It’s official: HB 1628 sales tax on services killed; COVID-19 and taxes, and other bills to watch
The good news is that last Friday, the full House Ways and Means Committee voted unanimously against HB 1628, "Sales and Use Tax - Rate Reduction and Services."
At the same time, they passed a second bill — HB 1354, "Sales and Use Tax and Personal Property Tax – Services, Aircraft Parts and Equipment, and Data Centers," aka the luxury services tax. We were successful in keeping that bill from adding "business management (consulting) services" through the amendment process.
This week, we invoked our grassroots to ask the Senate Budget and Tax Committee and the president of the Senate to support the formation of a Tax Policy Reform and Fairness Commission proposed in SB 223. A commission composed of members from different professional backgrounds amended, including an MACPA member as a Maryland licensed Certified Public Accountant, will provide policymakers with a clear understanding of the issues and alternatives involved in tax reform, and hopefully foster informed discussion by providing unbiased information and analysis.
We commend Sen. Brian Feldman (a CPA and MACPA member) and the sponsors of SB 223 for their support of a comprehensive assessment of the state’s tax policy. The MACPA strongly encourages the commission to apply the MACPA's Guiding Principles of Good Tax Policy to provide an objective framework for evaluating and improving existing tax laws. These principles will allow the Commission to provide recommendations that are clear, measurable, predictable, and applied consistently and neutrally across all industries and business models, and across all jurisdictions.
We know of several other tax bills, including combined reporting, digital advertising taxes, and several others that we expect action on by Monday.
Then this headline from The Baltimore Sun just appeared in my feed: "Maryland lawmakers consider ending legislative session early, advance emergency bill to fight coronavirus." The article says only bill sponsors are allowed to testify, which means no opposition testimony and no lobbyists will be allowed in the legislative offices. This means many bills can be passed without transparency and time for us and other groups to weigh in. That means a lot of risk and uncertainty as the General Assembly hears and disposes of a record number of bills (4,032) before the crossover deadline on March 16. Stay tuned!
Impact of COVID-19 and taxes
- Maryland taxes: Franchot announces extension of business tax filing deadlines
- MACPA joins AICPA and other CPA associations urging Treasury and IRS to offer tax extensions. See Bloomberg: Treasury considers extending April 15 tax deadline over coronavirus
- Accounting Today reports: "Trump calls for deferral of tax payments from coronavirus victims"
This has been the most intense legislative session in my 30-plus years of active involvement with the MACPA. Without the help of our grassroots members, our CPA Day attendees, our volunteer leaders and our CPA firms, we would not have succeeded in stopping this very bad legislation.
We continue to offer our thoughts and prayers that our state and our nation pull though this crisis soon, and we remember our first responders and health care workers who are in harm's way, working to protect us all.