Bill Positions

Bill Number: SB 94

Bill Title: Sales and Use Tax - Gross Negligence Penalty for Underpayment

Bill Sponsor(s): Ch. B&T, Dept. Comptroller

Subject: Budget & Taxation

Committee: B&T

Bill Summary: This bill would have provided that underpayment of sales and use tax by 25% or more is prima facie evidence of gross negligence, and required the Comptroller to impose a penalty of 25% of the underpayment in such cases. Current law requires the Comptroller to impose a penalty of 10% of unpaid sales tax if taxes are not paid when due, or a penalty of 100% of the underpayment if it results from a person's intent to evade taxes .

History: The bill died without a vote in the Budget & Taxation Committee.

Chamber Position: Oppose

Position Summary:While the Chamber supports providing the Comptroller the necessary laws and resources for effective tax enforcement, this bill was unfair to taxpayers. The bill was unclear regarding over what period a 25% underpayment of tax is measured. It also could have been utilized to penalize taxpayers that had good cause to assume that certain transactions were not subject to taxation. It would have shifted the burden of proof to require taxpayers to demonstrate that they were not grossly negligent in their actions.

Position Statement: Click here (pdf)

Chamber Staff: Ronald Wineholt

General Assembly: Click here to view the bill on the Maryland General Assembly's website.