On the Record

This morning I visited the Southwest Senior Center in West Baltimore. It was the site of a free financial clinic hosted by the Baltimore CASH Campaign, an outreach group that’s comprised of nonprofits, community-based organizations and city agencies.

This past Monday, Comptroller Peter Franchot and Congressman John Sarbanes launched the CASH campaign’s effort to help underprivileged people apply for economic stimulus payments.

Altogether, 36,000 eligible residents from Baltimore city and county (many of whom are senior citizens or are disabled) have not filed a tax return and therefore have not received a stimulus payment.

Before I arrived at the senior center — which is one of three sites set up for free clinics — I envisioned the tax return process to take at least half an hour. But with a tax professional on hand, the applicants were out the door after five minutes.

About 50 people have come to the free clinics so far, according to Pam Cheney, the Director of the UMD Law School Tax Clinic.

Cheney said media exposure and word on the streets should increase awareness and draw an even bigger turnout to the clinics planned for September.

The deadline to file for a stimulus check is October 15th and the payments are worth a minimum of $300 per person.

RICHARD SIMON, Multimedia Reporter

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Guess what could be waiting for you at home?

Your latest Maryland property assessment, and be prepared: it’s not going to reflect the slowdown in the real estate market.

The assessments will arrive this week at homes and businesses, and the average one is rising 33 percent over three years ago.

It’s an average 75 percent increase in Baltimore and nearly 52 percent increase in PG County. MoCo had the smallest increase on average: about 16 percent. The jumps reflect the overall increase in the market in the past three years.

There is one silver lining: the Homestead Property Tax Credit, which limits tax increases on homeowners’ primary residences to no more than 10 percent per year. And it’s a one-time application.

JACKIE SAUTER, Multimedia Editor

The Maryland General Assembly’s special session last month cost taxpayers $360,873 (not including, of course, the tax hikes that resulted from it). That’s an average of slightly more than $17,000 per day for the three-week session.

JACKIE SAUTER, Multimedia Editor

So who here knew that a health care expansion bill snuck through at the last second of the special session? It was not one of the highest-profile issues of the marathon, three-week legislative blitz overshadowed by the slot machine debate and measures to raise $1.4 billion in new revenue.

But it could be important for small business. Legislative analysts wrote that a plan to subsidize employee health coverage for small businesses could help add 15,000 people to the rolls of the state’s insured, with a price tag around $30 million.

The coverage isn’t for everyone - just businesses with between 2 and 9 employees that want to offer insurance with “wellness” options like health club membership assistance. And the source of the money is not necessary solidified forever. It could change within a few years.

Will this affect your business? If it doesn’t, do you think you’re being unfairly left out? Or is this a good start on helping small businesses keep their workers healthy?

I’m working on a story about this for Friday. Want to get in on it? Call me at (443) 524-8175.

-ANDY ROSEN, Business Writer

As of Monday morning, legislators agreed to levy a 6% tax rate on “computer support services, data center support, custom programming, consulting and disaster recovery services.”

I know, that’s not news to you.

What is, is this: the state’s IT industry (along with small local businesses and workers) is angrily asking, “What gives?”

After all, “The IT industry is … helping to maintain the competitiveness of Maryland’s businesses.” So says Roger Cochetti, a director at the Computing Technology Industry Association.

Roger keeps going, telling InformationWeek:

“Just at the time that most cities, states, provinces, and countries around the world are encouraging the computer industry to locate there, the Maryland Assembly and Governor chose to discourage the computer industry from locating and providing services in the ‘Free State,” he said.

Cochetti said the tax could encourage Maryland IT users to outsource computer services…. He called the move one of the “least informed and most harmful actions ever undertaken by the Maryland State government.”

Do you think that more companies will keep IT in-house to avoid paying these taxes to local outside vendors? Or outsource operations? Would you?

-JACKIE SAUTER, Multimedia Editor

When reporter Andy Rosen was preparing for the weekend ahead on Friday, no doubt he knew it would be a long one.

And it was.

From Annapolis, he filed updates from the Special Session for the web on Saturday and Sunday; an updated story, which he filed at 2:45a.m. this morning, was posted to our Web site today.

The conclusion of the marathon session? Lawmakers agreed to raise $1.4 billion in new taxes, including sales tax expansion, a rise in the corporate income tax, and increased personal income taxes for the wealthy.

Reactions?

-JACKIE SAUTER, Multimedia Editor

According to the Internal Revenue Service, there are 115,478 people out there who are due tax refund checks. The missing checks were ones returned to the IRS as undeliverable.

The IRS says the average check is $953 and a claim can be filed online or over the phone after you update your address.

Follow the link to the IRS Web site and check for yourself.

To update your address you will need to give them your Social Security number, how you filed (married filing jointly, single, etc…) and the exact refund amount from the tax return. You can also call 1-800-829-1040.

-BEN MOOK, Assistant Business Editor

They’re all the new targets of the sales tax increase.

Reporter Andy Rosen writes today:

The Senate Budget and Taxation Committee tossed aside the governor’s proposed extension of the sales tax to cover massage, health club and property management services. In the face of stiff opposition from those interests, the panel instead voted to tax computer services, landscaping and arcades.

Looks like those gym petitions added up.

But why choose these three?

And how much money can there be in arcades these days?

*Update 4:40p.m.* It’s come to my attention that the Comptroller’s office will decide which businesses are classified as “arcades.” Does this make Peter Franchot the Arcade Czar?

-JACKIE SAUTER, Multimedia Editor

The services which are proposed additions to the sales tax are on file in the Governor’s bills in the House and Senate, and some Marylanders disagree with the selections.

They are:
-Real property management service
-Tanning, massage, physical fitness, sauna, or steam bath facility

The AP reports that real estate agents and health club owners rallied Thursday against the bills.

Real estate agents argue that the tax shouldn’t be applied to them, because housing is a basic commodity like food … Opponents of broadening the sales tax to include fitness clubs followed the real estate agents with a State House protest. They chanted “no health tax,” and asked why O’Malley wanted to tax people who want a place to exercise.

It’ll be interesting to see who else comes out of the woodwork when hearings begin on the pair of competing House bills.

House Bill 18 puts forth tattoo artists and body piercers as potential tax revenue. House Bill 11 would add a laundry list of services, including pay-per-view TV, car washes, escort services and cobblers.

What do you think should be on the list?

-JACKIE SAUTER, Multimedia Editor

The U.S. Congress is doing its best to do nothing with the alternative minimum tax (AMT) yet again. It seems the tax that was intended to affect only a certain higher-income tax bracket will hit a larger swath of taxpayers than it did last year. What’s the reason? No adjustment for inflation.

Is there a reason for not having this adjustment that a regular accounting-impaired individual like myself could understand? Better yet, does anyone think the AMT will ever simply do what it was intended to do?

Of course, our representatives and senators have known all year long that this had to be dealt with, yet it’s still on the books with no real resolution. So, now the IRS is only a few weeks away from having its paperwork and software ready for this upcoming tax year, and our lawmakers’ inaction or action will have serious consequences.

Either more income-earners fall under the AMT than last tax year, or the whole filing process is delayed from the get-go (due to new forms and software required to deal with congressional changes) if Congress does the unexpected — and does something.

-FRANCIS SMITH, Special Publications Assistant Editor