Legislative / Regulatory | Legislative & Regulatory | Tax | Taxation

CPA issues advance as Maryland General Assembly adjourns

The 444th General Assembly adjourned sine die shortly after midnight on Tuesday morning with the usual pomp and celebrations. With the last of the balloons and confetti long gone from the floors of the Senate chamber, all that’s left now are folks like us, trying to sort through the results and decide what they mean.

An even 2,500 bills were introduced during the 90-day session — 1,487 in the House and 1,013 in the Senate. That’s fewer than usual — an impressive 3,118 bills were introduced just four years ago. Still, there was plenty of work for lawmakers in both houses, and plenty of meaningful new laws to show for their efforts.

With invaluable help and supporting testimony from members of the MACPA’s Tax Committee,  Maryland’s CPAs enjoyed a relatively quiet legislative session, although two important bills related to the association's legislative agenda were passed and now await Gov. Larry Hogan’s signature:

Private letter rulings Newly passed legislation will establish a Legal Division in the Office of the Comptroller and create a private letter ruling process.

MACPA legislative volunteers have been advocating for a Maryland private letter ruling (PLR) process for a long time. PLRs allow taxpayers to get binding answers from the Comptroller’s Office to their tax questions. In turn, the taxpayers can then pay the right amount of tax at the right time, rather than years later after an audit or litigation. Several dozen other state departments of revenue have a similar process in place. By establishing a Legal Division in the Office of the Comptroller and creating the PLR process, Maryland would take a strong step in the fair and transparent administration of state tax laws.

Sales and use taxes on digital products House Bill 791 added clarifying language for two categories of items that lawmakers did not intend to be subject to sales tax:

  • enterprise software; and
  • digital items that a commercial entity has commissioned to be created for use in their own or their related entities.

According to the Maryland Chamber of Commerce, the legislation "increases clarity and helps with compliance while reducing unintended taxation and maintaining legislative intent."

The remaining two items on the MACPA's legislative agenda — opposing efforts to implement sales taxes on professional services, and to replace Maryland’s contributory negligence standard with a comparative fault rule — were not introduced.

Legislative recap slated on April 27 A representative from Annapolis lobbying firm Manis Canning & Associates will join the AICPA's James Cox to provide an update on state and federal legislative issues — including a recap of this years' Maryland General Assembly session — during the MACPA's town hall meeting on April 27.

The virtual meeting will be held from 3 to 4 p.m. ET. It is free for members and is worth one hour of CPE. Get complete details and register for the town hall meeting here.

Read more about the General Assembly's 2022 legislative session here:


Bill Sheridan