ANNAPOLIS -- The Senate Budget and Taxation Committee has decided that it is time to take another look at the Maryland law that exempts newspapers from the state sales tax.
Sen. Laurence Levitan (D-Montgomery), chairman of the committee, said a review is necessary because of a Supreme Court decision last spring invalidating an Arkansas law that exempted some newspapers and taxed others based on content.
The Maryland law exempts newspapers that are published at least weekly, but does not exempt magazines, shopping advertisers and community newsletters.
An opinion issued by the state attorney general's office said the Maryland law probably is valid because it does not discriminate based on content of publications, as did the Arkansas law.
Henry Raymond, an analyst for the committee, told senators at a meeting last month that the state would gain about $8.3 million annually if the exemption for newspapers is repealed.
It would lose about $50 million in sales tax revenue if the exemption is extended to all printed materials, he said.
Stephen Cordi of the state comptroller's office said some suits already have been filed in Maryland as a result of the Arkansas decision, including one by McGraw Hill challenging taxation for publication of magazines.
Some members of the committee said the solution may be to repeal the exemption for newspapers.
"If you tax everybody, there's no problem," said Sen. Julian Lapides (D-Baltimore).
"It's a problem, a real problem. We've got to do something," Levitan said.