Proposed HB 1628 could impact Maryland community associations

The following information was provided by Executive Director Stephen McConoughey of the Chesapeake Region Chapter of the Community Associations Institute, regarding proposed House Bill 1628 in the Maryland State Legislature. Please read the position taken by the CAI based on their analysis and consider it as you form your own position and formulate a response to our Maryland representative.

Executive Director Stephen McConoughey, Chesapeake Region Chapter, CAI:

House Bill 1628 … would apply a 5% use tax to many of the services used by community associations across the state, including property management, pool management, legal, landscaping, snow removal, security, trash pickup, and a host of other services.

This tax would add thousands of dollars to a single community association’s budget, and would invariably affect condominium and homeowners association fees for association members.

Please take less than five minutes to email your legislators expressing your opposition of House Bill 1628 regarding a 5% tax on community associations.

More details regarding the House Bill are included here:

From CAI Maryland Advocacy:

The legislature presented on February 20, 2020, House Bill 1628 that seeks to raise money for education through an amended sales and use tax that will add that a “Taxable Service” means any activity engaged in for a buyer for consideration. If passed, this law would reduce the sales tax in Maryland from the current 6% to 5%, but would apply a 5% use tax to many of the services used by community associations across the state, including property management, pool management, legal, landscaping, snow removal, security, trash pickup, and a host of other services. Associations spend some $1.8 billion each year maintaining their communities, and this tax would add thousands of dollars to a single community association’s budget, approximately $90,000,000 in tax collectively, and would invariably affect condominium and homeowners association fees for association members.

While CAI understands the critical need to fund education, we do not believe that the legislature has given enough consideration to the impact of this tax on our many residents, and the impact would be enormous: Approximately $1,350,000 Marylanders live in 515,000 homes in 6,700 community associations. Many Associations struggle to pay their expenses right now.

While Governor Larry Hogan is not in favor of this tax, the bill has a great deal of support in the House. It is important, then, that legislators hear your voice and understand your concerns now. The House hearing is scheduled for Tuesday, March 3, 2020.

Please take less than five minutes to email your legislators expressing your opposition of House Bill 1628 regarding a 5% tax on community associations.

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