Cost of driving, smoking just went up New state taxes, Phase 1, took effect yesterday.

May 01, 1992|By John W. Frece | John W. Frece,Annapolis Bureau

ANNAPOLIS — In yesterday's editions, The Sun incorrectly reported the effective date of new state sales taxes on snack foods; on salads, sandwiches or other prepared foods sold in grocery stores; on credit reporting services; and on home and business security services.

Sales taxes on these items will take effect June 1.

The Sun regrets the error.

ANNAPOLIS -- Did you fill up your car with gas yesterday, or go out and buy a carton of smokes? If you didn't, maybe you should have. Both will cost you more now.

The first phase of a tax package worth nearly a half-billion dollars, approved by the General Assembly three weeks ago, takes effect today.

FOR THE RECORD - CORRECTION

It's complicated. So complicated, in fact, that Gov. William Donald Schaefer had trouble explaining when everything would take effect to callers on his regular weekly talk show yesterday.

"Any time you have a change, any change at all, there's uncertainty," Mr. Schaefer said.

Here are some examples of what will happen today:

Ten gallons of gasoline that you might have bought yesterday for will now cost you $11.40. That's a nickel more a gallon.

That carton of cigarettes that sold for $16.50 yesterday will probably be marked up to $18.50 today, reflect ing a 20-cent-a-pack increase.

And that's not all.

If you bought this newspaper over the counter, for the first time you paid a sales tax on it.

Have a fat dog or fat cat that needs diet pet food? Add the 5 percent sales tax to that as well.

If you visit someone in the hospital and stop by the cafeteria for lunch, the food there also will be 5 percent more expensive today.

Likewise, if you sample the food at your son's or daughter's college cafeteria. Previously, those meals were exempt.

The 5 percent sales tax also goes on your car-phone bill, any custom-calling features on your home or business telephone, the 900 call you make to Rent-a-Fantasy, or the pay-per-view movie you order at home.

The higher taxes are the result of a controversial budget-balancing measure that deadlocked the General Assembly and forced it into a four-day extended session for the first time this century.

Phase Two, which takes effect July 1, includes sales taxes on snack foods; on salads, sandwiches or other prepared foods sold in grocery stores; on credit reporting services; and on home and business security services.

Telephones at Comptroller Louis L. Goldstein's office have been ringing off the hook with calls from Marylanders wondering whether they're affected, and if so, what they have to do and when.

Marvin Bond, a spokesman for the comptroller, said there have been as many as 1,100 calls a day.

A lot of them are from barbers, beauticians, dry cleaners and others whose services at one time or another the legislature considered taxing, Mr. Bond said. Ultimately, they were spared.

The comptroller's office has mailed out 120,000 information packets to everyone currently on the state's sales-tax vendor list.

The office also took advantage of the all-inclusive mailing to issue new sales tax licenses.

Some licenses had not been updated with address changes or other information since the original sales tax became law in 1947, Mr. Bond said.

They include newspapers, security services, veterinarians, cellular telephone dealers, and so on.

"There are a lot of people out there who need [sales tax] licenses who haven't gotten them yet," Mr. Bond said. "One big category has to be [those who perform] building cleaning, or janitorial services. They're not easy to find. A lot of them are small contractors and, by nature, when they work and who they employ, they're not easy to find."

The sales tax will apply to janitorial services beginning July 1.

The sales tax on The Evening Sun and The Sun will be added to the price of papers bought over the counter and to the home delivery price.

The tax on sales from vending machines will not take effect until Jan. 1, 1993.

Mr. Schaefer yesterday praised legislators who voted for the tax increase, calling them "courageous," and called those who still suggest the state's budget has not been reduced "demagogues." He also criticized John D. O'Neill, the leader of a Maryland anti-tax group, for saying the Maryland Taxpayers' Association intends to target for defeat lawmakers who voted to raise taxes.

Instead, Mr. Schaefer said he'd "like to see the list of those who voted against education, who voted against the environment, who voted against school construction. The way that [targeting lTC lawmakers who voted for higher taxes] is being done is, in my opinion, unfair."

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