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Guest Lon Anderson


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Guest Lon Anderson

In a bold move sure to catch motorists by surprise, Maryland lawmakers are mulling a proposal to add a hefty service tax on auto repairs and towing services during their 30-day Special Session. If passed, The Tax Reform Act of 2007 (House Bill 2) could end up costing consumers in the state tens of millions of dollars annually, estimates AAA Mid-Atlantic.


The trouble is, most car owners in the state are unaware of the fact some members of the House Ways and Means Committee are considering adding language to the bill that would expand the sales tax by levying it upon labor costs for all auto repairs, as well as all related motor vehicle services.


Average labor costs today ranges from $60 to $90 per hour, notes AAA Mid-Atlantic. Maryland boasts 3,834,063 registered passenger vehicles and a spokesman for the auto club predicts that HB 2 will have a chilling impact on motorists, consumers, and more than 900,000 AAA members across the state of Maryland


“This proposal will expand the sales tax significantly, and would include all auto repair and related services,” notes Mahlon G. “Lon” Anderson, AAA Mid-Atlantic’s Director of Public and Government Affairs. “This measure would be costly for all motorists, and would create an unfair financial burden.”


The measure is currently being considered before the House Ways and Means Committee, and the auto club believes these amendments should be removed from the sales tax bill immediately.


”Motorists are already facing skyrocketing fuel costs,” continues Anderson. “With gas prices already headed towards record highs this measure will be further burden on consumers in the state.”


“Expanding the sales tax to include labor will add to the cost of vehicle repairs. The cost of labor is already the most expensive component of repairing a vehicle.”


The price tag of auto repair and maintenance are already escalating, and will also have a direct impact on the safety of roads in Maryland, the auto club spokesman said.


“Many motorists, especially those on lower or fixed–incomes will not be able to afford the higher costs of having their vehicles repaired should this proposal pass,” says Anderson. “This will cause many to skip or postpone critical repairs to their vehicles, and that will produce more unsafe vehicles on area roadways.”


“The proposal would also increase the cost of towing services, and once again it will have a detrimental impact on safety,” comments Anderson. “By expanding the sales tax, motorists will use unsafe methods to remove their disabled vehicles from the road. This will increase the likelihood of a motorist or passenger getting injured or killed, by using alternative means to remove a broken down vehicle.”


The measure will have a further impact on motorists when it comes to paying their auto insurance, says AAA Mid-Atlantic. Repairs are the major component of auto insurance claims. If the General Assembly expands the sales tax to include these items, it will further increase claims costs and ultimately auto insurance rates, the auto club says.

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