Arundel council approves bill cutting property taxes on R&D equipment

November 19, 1996|By Scott Wilson | Scott Wilson,SUN STAFF

Anne Arundel County became the third Maryland subdivision last night to eliminate property taxes on equipment used for research and development, primarily computer hardware and software.

By a 7-0 vote, the County Council approved the legislation that is backed by the Gary administration as a way for Anne Arundel to attract and retain coveted high-tech business.

County Executive John G. Gary, a Republican, is expected to sign the bill within days.

"This establishes us in a leadership position at a modest cost," said Michael S. Lofton, chief executive officer of Anne Arundel Economic Development Corp. "The challenge now is to turn this advantage into investment."

The legislation would save research companies in the county an estimated $2.2 million in taxes over the next five years.

But before last night's vote, the county auditor's office warned that the bill, which relies on a supply-side strategy of cutting taxes to raise revenue, could increase the tax burden on homeowners if it fails to generate more revenue.

Anne Arundel joined Carroll and Worcester as the only other Maryland counties to eliminate property taxes on research and development equipment.

The tax exemption could cost Anne Arundel an average of almost $500,000 in tax revenue annually over the next five years, according to administration estimates.

Pub Date: 11/19/96

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