During his budget message on Tuesday, Wicomico County Executive Rick Pollitt proposed a $0.05 increase in the county’s real property tax rate. This would increase the tax rate from 75.9 cents per hundred dollars of assessed value to 80.9 cents, a 6.59% increase. However, if adopted, this proposed rate increase would also impact two other taxes paid by Wicomico County businesses.
All businesses in Wicomico County pay a personal property tax. This tax, set by Maryland law, is 250% of the real property tax rate. Each year businesses file a return with the county and pay the tax based on the depreciated value of all plant, property, and equipment. This includes furnishings and office equipment.
Some businesses do qualify for a personal property tax exemption for the purchase of new manufacturing equipment. All such exemptions have to be approved by the county council and are contingent upon the businesses adding to their workforce.
Some Wicomico businesses also pay an inventory tax. While we were not able to confirm this, Wicomico County is reported to be the only county in Maryland that assesses a personal property tax on inventory. The rate is the same as the personal property rate and is based on 35% of the value of the inventory.
In a conversation with Pollitt on Monday evening, he explained that the proposed rate real property rate increase was a necessary and a by-product of the revenue cap.
“Over the past several years, we have seen the rate go down because of the cap. Now, if we want to attempt to maintain the same level of services, the tax rate has to go up.”
Many citizens, and some members of the county council, have already expressed concern about the proposed rate increases. Because the personal property rate is tied to the real property rate, concern has been expressed regarding a potential impact on local employment and economic growth.
We called Wicomico Finance Director Pat Petersen to get an explanation of the personal property tax system. While explaining the system she also noted that, because the personal property rate was tied to the real property rate, area businesses have seen a decline in their personal property (and inventory tax) bills over the past several years.
What the final tax rates will be depends on the county council. They can accept Pollitt’s budget (with the included rate hikes) or find enough savings in the budget to remediate all or part of the proposed rate increase.
17 comments:
Glad someone's paying attention....Ricky's trying to slide another one in.....call your district representative - ask them to vote against the tax increase and vote for spending cuts!
I'm surprised Pat Peterson could explain all this. She's a lightweight and needs to retire.
Peterson's statement would only be correct if the business had shown no growth. As we all know most businesses hope to see some level of growth.An increase in taxes will surely not help any business expand.
Wicomico County AND the City of Salisbury are the ONLY jurisdictions in the State that do NOT exempt inventory from the personal property tax. That is one big reason that businesses do not want to locate in Wicomico County let alone the City of Salisbury!
The "good 'ole boy" system at work.
I can tell you, this is exactly why I had relocated out of Wicomico County and into Delaware. Even after I had moved they, (Wicomico County) continued to bill/tax me for inventory and equipment and it was cheaper to pay it than hire an attorney to fight it. They know and use every trick in the book, especially if your a property owner like I am.
To ALL those businesses out there, start looking to relocate NOW and I'm being very serious. Send a clear messAge your not going to take it any more. The rent is less just over the state line and the taxes are actually better than Maryland.
Looking at the other side of the coin: Are there enough spending cuts in the budget? If the council did cut how much do they have to cut to match the 5 cent increase proposed by Rick so there wouldn't be an increase?
Rick Pollitt suck a fat one, WE don't need or WANT the services you claim I or anyone else needs or wants... Why the hell should I pay more in taxes when i can't afford to live where I already do? why Should I pay higher taxes on services I don't use or are even live near... Why should I pay a higher tax to help out school's I don't even live within 50 miles of?
Here is an Idea Rick, spend OUR money, I.e. OUR tax money as if it were your own personal money and once it is gone, you can't get it back... I bet if you were forced to live like us and pay taxes like us on a salary like us you would think twice on taxes... get over yourself... Its sad how your fat and lazy to do your own work, and you have to waste my money to hire a PIO to talk for your fat ass... Do work...
Sussex County loves Wicomico County!
"Go north young man"
First of all, personal property returns are filed with the State Department of Assessments and Taxation. Second, the council was reminded at thier work session with Rick that the proposed equalization of the tax rate would affect businesses....so Rick was not tryiong to "sneak anything past anyone".
