It’s back and it is not pretty! Combined reporting has plenty of flaws
It's not that we are against Combined Reporting as a tax policy, it's that we are opposed to the way this bill is written and the effects on taxpayers and tax preparers who will have to comply with it. The bill also does not allow enough time for awareness and education for taxpayers to have enough time to learn how to comply with it.
That is the essence of our testimony in opposition to SB 305 Corporate Income Tax - Combined Reporting we submitted to the Senate Budget & Tax Committee
Download SB 305 Testimony - Oppose Combined Reporting
The House Bill HB 731 will be heard in the House Ways & Means Committee on March 10, 2011
We have been monitoring this legislation since it was first proposed in the 2007 special session of the General Assembly.
We testified last fall before the Maryland Business Tax Reform Commission - see our blog post here and an article by Scott Dance at the BBJ titled, Maryland Panel Rejects the idea of Combined Reporting. Despite the results of that hearing, SB 305/HB731 were introduced recommending Maryland move forward with this legislation.
We recognize the need for state revenues and we understand that this bill will have winners and losers among the many corporations in Maryland. Therefore, we are not opposed to the tax policy but rather the compliance burden and additional complexity in this hard to understand legislation. We also believe that there needs to be a longer implementation timeline to allow education, training, and potential accounting systems adjustments that are necessary to comply with the requirements of the law.
Here is the latest from the Maryland Chamber of Commerce who is opposed to this legislation.
Background from our State Tax Committee Chair, Bev Richard explaining combined reporting from the 2007 session.