MD legislators consider higher vehicle fees in 2011 tax package

MD legislators consider higher vehicle fees in 2011 tax package

[I]Net-of-trade in title tax not on the table[/I]

Maryland needs to raise $800 million more in annual transportation funding to shore up the state’s depleted Transportation Trust Fund, so a commission recommended last week that the general assembly consider raising vehicle registration fees, tolls and the gasoline tax to do it.

Sen. Rob Garagiola, a Montgomery County Democrat who is a member of the commission, has already introduced legislation to increase registration fees by 50 percent and the state’s gas tax by 10 cents. The bill does not, however, include any provision to eliminate the title tax, net-of-trade part of the law that legislators, in their wisdom, made part of the tax code several years ago. As might be expected there are voices in the legislature suggesting that elimination of net-of-trade on title tax should be on the table with other revenue raising proposals.

MADA, with the support of WANADA, is looking to ensure that the trade-difference tax credit remains part of Maryland law. In this connection, MADA recently submitted an Op-Ed piece touting the public benefits of the trade difference to the Maryland Gazette. Maryland residents expect to receive a trade-difference credit and any attempt by the legislature to eliminate the credit is nothing more than a tax increase, MADA says in the editorial.

Maryland transportation funding took a big hit during the Great Recession, as the state collected less sales tax revenue in general, as well as less in the way of gasoline and vehicle titling taxes. “We know that it’s going to take increases in several of these items in terms of fees and taxes to reach the numbers that we need to rebuild the Transportation Trust Fund,” said Gus Bauman, the commission’s chairman.

The gas tax in Maryland, which hasnt been raised since 1992, is now 23.5 cents. Garagiola said he believes this is the year to act. “Each year we wait, the hole in the Transportation Trust Fund gets deeper and deeper to dig out of,” Garagiola said after the commission’s meeting. “Better to take action now rather than wait, because we can’t afford to wait.”

Maryland has a $40 billion backlog in a variety of planned, unfunded road projects. A coalition of business leaders called the State Transportation Alliance to Restore the Trust also has been pushing to firm up commitment to transportation funding and a constitutional provision to protect it, in light of Washington-area commuters facing ever worsening gridlock.

A number of other measures have been introduced this session with implications for franchised auto dealers. These include a bill to allow temporary tags to be issued, even when customers have insurance violations (HB 1222). Accordingly, it will be the customer’s responsibility to pay these fines before a hard plate is issued. MADA is behind this, so long as it applies to new vehicle registrations, if the legislature votes to withhold permanent registrations for a resident’s failure to pay their state tax obligations.

HB 908, which seems like overkill, would prohibit dealers from failing to include processing charges or freight charges in calculating the base auto lease payment shown in an advertised lease.

SB 597 would prohibit OEMs from taking actions against a dealer because the dealer includes a specific web site address in advertising. It also prohibits OEMs from refusing to offer such a dealer promotional program benefits except under certain circumstances.

HB 1203 would regulate the fraudulent sale or installation of air bags. SB 177 would provide for a tax rebate of 20% of the cost of electric vehicle charging equipment. And, HB 434 would raise the small claim amount in court from $5,000 to $10,000 to facilitate the ability of small businesses to afford defending de minimis and/or frivolous lawsuits.

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