Further, for most businesses located here inventory is a very small part of thier return...their is an exemption for manufacturing. Another incorrect claim in this post is that inventories are reported on every return in every county....because it's a STATE return and the assessment is calculated by the state.
Also bear in mind that the average commercial property asessment statewide, including here in Wicmico had fallen around 7%...that reduction will offset oart of any increase. And, just like any residential property, you can appeal your property assessment every year if you feel that falling values warrnat it.
5:13 who are you? PIO, Rick, flunky? Take this to the 3rd floor. WE DON'T WANT YOU OR YOUR BUDGET! Go back to Eden and stay in your house for good. Don't bother to come back. County council, please make the cuts Ricky wouldn't make!!! Thank you!
Your going to see more and more foreclosures. Especially from those who are just struggling to survive and the elderly who have worked all their lives and now live on a fixed income. There comes a point when you just can't continue to pay these increases. I think most of us are seeing our incomes decreasing. I for one lost my job to corporate downsizing and outsourcing. I now work for less than half of what I used to make five years ago. My wife and I work full time but are struggling to pay for just the basics like food, the mortgage, electric, and Gas. My grocery expense alone feeding a family of four has gone from one hundred less than five years ago to almost three hundred for every trip we make to the store. I know I am average, but I don't how much more I can take! I feel like I am up against a wall now! Do these public officials really know what the average family is going through at this time?
Anon 1713 -
For someone who claims that he / she has all the facts, I'm surprised you didn't sign your name. Let's examine a few of you're statements.
Yes, it is true that you file your return with SDAT. However, you are billed by the county.
It is possible that Pollitt stated in his "work session" at the MAC center that businesses would be affected. What exactly does that mean? Of course businesses would be affected by a change in the real property rate if they own real property. Whether or not he was explicit about the effect on personal property tax rates I can't say. Since I wasn't at the meeting, I can't say. However, I don't recall any mention in the actual budget message. Regardless, that wasn't the point of the post.
The post never accused Pollitt of trying to "sneak anything past anyone".
As to how much of the average businesses PPT is due to inventory, I can't say and never claimed that I did. Since most of our manufacturing is gone (in part due to Maryland's stellar business climate), I'm not surprised. The exemption you speak of only relates to businesses that invest in new equipment, etc. and is for a limited time.
I can't speak to whether or not inventory is shown on every PPT return in the state. However, to the best of my knowledge, Wicomico is the only county which taxes that inventory. 35% of the inventory value is subject to the PPT.
While the returns may be filed with the state, each county bills the individual businesses in that county. The rates vary from county to county. It is only the formula that is set in state law.
You have yet to point to a real error in the post itself.
GA, I haven't heard you or Joe come up with any good ideas on what services to cut in order for the county to maintain the third lowest property taxes in the state, and the 2nd or 3rd lowest tax rate per capita.
You can start with cutting the PIO, and lowering Pollitts salary to reasonable. Then take all the frills out and if it means holding off on the collector road at this time then do it....that to me is not a dire necessity.
3rd lowest property taxes in the state. Yet they still cry. Pollitt is far from lazy. Making statements about his weight is like throwing stones at Holloway for growing up under the powerlines or Pretty-man's use or waste of botox. It just hits below the belt. Folks these are tuff financial times brought on by years of poor financial planning by our prior councils.
Craemer, Shea, Peterson, ring a bell. They should.
Why dont we start with cutting the councils pay. Maybe not buy the lap tops they ask for. They might want tp brown bag instead of meals catered in. Do you see how petty that sounds it is a drop in the bucket compared to major loss of state and federal cuts we have faced.
Oh yeah there is no truth to the rumor Rick fell out of bed and caused the quake in Japan.
Anon 0746 -
You are quite right! It's a little early now, but if I haven't done a post on suggested cuts by May 20, speak up and hold me to it. I need to spend some time with the budget, but I agree that SPECIFIC cuts need to be suggested.
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