Property Tax - City of Hagerstown and the Hagerstown Multi-Use Sports and Events Facility, Inc. - Exemption
HB0846, titled the Transportation Access and Revenue Act, expands Maryland’s sales and use tax base to include a set of transportation-related services. The bill adds a new category of “taxable service” covering services such as transportation equipment manufacturing services, certain wholesale transportation equipment services, equipment rental and leasing for transportation-related machinery, air transportation, limousine service, towing, courier and messenger service, automotive repair and maintenance, parking lot and garage services, and transportation program administration services. It also amends the definition of “taxable price” so that charges for labor, professional services, and other items are not excluded from tax when those charges are part of a taxable service.
The bill further directs the Comptroller to distribute sales and use tax revenue collected from these newly taxable transportation-related services to the Transportation Trust Fund. It also specifies that this revenue may not be credited to the Gasoline and Motor Vehicle Revenue Account, which is one of the accounts within the Transportation Trust Fund. In addition, the bill makes conforming changes to existing distribution provisions for short-term vehicle rentals, peer-to-peer car sharing, and electricity sold at EV charging stations or used to charge electric vehicles.
In practical terms, HB0846 would increase the number of transportation-related transactions subject to Maryland sales and use tax and redirect the resulting revenue toward transportation funding. The bill amends provisions in the Tax-General Article and the Transportation Article, affecting how taxable services are defined, how sales tax revenue is distributed, and how transportation-related tax receipts are credited within the Transportation Trust Fund structure. It takes effect July 1, 2025.
The available record shows no committee transcript or recorded votes, so there is little direct evidence of debate or opposition in the provided materials. Based on the bill’s structure, its general policy direction appears to be revenue-positive for transportation funding, with a focus on broadening the tax base rather than raising rates. Any contention would likely center on whether the listed service sectors should be taxed and whether the new revenue should be dedicated to transportation rather than routed through existing motor-fuel-related accounts.
HB0846 would amend the Maryland Tax-General Article to expand the sales and use tax to specified transportation-related services by redefining “taxable service” and narrowing exclusions from “taxable price” when the charge is part of a taxable service. It would also amend the Transportation Article to require that sales and use tax revenue from these services be distributed to the Transportation Trust Fund, while prohibiting that revenue from being credited to the Gasoline and Motor Vehicle Revenue Account. The bill therefore changes both the tax base and the revenue allocation structure for transportation funding.
No committee transcripts or vote tallies were provided, so there is no documented floor or committee sentiment to summarize. On its face, the bill reflects a pro-transportation funding approach and appears designed to generate dedicated revenue for the Transportation Trust Fund. The absence of recorded opposition or amendments in the supplied materials suggests no visible controversy in the available record, though the policy would likely be viewed favorably by transportation funding advocates and more cautiously by affected service industries.
The main potential point of contention is the expansion of sales and use tax to a broad set of transportation-related services, including repair, towing, courier, limousine, parking, and equipment-related services. Businesses in those sectors may object to being newly taxed, while supporters may argue the bill creates a more stable funding source for transportation infrastructure. A second possible issue is revenue routing: the bill explicitly directs these receipts to the Transportation Trust Fund and bars crediting them to the Gasoline and Motor Vehicle Revenue Account, which could matter to stakeholders concerned about how transportation revenues are allocated among programs.