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Special Session Ends With New Tax Laws, Slots Referendum

The 2007 Special Session of the Maryland General Assembly has concluded. Our Government Relations Practice Group team, Bob Enten, Tim Perry and Michael Powell, worked hard and long for the entire three week session. The General Assembly passed legislation approving a slots referendum to be voted on by Maryland voters in November 2008. It also passed tax reform, health insurance and transportation laws. These bills were signed into law on November 19, 2007 by Governor Martin O'Malley. 

Briefly, the tax bills (SB 2 and HB 5) include:

 •  Increasing the corporate tax rate from 7% to 8.25%, effective for tax years beginning after
  December 31, 2007;
 •  Adjusting individual tax rates and exemptions;
 •  Increasing the sales tax from 5% to 6%, effective January 3, 2008;
 •  Expanding the sales tax to include "computer services," effective July 1, 2008;
 •  Providing for a study of corporate taxes with extensive reporting requirements;
 •  Capping the vendor credit allowance at $500 per month, effective January 3, 2008;
 •  Imposing recordation and transfer taxes on transfers of controlling interests in real property, effective July 1, 2008;
 •  Increasing vehicle excise tax from 5% to 6%;
 •  Establishing tax free holidays for energy efficient appliances and clothing;
 •  Increasing the tobacco tax from $1 to $2 per pack, effective January 1, 2008; and
 •  Creating the Chesapeake Bay 2010 Trust Fund.

SB 6, the healthcare bill, expands Medicaid and establishes a Small Employer Health Benefit Plan Premium Subsidy Program. SB 3 and HB 5 contain the details on slots and the slots referendum. HB 1 contains proposed budget cuts and transfers of funds.

If you have questions about the new legislation, please call or e-mail a member of our Government Relations Practice Group:

D. Robert Enten410-576-4114denten@gfrlaw.com
C. Edward Hitchcock410-576-4053chitchcock@gfrlaw.com
Michael C. Powell410-576-4175mpowell@gfrlaw.com
Timothy A. Perry410-576-4227 tperry@gfrlaw.com
Todd R. Chason 410-576-4069tchason@gfrlaw.com