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Wicomico County Looks To Phase Out Inventory Tax
SALIBSURY – The Wicomico County Council is weighing whether to eliminate its inventory tax with a public hearing planned for next month on the effort.
On Tuesday, the Wicomico County Council voted unanimously to introduce a legislative bill that will amend a chapter within the County Code regarding taxation and the “percentage of assessed value changed” to reduce the percentage of the assessed value of commercial inventory subject to county property tax from 35 percent to zero phased over a five-year period.
According to the legislation, Wicomico County is the only county in the State of Maryland that taxes the value of business inventory.
Finance Director Andy Mackel explained businesses that require inventory to operate view the tax as a negative factor when choosing among alternative locations on the Eastern Shore to operate. By eliminating the tax, it is expected that the county will improve its competitive position relative to other counties and thereby attract new business and encourage existing businesses to expand operation within the county.
County Executive Rick Pollitt is in support of the amendment and has determined that the continued imposition of a tax on commercial inventory is an impediment to the economic development of Wicomico County.
The elimination of inventory tax would create an immediate loss of $1.7 million in the county’s revenue. The other alternative is to phase in 100 percent inventory exemption over five years.
The legislation proposes to eliminate the tax by reducing the current percentage of the total assessed value subject to tax by 7 percent per year, resulting in the total elimination effective July 1, 2017.
“It is important for the public to understand that we have a tremendous competitive location here within the transportation network, we have Route 13, we have Route 50, we have rail and an airport, we are a fantastic location for distribution facilities but they are not going to look here as long as we have an inventory tax,” Director of Administration Wayne Strausburg said.
Councilman Joe Holloway said the council has been discussing making the move to eliminate the inventory tax the entire time he has sat on council for the past six years and now is the time to move forward.
Councilwoman Stevie Prettyman agreed adding the amendment would show the business committee that Wicomico County is committed to business growth.
“I am very much in favor of something like this for the business people of Wicomico County,” Council Vice President Bob Culver said. “It is time that we start showing that we are business friendly.”
A work session will be held to discuss the matter at the next scheduled County Council meeting, and a public hearing and adoption is aimed to be held by March 5.
The inventory tax is a subset of Personal Property Base called Trader’s License. In Wicomico County, 65 percent of value is exempt and 35 percent of value is taxed. Taxes billed during fiscal year 2013 will be for business tax returns filed in calendar year 2011, and inventory held during calendar year 2013 will be tamed at the rate levied by fiscal year 2015. Inventory tax bills are prepared throughout the year as the assessment data is provided by the state.