# Montgomery County Code — Part II. Local Laws, Ordinances, Resolutions, Etc.

## Chapter 52. Taxation.

### Article Ix. Carryout Bag Tax.

**Sec. 52-77. Definitions.**

  In this Article, the following terms have the following meanings:

  Department means the Department of Finance.

  Director means the Director of the Department of Finance.

  Food assistance program means any federal, state, or local program that provides monetary benefit to low-income individuals and families used at a store to purchase food.  Food assistance program include Supplemental Nutrition Assistance Program (SNAP) or Women, Infants, and Children Program (WIC).

  Paper carryout bag means a paper bag provided by a retail establishment to a customer at the point of sale, pickup, or delivery.  Paper carryout bag does not include:

    (1)   a paper bag provided by a pharmacist that contains a prescription drug;

    (2)   a bag used to take live fish, insects, mollusks, or crustaceans away from a retail establishment;

    (3)   a paper bag that a restaurant gives a customer to take prepared or leftover food or drink from a restaurant;

    (4)   a paper bag containing prepared food provided at the drive-through window of a restaurant;

    (5)   a paper bag provided at a mobile food truck that contains prepared food;

    (6)   a paper bag provided for food delivery that is collected by a third party delivery service to carry the purchased item;

    (7)   any paper bag intended for garbage, pet waste, or yard waste;

    (8)   a bag used to package bulk items, including fruit, vegetables, nuts, grains, candy, ice, or small hardware items;

    (9)   a bag that contains hanging garments or dry-cleaned clothes, including suits, jackets, or dresses;

    (10)   a bag or paper bag sleeve used to contain or wrap a perishable item, including meat or fish, or unwrapped prepared foods or bakery goods;

    (11)   a bag used to package items for the purpose of charitable food distribution; or

    (12)   a bag provided at the point of sale at seasonal event, such as:

      (A)   an occasional farmer’s market;

      (B)   a full-time retail operation located on a farm;

      (C)   a street fair; or

      (D)   a yard sale.

  Point of sale has the same meaning as stated under Chapter 48-66.

  Restaurant means any lunchroom, café, or other establishment located in a permanent building for the accommodation of the public, equipped with a kitchen containing facilities and utensils for preparing and serving meals to the public, and outfitted with or without a public dining area.  A restaurant does not include any area of a supermarket, department store, or other retail establishment beyond the kitchen and public dining area.

  Retail establishment means any person engaged in the retail sale of goods.  Retail establishment includes any supermarket, convenience store, shop, service station, mobile food truck, or restaurant, and any other sales outlet where a customer can buy goods.

**Sec. 52-78. Tax imposed – Countywide and municipalities.**

  (a)   A tax in the amount of 10 cents is levied and imposed on each customer for each paper carryout bag that a retail establishment provides or sells to the customer.

  (b)   Applicability to municipalities.  A retail establishment in a municipality is required to collect, exempt, remit to the County, report, and adhere to all the requirements under this Chapter for a single-use plastic carryout bag as it would for a paper carryout bag.

  (c)   Except as provided in Section 52-78A, each retail establishment that provides a paper carryout bag, and if a plastic single-use carryout bag is provided within a municipality, to a customer must collect the amount of the tax imposed under subsections (a) and (b) when the customer makes any payment for goods in person, by telephone, by facsimile, or by any other means.  The retail establishment must hold the taxes required to be collected under this Section in trust for the County until remitted as required under Section 52-79.

  (d)   Each retail establishment may retain 5 cents from each 10-cent tax that the retail establishment collects to cover the administrative expense of collecting and remitting the tax to the County.

  (e)   A retail establishment must indicate on the customer’s transaction receipt:

    (1)   the number of paper carryout bags that the retail establishment provided to the customer; and

    (2)   the total amount of tax levied under this Section unless a food assistance benefit is used for payment then the receipt must indicate the carryout bag tax is exempt.

  (f)   A retail establishment must post a notice at the public entrance to the retail establishment or at each point of sale that reads: “All carryout bags provided by the retailer are subject to a charge.  A customer who brings their own reusable carryout bag or who does not use a carryout bag will not be subject to a charge.”  The notice must be posted in English and Spanish.  The Department of Environmental Protection must post an example of a notice in English and Spanish on the County website.

**Sec. 52-78A. Recipients of food assistance program – exemption.**

  A retail establishment must not charge or collect a tax for a paper carryout bag provided to a customer for items purchased using a food assistance program.

**Sec. 52-79. Remittance.**

  (a)   Each retail establishment must remit the full amount of the tax collected for all paper carryout bags provided to a customer during the previous quarter, less the amount retained under Section 52-78(c).

  (b)   Quarterly remittance – required.  A retail establishment is required to remit the taxes under subsection (a) to the Director every quarter in accordance with the remittance schedule posted by the Department on its website.

  (c)   Reporting.  Each remittance must be accompanied by a report of all transactions that involve paper bags subject to the tax.  The report must be on a form supplied by the Director and must contain:

    (1)   the number of paper bags supplied or provided to customers:

      (A)   for which a tax was collected; and

      (B)   for which a tax was not collected;

    (2)   the amount of tax required by this Section to be collected;

    (3)   for an owner of more than one retail establishment must identify the remittance for each location by name and address; and

    (4)   any other information the Director requires to ensure that the proper tax has been remitted to the County.

  (d)

    (1)

      (a)   If the retail establishment does not file a required report by the deadline established under subsection (a), the Director may estimate the amount of tax due.  The Director may base the estimate on a reasonable projection of paper carryout bags, or where applicable plastic carryout bags, supplied or provided and may consider taxes reported by other retail establishments.

    (2)   The Director may send a notice of the estimated tax due, including interest and penalty, to the retail establishment’s last known address.  The retail establishment must pay the estimated tax, including any interest and penalty assessed by the Director, within 10 days after the notice is sent.

  (e)   Each retail establishment must preserve for 3 years all records necessary to determine the amount of the tax due under this Section.

  (f)   The Director may inspect any records required to be kept under this Section at any reasonable time.

  (g)   The Director must deposit all taxes remitted under this Section into the stormwater management fund created under Section 19-35, after deducting the cost of administering this Article.

**Sec. 52-80. Interest and penalties.**

  (a)   If a retail establishment does not remit to the Director any tax owed under Section 52-79 when due, the retail establishment is liable for:

    (1)   interest on the collections at the rate of one percent per month for each month or part of a month after the remittance is due; and

    (2)   a penalty of 5 percent of the amount of the collections per month or part of a month after the remittance is due, up to 25 percent of the tax collected.

  (b)   The Director must collect any interest and penalty as part of the remittance due.

**Sec. 52-81. Prohibited conduct.**

  A retail establishment must not:

  (a)   neglect or refuse to collect or remit the tax levied under this Article;

  (b)   file an incomplete, false, or fraudulent report to the Director;

  (c)   neglect or refuse to keep complete and accurate records; or

  (d)   refuse to allow the Director to inspect and audit the retail establishment’s records.

  (e)   misrepresent, advertise, hold out, collect, or state to the public or to a customer an amount that exceeds the allowable tax established under Section 52-78(a).

**Sec. 52-82. Regulations.**

  The County Executive may adopt regulations under method (2) to implement this Article.

**Sec. 52-83. Enforcement.**

  Any violation of this Article is a Class A civil violation.  Each violation is a separate offense.  A conviction under this Section does not relieve a retail establishment from paying a remittance owed to the County.