Bill Positions

Bill Number: SB 603

Bill Title: Corporate Income Tax - Rate Reduction and Reform

Bill Sponsor(s): Sen. Pinsky, et al.

Subject: Budget & Taxation

Committee: B&T

Bill Summary: This bill would have required corporations that are part of a combined group to file an income tax return under the combined reporting method and apportion income to MD based on the 3-factor formula, effective for tax years beginning after December 31, 2008. Corporate data that would have been reported to the Comptroller by corporate groups regarding the impact of combined reporting would have been repealed after tax year 2008. The Comptroller was to estimate by 3/1/10 a corporate tax rate that would be reduced by 60% of the additional revenues collected under combined reporting, and apply that rate for the tax year beginning after 12/31/10 but before 1/1/12. The bill anticipated that the General Assembly would enact a new corporate income tax rate for tax years beginning after12/31/11.

History: The Chamber has opposed several bills in recent years (SB 2 2007 Special Session, SB 393 2007, SB 411 2006, SB 403 2005) that would have required corporations to pay income taxes based on combined reporting, all of which have failed. In 2009 SB 603 died without a vote in the Budget & Taxation Committee.

Chamber Position: Oppose

Position Summary: The Chamber opposed this bill because it prejudged the work of the MD Business Tax Reform Commission, which was established to evaluate Maryland's system of business taxation. It also was inappropriate to delegate to the Comptroller authority to administratively set tax rates based on revenue estimates.

Position Statement: Click here (pdf)

Chamber Staff: Ronald Wineholt

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