- The Washington Times - Thursday, January 3, 2008

Maryland car dealers were hoping that today”s 1 percent increase in the state sales tax would give their sales a last-minute boost, but many dealers said it was business as usual and some said business decreased in the past month.

“We were definitely expecting to see a busier showroom but that just has not happened,” said Michael Clemens, sales manager at Walker Pontiac Buick GMC in Bowie. “The thing is, nobody knows about the increase.”

Maryland sales taxes increased from 5 percent to 6 percent as part of the state”s first sales tax restructuring since 1977. The increase pushes the state”s tax rate above the District”s 5.75 percent and Virginia”s 5 percent sales tax.

Someone buying a $40,000 vehicle would pay an additional $400 in sales taxes.

Although some dealers have been using the looming tax increase as a selling point, consumers were not impressed by the potential savings.

“Our sales have been down this month,” said Don Massey, general manager of Darcars Chrysler Jeep Dodge of New Carrollton. “I don”t know if people were just more focused on their Christmas shopping, but our sales are down about 50 percent in December.”

A 1 percent sales tax increase is not a big enough incentive to sell more cars in what is expected to be a slow month for the auto industry, analysts said. Most major automakers are expected to announce their December sales numbers today.

“Keep in mind, it has been a buyer”s market for quite a while now,” said Greg Gardner, communications director at Harbour Consulting, which tracks information on the automobile industry. “There are tons of incentives out there trying to make up for what was likely a slow December for most dealers.”