Two prominent MACPA leaders will be present at the hearing of the Maryland Business Tax Reform Commission on Tuesday, Nov. 9 in the Joint Hearing Room of the Legislative Services Building in Annapolis.

Bev Richard, an MACPA board member and past chair of the MACPA's State Tax Committee, will be representing the MACPA and testifying on Tuesday. Another long-time and active member of our State Tax Committee, Karen Syrylo, is a member of the Tax Reform Commission.

The Maryland Business Tax Reform Commission was established by Senate Bill 2 (Chapter 3), Tax Reform Act of 2007, during the 2007 special session of the General Assembly. The charge of the commission is to review and evaluate the current business tax structure, which includes combined reporting. The final report was originally to be completed by December 2011, but the date was changed last session to December 2010.

We have been monitoring the activities of this committee since its inception. This public hearing is a formality before the committee issues its report prior to the beginning of the 2011 General Assembly session. If you have any concerns about the various types of taxes they may be considering, you should make an effort to testify.

The public hearing will be held 6:30 p.m. on Nov. 9 in the Joint Hearing Room of the Legislative Services Building. 

The MACPA will recommend that the committee employ the “10 Criteria for Evaluating Proposed Tax Legislation” when considering any recommendations to alter Maryland's current business tax structure. 

The committee will be considering the following tax proposals:

• Combined reporting for corporate income taxes.
• Other corporate income tax changes, such as tax rates and single sales factor apportionment.
• Alternatives to the corporate income tax, including alternative minimum tax, gross receipts tax, and value-added tax.
• Broadening the sales tax base.
• Requiring additional information from businesses receiving tax incentives.

Should the committee recommend combined reporting, we will strongly urge a delay in the implementation date to allow time for corporations and tax advisors to prepare for the new reporting method and for the comptroller's office to implement systematic changes needed to effectively administer.

Anyone wishing to testify either on behalf of your business or as an individual must sign the witness register by 6:15 p.m. on the day of the bill hearing; the register will be made available at 5:30 p.m. Testimony of individuals representing groups and panels will be limited to five minutes, while testimony of individuals will be limited to three minutes. If you have written testimony, please submit 25 copies to the committee staff for distribution by 6:15 p.m.

The Business Tax Reform Commission has been meeting for two years on these issues and will issue a final report to the governor and General Assembly in mid-December 2010. 

• See the Commission's website for additional information. 
• See our coverage from the special session in 2007: New corporate tax reporting rules need changing.
• U.S. SBA report on the costs of regulatory compliance on small business.