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Driving privileges could be denied Marylanders who owe state taxes

Maryland Gov. Martin O'Malley's search for ways to close his state's $1.3 billion budget gap has driven him to propose making driver's licenses and vehicle registrations contingent on motorists' tax compliance.

Photo by Gabriel Boone/iStock

The governor would let the state refuse to issue or renew licenses and registrations to those who have unpaid, undisputed tax obligations. By making drivers pay up, the administration estimates it could collect an additional $40 million over the next two years. 

O'Malley spokesman Shaun Adamec told the Baltimore Sun that the proposal isn't a new tax, but a way to collect existing taxes.

"The purpose of this is to collect taxes that are a liability on the state's books. These are accounts receivable," said Adamec. "If they're not [paid], it becomes a burden on those of us who do pay our taxes."

No green light yet: While Maryland lawmakers are looking for ways to get the state's finances off their current rocky road, many are questioning whether O'Malley's proposal is the right fiscal route.

I understand that sometimes people have good, or at least understandable reasons why they can't or don't pay their taxes. And in many cases, if people don't have a car, they can't get to work. No work mans no income and no way to pay what they owe.

Still, it might be worthwhile for Maryland to give the O'Malley proposal at least a test drive. Institute the driver's license/tax debt program for a year and see if there's any increase in collections.

Those of us who drive regularly will do just about anything to stay behind the wheel. Threatening the loss of that privilege might just motivate tax deadbeats who can, but just won't, pay.

As for folks with legitimate reasons for falling behind on their state tax obligations, the Department of Motor Vehicles connection could get them to touch base with the Maryland Comptroller's Office to arrange a payment plan.

Speaking of autos and taxes, yesterday's Daily Tax Tip dealt with donating vehicles to a charity and claiming the automotive gift as a tax deduction. It was a crazy day and I was late in posting the tip so you might have missed it.

If it did slip by you or you just want to peruse the all the tips so far this filing season, check out the January and February tips lists.

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