T&E Item 1
April 4, 2011
Transportation, Infrastructure, Energy and Environment Committee
Faden, Senior Legislative Attorney
Worksession: Bill 8-11, Taxation - Excise Tax - Disposable Carryout Bags
Bill 8-11, Taxation Excise Tax - Disposable Carryout Bags, sponsored by the Council
President at the request of the County Executive, was introduced on March 15, 2011. At
introduction, Councilmembers Rice and EIrich asked to be listed as co-sponsors. A public
hearing was held on March 31. See selected testimony, ©22-25, 28-48.
Bill 8-11 would impose an excise tax on certain carryout bags provided to customers at
certain retail establishments, and require certain retail establishments to collect the carryout bag
tax and remit the tax to the County. The consumer would pay the tax to the retailer, who would
remit it periodically to the County Finance Department. As introduced, the tax would take effect
on January 1,2012. This Bill is based on part of a similar District of Columbia law (see ©13-20)
which Was enacted in 2009.
Legal authority Under state law codified as County Code §52-17, the County has broad
excise taxing authority as long as the proposed tax is not a sales or property tax - Le., if the tax is
not based on the amount of the transaction or the value of the item. As a flat tax on the provision
of each bag irrespective of its cost or value, this tax qualifies as an excise tax.
1) Should the County tax carryout bags? Would an alternative approach achieve
the same environmental goals?
The Executive proposed this tax to achieve 2 different but related goals: raise some
revenue, and create an incentive for consumers and retailers to use fewer disposable bags. The
latter goal would be a step toward the larger goal of improving and cleaning up the natural
the County's legislative goal is to reduce the use of disposable bags, or some subset of
them, by some means beyond public education or persuasion, 3 options have been suggested;
• prohibit their sale or use;