Sponsor proposes 0.75-point bump in vehicle excise tax; dealers and associations oppose

House Bill 167 would raise Maryland’s vehicle titling excise tax from 6 percent to 6.75 percent, sponsor Delegate Chris Fair told the Ways and Means Committee on Jan. 28, calling the move a ‘‘modest’’ adjustment to stabilize transportation funding and support road and safety investments.

Supporters framed the change as a targeted user-fee aligned with transportation beneficiaries and said the rate has not changed in nearly 20 years while infrastructure needs have grown.

Industry groups testified in opposition. The Maryland Automobile Dealers Association and regional dealer groups said new- and used-vehicle prices and finance costs have risen sharply — pushing monthly payments and ownership costs higher — and warned the tax increase would add hundreds to thousands of dollars to typical transactions. Dealer representatives and the Washington-area new-auto dealers association said the state’s vehicle-title-tax revenues have grown substantially in recent years and that dealers and customers already bear rising costs; they urged the General Assembly to consider other revenue options and warned of competitive pressure from neighboring states with lower total tax burdens.

Opposition witnesses also flagged two related proposals pending in the session — a potential repeal of a trade-in credit and other administration proposals — arguing combined changes would exacerbate price and competitiveness effects on vehicle purchases.

Ending note: Sponsor argued the increase would preserve the fund that supports road and safety projects; opponents asked the committee to reject the bill and to pursue alternatives. No committee vote was recorded during the hearing.