ANNAPOLIS – Volunteering may save you some money come tax time in Maryland.
That was the premise behind a bill offering a $1,000 tax break to volunteers who log more than 250 hours of community service annually. Even though the measure never made it out of the House Ways and Means Committee in the 1995 General Assembly session, members said they may want to revisit the issue in 1996.
The committee heard testimony Wednesday about the impact of the proposal, which would have cost the state about $14.7 million next fiscal year.
“We were sympathetic to the bill last term, but we wanted to see if there was a way that it would not be so costly to the state,” said Del. Anne Healey, D-Prince George’s, the committee chairwoman.
The measure died in the committee during the last week of the legislative session, given questions about the cost, Healey said.
On Wednesday, the Department of Fiscal Services estimated that the total loss would be nearly $23 million in state and local taxes, based on results of a 1993 Gallup volunteerism study.
That study said that nearly 295,000 Marylanders would most likely be eligible. But fiscal analysts assume only three-fourths of them would take advantage of the tax break, saving an average of about $75 each in yearly taxes.
Maryland already has two types of tax breaks for volunteer work. Volunteers may deduct certain travel expenses, and emergency services workers can qualify for a $3,000 tax break.
Since cost was a driving issue behind the bill’s defeat, the fiscal services report also included four ways to reduce the tax loss and reward the volunteers:
1) reduce the tax break to $500;
2) restrict the benefit to volunteers serving 480 hours;
3) allow only one tax break per return, and
4) limit the eligibility to taxpayers making less than $50,000 a year.
Healey said she was unsure if the measure would come up again next year. “We’ll have to see what happens,” she said. -30-