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Tax-relief package clears Maryland House committee Tax-relief package clears Maryland House committee
(about 1 hour later)
Maryland’s House Ways and Means Committee on Friday approved legislation that would expand tax credits for the working poor and reduce taxes for individuals and many businesses, setting up a likely floor vote on the package in coming days. Maryland’s House Ways and Means Committee approved legislation Friday that would expand tax credits for the working poor and reduce taxes for individuals and many businesses, setting up a likely floor vote on the package in coming days.
The bill was an amended version of a measure the Senate passed overwhelmingly last month. It would reduce state revenues by an estimated $201 million, while the Senate plan would mean $227 million less for state coffers, according to lawmakers on the panel. The bill was an amended version of a measure the Senate passed overwhelmingly last month. It would reduce state revenue by an estimated $201 million, while the Senate plan would mean $227 million less for state coffers, according to lawmakers on the panel.
If the House passes its version of the bill, the two chambers would have to reconcile the differences between the approved versions before sending the package to Republican Gov. Larry Hogan, who has expressed support for the Senate plan. If the House passes its version of the bill, the two chambers would have to reconcile the differences between the approved versions before sending the package to Republican Gov. Larry Hogan, who has expressed support for the Senate plan. The 2016 legislative session ends Monday, giving lawmakers just three more calendar days to move the legislation out of the House and negotiate a final agreement.
[Senate panel advances Md. tax-relief plan][Senate panel advances Md. tax-relief plan]
The House and Senate bills would both expand eligibility for the Earned Income Tax Credit that helps the working poor, extending the benefit to low-income taxpayers who are age 18 and older. The House and Senate bills would both expand eligibility for the Earned Income Tax Credit that helps the working poor, extending the benefit to low-income taxpayers who are 18 and older.
Under current law, the tax credit only applies to low-income individuals with children.Under current law, the tax credit only applies to low-income individuals with children.
The House committee rejected a provision from the Senate bill that would reduce taxes for households earning more than $150,000, instead approving a modest rate reduction that would allow individual filers to save $100 on their first $100,000 of income while joint filers would save $150 on their first $150,000.The House committee rejected a provision from the Senate bill that would reduce taxes for households earning more than $150,000, instead approving a modest rate reduction that would allow individual filers to save $100 on their first $100,000 of income while joint filers would save $150 on their first $150,000.
“If we’re giving tax cuts, we should give it to people who actually need it, like the middle class,” said Del. Eric G. Luedtke (D-Montgomery), a member of the committee.“If we’re giving tax cuts, we should give it to people who actually need it, like the middle class,” said Del. Eric G. Luedtke (D-Montgomery), a member of the committee.
The House also amended the Senate bill to include a provision that would allow multi-state corporations to base their tax rates on sales in Maryland rather than a combination of sales, property and payroll in the state. The Senate bill would provide relief for middle-income taxpayers as well, slightly increasing their income-tax exemption from $3,200 to $3,400 over four years.
The House amended the Senate bill to include a provision that would allow multi-state corporations to base their tax rates on sales in Maryland rather than a combination of sales, property and payroll in the state.
[Tax relief for Maryland businesses turns out to be not so simple[Tax relief for Maryland businesses turns out to be not so simple
Supporters of the policy say it would benefit companies to move to Maryland or remain in the state, since many would face a lower tax burden under the so-called single-sales method. But some Republicans have raised concerns about how the change would impact other businesses.Supporters of the policy say it would benefit companies to move to Maryland or remain in the state, since many would face a lower tax burden under the so-called single-sales method. But some Republicans have raised concerns about how the change would impact other businesses.
Del. Jason C. Buckel (R-Allegany) said he voted reluctantly for the bill despite opposing the single-sales provision. “I do appreciate the committee’s work putting in a middle-class tax break, which I think is a great thing and something I’m very supportive of, and hometown heroes, which I’m very supportive of.”Del. Jason C. Buckel (R-Allegany) said he voted reluctantly for the bill despite opposing the single-sales provision. “I do appreciate the committee’s work putting in a middle-class tax break, which I think is a great thing and something I’m very supportive of, and hometown heroes, which I’m very supportive of.”