by Brian Mahany
While serving as Maine’s state revenue commissioner in the 90’s I had to deal with hospital taxes (the so called “sick tax”) and taxes on snack food (often called the Girl Scout cookie tax). Lobbyists can get pretty creative with labels, usually in an effort to defeat a tax proposal or at least rile up the general public. Maryland’s rain tax is the next line of creative ways to raise money for government projects.
The State of Maryland is under a mandate from the federal Environmental Protection Administration to stop rain water from polluting the Chesapeake Bay. It’s not so much the rainwater but the pollutants picked up along the way. The cost to abate the pollution problem has been pegged at $14.8 billion. How does cash strapped Maryland propose to raise that money? Through a “rain tax” of course.
Politicians haven’t figured out how to tax Mother Nature yet. (Although there is probably more than one politician who has thought about it.) Instead, lawmakers are debating a tax on impervious surfaces. The theory holds that the more land is paved, the more runoff is generated.
Roofs, driveways and decks all will be taxed based on square footage. Adding that nice patio behind your house will increase your property tax and now also generate a rain tax. Unless of course your patio is made of grass or gravel. The biggest culprits of course are parking lots and strip malls. Raising taxes on those facilities ultimately means higher prices for consumers.
We are not opposed to cleaning up pollution, but we do think that politicians should be transparent in how they raise money. If it truly costs $15 billion to clean up the bay, hiding the cost by taxing strip malls and ultimately raising prices isn’t very transparent. If goods get too costly, consumers will simply drive out of state to do their shopping. Think about car lots and the new taxes they will pay.
We also question whether the money will really be spent to clean up the Bay. Although some of the money raised will go to wetland restoration and runoff mitigation, the money can also be used for “monitoring, inspection, enforcement, review of stormwater management plans and permit applications, mapping of impervious surfaces… and public education and outreach.” In other words, the state can use the money to hire more bureaucrats.
The new law exempts government buildings from the tax but churches will have to pay. Think about it, churches tend to have big roofs and big parking lots.
The tax lawyers at Mahany & Ertl help businesses with a wide variety of state and local tax issues. Founder Brian Mahany served as head of Maine’s Revenue Services department and as an officer of the Multi State Tax Commission. Brian served on a number of legislative task forces aimed at lowering tax burden instead of figuring out new ways to tax the public.
If you are the subject of an audit, assessment or need assistance with a state or federal tax appeal, give us a call.
For more information, contact attorney Bethany Kroes at or by telephone at (414) 223-0464 (direct). All inquiries are protected by the attorney – client privilege and kept in strict confidence.
Mahany & Ertl – America’s Tax Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine; Minneapolis, Minnesota and San Francisco, California. Services available in many jurisdictions.
Want more information? Our Due Diligence blog has a search engine located in the upper right hand corner. For more information on specific topics, just click the tax tab or type in the name of a particular topic in the search bar. (This is the only article on rain tax however!) We have posted hundreds of informative articles on our site.