Maryland House Approves Sales Tax on Gas
- Sales Tax News
- Mar 25, 2013 | Gail Cole
UPDATE, 5.20.2013: The Transportation Infrastructure Investment Act of 2013 was approved by Governor Martin O'Malley (D) on May 16, 2013. It takes effect on July 1, 2013.
Last week, the Maryland House of Delegates approved Governor Martin O’Malley’s Transportation Infrastructure Investment Act of 2013 in a 78 to 56 vote. The bill now moves to the Senate, where the governor hopes it will be quickly passed.
Under the act, a new tax of 3% would be gradually added to sales of gasoline. “[T]he percentage rate used to calculate the sales and use tax equivalent rate shall be:
(1) 1% for the determination made on June 1, 2013 (effective July 1, 2013)
(2) 2% for the determination made on December 1, 2014 (effective January 1, 2015); and
(3) 3% for the determination made on June 1, 2015 (effective July 1, 2015), and June 1 of each subsequent year.” (Section F, 1-3).
Gasoline in Maryland has been subject to a 23.5-cent per gallon flat tax since 1992. The legislation under consideration would automatically raise that tax “each year based on inflation .” (The Washington Post).
In a press release regarding the bill, Governor O’Malley (D) said, “The investment plan the House passed today is balanced, fiscally responsible and will support 44,000 jobs over the next five years.” According to The Washington Post, legislative analysts predict that “motorists could expect to pay roughly an additional 13 to 20 cents a gallon of gas by mid-2016. … The higher gas taxes would be phased in over several years, with the first increase of about 4 cents a gallon coming in July.”
The Transportation Investment Act of 2013 is expected to “yield $4.4 billion for roads and mass-transit projects over the next six years….” Without that additional revenue, current projections predict that “after 2017, Maryland will have only enough revenue for maintenance of its existing transportation network and not for new highway construction or planned mass-transit projects….”
As the vote indicates, support for the measure was not universal. While House Majority Leader Kumar P. Barve (D-Montgomery) said the gas tax was “a reasonable price to pay to spend less time on the road,” Luiz R.S.Simmons (D-Montgomery) called the gas tax “an egregiously regressive tax.”
Senate Majority Leader Robert J. Garagiola (D-Montgomery) predicts the Senate will “make some changes to the transportation bill,” but “he is confident the House and Senate can work out” their differences. (The Washington Post).
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