Line light rail don’t get state money to match potential federal funding, that engine would suffer from traffic and gridlock.
“I know what some of you may bbe thinking — ‘please, feel free to invest your own money on State transportation projects. Your transit and failed intersection needs aren’t our problem,’” read Leggett’s testimony before the State Senate Budget and Taxation Committee. “I would argue that they are, particularly if the Washington region is going to continue to be depended upon to be a key economic engine and creator of jobs for the state. All of our new master plans require transportation investments. These plans, and the jobs they will create, can not move forward without this investment, which the state must partner in.”
The bill, proposed by Senate President Thomas Mike V. Miller (D-Calvert County), would raise the state’s gas tax for the first time in 21 years and includes a provision that would allow individual counties to collect up to 5 cents per gallon for local projects.
Opponents are against raising the tax because of already high gas prices and the because some don’t see the consequent transportation funding as benefitting their districts.
Navarro testified that the 3 percent gas tax hike proposed in Miller’s bill would not be sufficient to pay for all of the county’s transportation needs.
“We would support a fully phased in 6 percent sales tax on gasoline or a 1-cent increase on the state sales tax, which would both raise a more substantial level of revenue,” Navarro said.
Rendering via Maryland Transit Administration
County Council President Nancy Navarro (D-East County) today said a proposed gas tax hike from State Senate President Thomas V. Mike Miller (D) probably wouldn’t cover the entire cost of the Purple Line light rail, which would run from Prince George’s County to Bethesda.
“Presently it does not,” Navarro said at a weekly presser when asked if Miller’s proposal would cover the local cost associated with the projected $2.4 billion, 16-mile light rail project. Part of the cost would be picked up by the federal government. “I think we have to wait and see what will be the end result. We understand that obviously within it we will have these Regional Transportation Authorities. It’s too early to understand what the numbers will look like but we have been also very busy calculating exactly what would be the threshold and the way it looks right now is it would not be sufficient.”
Miller’s proposal includes a provision that would allow individual counties to collect up to 5 cents per gallon for local transportation projects. Gov. Martin O’Malley (D) has yet to weigh in on the bill. Raising the gas tax remains an unpopular idea statewide, especially in rural areas where leaders have argued they shouldn’t have to shoulder part of the cost for building transportation infrastructure in Montgomery County.
“I still believe that we have to do whatever we can to ensure that this is a statewide solution. I understand the concerns of the rural jurisdictions, but the bottom line is that Montgomery County is the economic engine of the state so if we benefit from this, so does the rest of the state. So do the rural areas,” Navarro said. “It is really important that we acknowledge that, that we understand, again, who we are in the state. Yes, the urban areas have grown dramatically, but that means more money to be distributed around the state. I’m very concerned about the creation of local transportation authorities because it creates this false impression that we can take care of all that, of this very large challenge.”
Last week, Navarro and Councilman Roger Berliner (D-Bethesda-Potomac) sent a letter to the Maryland Department of Transportation urging them to reconsider stopping all Purple Line design work if transportation funding is not provided in this year’s legislative session.
“It means that this is urgent,” Navarro said. “It means that if we don’t move forward with this particular piece then the risk would be our federal funding. And obviously it creates a sense of urgency for us when it comes to realizing this very important project for Montgomery County.”
Rendering via Maryland Transit Administration
County Executive Isiah Leggett (D) and County Council President Nancy Navarro (D-East County) today praised Maryland Senate President Thomas V. Mike Miller for his proposed gas tax hike that would help pay for transportation projects such as the Purple Line light rail.
But Leggett and Navarro were also careful when addressing whose responsibility it was to raise that revenue. Part of Miller’s plan would be a provision to allow individual counties to collect up to 5 cents per gallon for local projects.
While most Montgomery County lawmakers and a number of transportation advocates are in favor of raising the gas tax to help fund the Purple Line, it remains an unpopular political maneuver. According to a recent statewide poll, 73 percent oppose a 10 cents per gallon gas tax increase even though 56 percent think maintaining and improving Maryland’s transportation system is “very important.”
“We strongly believe that transportation funding is a state obligation that requires a state solution,” Leggett and Navarro said in a joint statement. “We support decisive statewide action by the General Assembly to increase revenue dedicated to transportation. As with any tax program, we hope the state will explore ways of minimizing the impact on lower income families.”
Rendering via Maryland Transit Administration
Berliner is one of many Montgomery County politicians who would like to see a state gas tax hike to help pay for projects such as the unfunded $2.1 billion Purple Line light rail system that would connect Bethesda and Chevy Chase with Silver Spring and east into Prince George’s County.
Arthur Guzzetti, vice president for police of the American Public Transit Association, told the committee there is no “cookie-cutter” strategy for funding major transportation projects.
“Whatever you can get the votes for is the way to go,” Guzzetti said.
Fairfax County made a $900 million contribution to the nearly $6.8 billion Silver Line by raising taxes on commercial properties that stand to benefit from the Metro’s extension to Dulles Airport, according to Metropolitan Washington Airports Authority’s Deborah Lipman.
The MWAA, which operates Dulles Airport, is a partner in the Silver Line project and used a passenger facility tax to fund the Silver Line station planned for the airport.
“Why aren’t we able to come up with these financing packages in what’s happening in Maryland,” asked Leventhal. “Part of the reason for that is obviously political.”
Based on the example of the Virginia HOT lanes, which are toll lanes paid for with an EZ Pass, Leventhal suggested widening the Beltway and I-270 and adding toll lanes to generate revenue for corresponding projects that would seek to take traffic off those roads.
Most decision makers in the county agree the Purple Line would help ease congestion on east to west routes such as the Beltway and a Bus Rapid Transit network could connect places such as downtown Bethesda with White Flint and Rockville.