Assembly weighs tax on videos Bill would allow cities to enact 5% amusement levy

Protest planned tomorrow

Municipal League, counties support new revenue source

March 12, 1997|By Ivan Penn | Ivan Penn,SUN STAFF

Baltimore and other cities in Maryland could impose a 5 percent amusement tax on videotape and game cartridge rentals under legislation being considered in Annapolis.

Supporters of the measure say they are willing to extend the taxing authority to any interested counties, as well.

But the proposal, before the state Senate, is drawing strong opposition from video dealers and prompting a bit of rebellion.

Opponents plan to protest the proposed tax tomorrow by throwing videotapes off the Annapolis City Dock -- into a net so as not to endanger the environment -- in hopes that lawmakers will kill the legislation.

"It's a modern Boston Tea Party," said Stephen Schwartz, president of the Metro Washington Chapter of the Video Software Dealers Association, which represents video stores throughout Maryland.

"Neither businesses nor consumers want this tax," said Schwartz, who says he has 16,000 signatures on a petition opposing the tax. "The consumers are really going to end up paying for this."

Even so, the Maryland Municipal League and the Maryland Association of Counties (MACO) support the bill, saying it is reasonable because tickets to movie theaters and sporting events are subject to such a tax.

"The video market has significantly cut into movie sales," said Kristen Mark Hughes, associate director of MACO. "We're just trying to make an even playing field here in terms of taxes."

Mayor Kurt L. Schmoke's administration also likes the idea and has put its support behind the tax. In written testimony to lawmakers, Henry W. Bogdan, executive director of the mayor's state relations office, said the tax could generate as much as $490,000 a year for the city.

Bogdan said city officials have not decided whether to take action to impose the tax if the General Assembly gives them that authority. "Every year we have to look at all possible revenue sources, but there's no consensus on this," he said.

The cities of New Carrollton and Takoma Park also support the measure to help bolster their revenues.

The state bill is only enabling legislation, which means that local governments would have to pass their own law before the tax could be levied.

If all cities and counties imposed a 5 percent amusement tax on videotape and game cartridge rentals, local revenues would increase by an estimated $7.4 million next year. If passed, the law would take effect July 1.

The bill was amended in committee to allow only cities to levy the tax, but key lawmakers said they are willing to amend it on the Senate floor to include any counties that want the authority.

Similar legislation was proposed in 1995, but was not passed, said Sen. Barbara A. Hoffman, a Baltimore Democrat and lead sponsor of the bill. Gov. Parris N. Glendening has not taken a position on the issue.

Schwartz, speaking for video stores, said the bill would deal a blow to small video businesses that would be forced to increase their prices, causing them to lose customers.

"I understand that movie theaters already have this tax," Schwartz said. "But I don't know how people can compare Sony theaters, the Orioles or a Bruce Springsteen concert with the corner video store. This could break the corner store."

Pub Date: 3/12/97

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