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Ocean City has appealed a Worcester County Circuit Court decision in a lawsuit seeking declaratory judgment in its longstanding battle for a tax differential agreement with Worcester County government to the Maryland Court of Special Appeals.

City Hall’s tax beef moves to next level

(Nov. 23, 2018) Pressing forward in its longstanding battle for a tax differential agreement with Worcester County government, Ocean City last week appealed a lawsuit seeking declaratory judgment that was rejected by Circuit Court in October.

City Manager Doug Miller said the town decided on Oct. 30 to appeal the case to the Maryland Court of Special Appeals.

“At this point we’ve taken the action, but have received no answer,” he said.

Miller noted the Court of Special Appeals, which convenes in Annapolis, currently has a packed docket that could extend response time.

The Town of Ocean City filed suit against the Worcester County Commissioners on Jan. 16, regarding the resort’s right to a split tax schedule that would levy one property rate on Ocean City property owners and another on county properties. While not specifically requesting a tax differential, the suit asked the court to rule if Ocean City was entitled to a separate tax under Maryland law.

In an earlier interview, Mayor Rick Meehan said Worcester County Circuit Court rejected but did not dismiss the suit, which enables the town to pursue an appeal process.

For years, the mayor and City Council have pressed for a differential, which would recognize the multiple county services resort property owners pay for but don’t use, because resort government provides those same services.

At the heart of the issue are two words in state code. The current version states Worcester County “may” provide a tax differential, while the resort would like to see it changed to “shall,” which would make compliance compulsory.

Although the annual plea by city officials for this consideration has resulted in larger county grants to the city government, a huge gap exists between what each side believes is the correct number. The results of separate studies of duplicate services, produced by the city and the county, were millions of dollars apart in terms of taxpayer costs.

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