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Maryland REALTORS helped defeat proposed taxes

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Would it surprise you to learn that some tax increases proposed by Martin O’Malley failed to pass during the recent Special Legislative Session?  Although the 20% sales tax increase, from 5% to 6%, did pass – along with the return of slot machines to Maryland for the first time since 1968 – some of O’Malley’s proposals were successfully blocked.

You can thank the very effective Maryland Association of Realtors (MAR) for their leadership in helping to defeat the following proposed taxes, which would have impacted you, the consumer:

 1.  TAX ON SERVICES:  The proposed tax on real estate property management services was removed from the final bill.  This is considered a huge victory because the tax was seen as a “trial balloon” for a far-reaching tax-on-services bill, ultimately taxing consumers on ALL real estate commissions and fees. 

2.  GREEN FUND:  Real estate was removed as a funding source for the Chesapeake Bay 2010 Trust Fund, which would have imposed an annual fee on residential and commercial property.  Instead, the General Assembly approved general fund appropriations, and dedicated revenue from the motor fuel tax and rental car tax as the funding sources.

3.  MARYLAND RESIDENT REAL ESTATE WITHHOLDING TAX:  MAR successfully opposed legislation before the Senate Budget and Taxation Committee that would have created a Maryland Resident Real Estate Withholding Tax, subjecting all Maryland residents to a 4.75% withholding tax when net proceeds from the sale of real estate exceed $250,000 or $500,000, based on the seller’s tax filing status.

4.  CHANGE OR RESIDENCY FROM 6 MONTHS TO 3 MONTHS:  A bill introduced in the Senate would have required a nonresident of Maryland to file Maryland taxes if that person resided in Maryland for more than 3 months (in order to capture revenue from “snow-birds” who live in low-tax states like Florida most of the year, and own Maryland property).  The House did not include a similar provision in its version of the Tax Reform Act, and the provision was removed from the final bill.

5.  CONTROLLING INTERESTS:  The Tax Reform Act did include “controlling interests” legislation which levies real estate recordation and transfer taxes on the transfer of a “controlling interest” in a real property.  However, an amendment supported by MAR delayed the effective date until July 1, 2008 – after the regular legislative session, January-April,  Hopefully, this will be overturned then.

Realtor LogoCongratulations to members of the Maryland Association of REALTORS® (MAR), who worked tirelessly for months to block these proposals through a state-wide media campaign, personal contacts through email and mail, personal meetings with Legislators, the Governor and the Comptroller, and a protest against these proposals by hundreds of Realtors in Annapolis on November 1.

Information provided by Maryland Association of REALTORS, with some editorial comments from me.  For a recent tongue-in-cheek post about Maryland’s craziest laws, CLICK HERE.

Copyright 2007.  All rights reserved.  Margaret Woda

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