A tax increase may be in the bag

As of the first of the year, shoppers in Washington, D.C. were forced to drop an extra nickel into the till for each paper or plastic bag they used when going to the store. Store owners collected a share of the tax, but the true intent of the proceeds was a fund to help clean up the Anacostia River.

While the ban has caused some confusion among District shoppers, what truly matters to their local government is the estimated $3.5 million in revenue created by the new tax. With dollar signs in their eyes, some Maryland legislators in both the House of Delegates and the Senate want to get in on the taxation action with proceeds going (of course) to the Chesapeake and Atlantic Coastal Bays 2010 Trust Fund. The fiscal note with these bills posits a possible windfall to the state of $7.8 million based on a number of assumptions – very tempting when this is a fee easily buried within the overall cost of grocery shopping.

Undoubtedly, plastic bags can become an eyesore when they get away from a trash or recycling bin, which is one reason the city of Baltimore is taking action on them. But the problem isn't as bad as you might think, according to the American Chemistry Council. And if the state begins taxing plastic bags as a revenue stream, some consumers will go to cloth bags but most will be forced to grin and bear the additional fee. While stores would get a small portion of the tax back, an average grocery trip would get a little more expensive for the rest of us if these General Assembly members have their way.

The bills are HB351 and SB462, respectively. Both had their hearings but have not been brought forward for a committee vote yet.