High cost of sales-tax exemption for textbooks might doom bill

By Len Lazarick

Students would save money under a bill that would exempt textbooks from Maryland’s sales tax, but the pricey measure appears unlikely to move during a tight budget year.

Advocates had hoped to build on a law passed last year to increase competition in college textbook sales, which has has apparently reduced costs to students. Some neighboring states have tax exceptions for textbooks.

But legislation to exempt the books proposed by Del. Michael Smigiel, R-Upper Shore, runs afoul of the pledge by House leaders to closely scrutinize – and likely kill – any bill with a significant price tag. Eliminating the tax on textbooks would cost the state $18 million a year or more, legislative analysts say.

Richard Hershman, government relations director for the National Association of College Stores, disputed that estimate at a House Ways and Means Committee hearing last week.

He said the estimate was based on inflated enrollment and cost figures that did not account for online shopping and student-to-student sales.

“A lot more students are shopping outside the state of Maryland,” Hershman said.

Based on surveys, his organization estimates about a third of college books are bought online and most of those are not subject to sales tax. Hershman also said inflation has slowed on the textbooks, but he believed schools inflate the cost figures so that students and their families don’t underestimate college expenses.

Exempting textbooks from the sales tax could actually boost sales at brick-and-mortar stores in Maryland, Smigiel said.

“I don’t think it’s going to hurt revenues,” he said. “I think it’s going to help.”

Towson University student Gary Collins, who described himself as “flat broke,” told the committee he spent $400 to $650 per year on books. The business student said he estimated that in the five years it will likely take him to graduate, he would spend $270 to $390 on textbook taxes.

“It isn’t any wonder that the students in the state of Maryland are pursuing books online,” Collins said.

There was no opposition to the bill, and little questioning.

“This is a good bill,” said Del. Carolyn Howard, D-Prince George’s.

But prospects for passage look dim.

Last year, the same bill by Smigiel never got a vote in the Ways and Means Committee. In 2008, a bipartisan effort to pass the same legislation had 26 co-sponsors, but was withdrawn – a move that often happens when sponsors expect an unfavorable vote. The committee voted down the same proposal in 2006.

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