Retail group opposes plan to expand, raise sales tax


ANNAPOLIS -- The Maryland Retail Merchants Association became yesterday the latest business group to speak out on a controversial tax package that, among other things, would expand and raise the state sales tax.

Not surprisingly, the group found no merit in that aspect of the package, named the Linowes report after its chairman, Montgomery County lawyer R. Robert Linowes. The report, which the Schaefer administration has decided to send to the General Assembly, would raise about $800 million in new taxes to help poorer jurisdictions around the state, as well as raise money for education and transportation.

"Of particular concern to retailers is the recommendation for a 10 percent increase in the sales tax [from 5 percent to 5.5 percent]," the association stated. The Linowes commission also suggested expanding the sales tax to include dozens of service industries not currently taxed.

"With the weakest retail sales performance in a decade and consumer confidence at its lowest mark since 1980, a 10 percent increase will have a severe negative effect on sales and further depress Maryland's economy," the association said.

Because the entire Linowes package, officially known as the report of the Maryland Commission on State Taxes and Tax Structure, is so widespread and complex, the retail merchants said, "the Association recommends that the General Assembly create a special joint fiscal committee this session and for this committee to use the commission's report as a starting point to develop a broad political consensus" to pass legislation next year.

The merchants joined the Maryland Chamber of Commerce in opposing the Linowes package. Only the Greater Baltimore Committee, among major business groups, has come out in favor of the proposals. The package would provide Baltimore with the most new tax revenues of all the state's jurisdictions.

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