Trickle-Down Taxation: Maryland Residents Facing 'Rain Tax'

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In 1965, disgusted by what he viewed as confiscatory taxation by the British authorities -- a supertax instituted by the Labor government was taking 95 percent of top earners' income -- George Harrison wrote a bitter song from the perspective of a maniacal tax collector:

​​If you drive a car, I'll tax the street,
If you try to sit, I'll tax your seat.
If you get too cold I'll tax the heat,
If you take a walk, I'll tax your feet.


But even Harrison's "Taxman" never conceived of a levy on the weather, something currently being instituted in Maryland.

Some background: The Chesapeake Bay faces a serious pollution problem. The Environmental Protection Agency decreed in 2010 that Maryland had to stop so much stormwater runoff from draining into the Bay, a project that would cost $14.8 billion. To pay for that, authorities decided to tax "impervious surfaces" -- in the words of The Gazette, "anything that prevents rainwater from seeping into the earth (roofs, driveways, patios, sidewalks, etc.) thereby causing stormwater runoff."

This solution is being called -- with the combined goodwill these two concepts evoke -- a rain tax.

Faced with the EPA's orders, the state has required its 10 largest counties -- Montgomery, Prince George's, Howard, Anne Arundel, Carroll, Harford, Charles, Frederick, Baltimore counties and Baltimore city -- to raise the revenue. Rain taxes are to take effect in these areas by July 1.

Perhaps even more disturbing than the duty itself is the manner in which property owners' obligations will be calculated: According to the Gazette, "satellite imagery and geographic information systems" will be used to measure the area of roofs and driveways.

Homeowners will bear the brunt of the rain tax: of the $14.8 billion to be raised -- $482 million each year until 2025 -- about three-quarters will come from residential property owners. The rate is expected to start at $100 a year for most homeowners, although that could rise. The only rain tax shelter: credits and exemptions for property owners who follow stormwater "best practices."

How the money will be spent is another murky situation; for the full details, head over to The Gazette.

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Trickle-Down Taxation: Maryland Residents Facing 'Rain Tax'

The Centennial State eliminated the tax exemption for non-essential food items and packaging that can come with your food or beverage purchased at your local eatery or convenience store. Sales and purchases of nonessential food items and packaging provided with purchased food and beverage items are taxable at the state sales and use tax rate of 2.9%.

So while cups are considered essential, cup lids are not and, hence, are taxable. French fry sleeves are not taxable but expect to pay sales tax on napkins and towelettes.

When Halloween comes around, Indiana residents may be better off buying a pre-made costume. Indiana's Department of Revenue decided that sales tax could be applied to labor and design of custom-made costumes due to existing law about "retail unitary transactions." In other words, a combined sale of tangible personal property and services becomes taxable when the services are performed before the transfer of the property.
Under federal statutes, state or local governments can't taxes airlines and airport users. But in Kansas, taxes can be imposed on "any place providing amusement, entertainment or recreation services."  The state's Department of Revenue concluded that the sales tax could be applied to tethered hot air balloon rides only.
A sweet tooth in the Bluegrass State can get expensive. Candy that does not contain flour faces a sales tax, while candy with flour is exempt. Hence, residents hankering for chocolate-covered almonds will pay a little more than those buying chocolate covered pretzels.

After an uproar about how non-residents could buy boats and repair parts tax-free if they moved their boats out of state within 30 days of purchase and kept them out, Augusta lawmakers amended the law.

Non-residents have to pay 40% of the sales tax if they brought their boats back into the state or kept them in Maine for more than 30 days. Residents, however, remain out of luck: they must pay the full sales tax on the sticker price of the boat and repair parts.

For many families, a haunted house visit during Halloween is a tradition. But beware: The Empire State requires visitors to pay a sales tax in order to be spooked.
Ask a New Yorker what are the best bagels in the city and you'll get some impassioned answers. Just be careful where you eat it. Once a bagel shop staff slices that bagel, it's considered prepared food even if you don't ask for a schmear of cream cheese and is subject to sales tax. As a result, bagel lovers can end up paying some 8-to 9-cents extra per bagel.
Fashionable Texans are paying more for certain items of clothing these days. Buy a belt and it's tax-free. But shop for a belt buckle and expect to pay a sales tax. Cowboy boots and hiking boots are exempt, but rubber boots and climbing boots are taxable.
Before October 2009, ice cream cakes were taxable only when sold for consumption at the store or ice cream shop. Once the state became a member of Streamlined Sales and Use Tax Agreement, ice cream cakes and bars in which the retailer mixes ice cream and at least one other food item together becomes "prepared food" and is taxed. Yet, if it is made by someone other than the retailer, it's not taxable unless it is considered a prepared food because, for example, it came with utensils or napkins.

In the 1960s Washington added a retail sales tax that would be charged at any business that offers customers the "opportunity" to dance. According to ABC News, many Washington businesses complain of arbitrary enforcement of the statute. The state legislature is considering a repeal.

Proponents of the repeal say enforcement targets medium-sized venues or taverns, and not places like sports stadiums that often host concerts where people dance. Recently, Century Ballroom in Seattle and was hit with $250,000 bill on back taxes for not adhering to the law.
 

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