The House Ways & Means Committee tomorrow will hear HB 1053, legislation which would increase annual filing fees from the current $300 to $1,000.

The Maryland Chamber will be there to voice strong opposition. The legislation would increases the annual report filing fees of all business entities from the current $300 to $1,000. It also provides for a credit, of up to $500 against the corporate or individual income tax paid on that business entity’s income, with no carryforward for any unused credit amount. The Maryland Chamber opposes this bill because:

• The $1,000 is way out of line with the filing fees in surrounding states.
• The fee was only just raised from $100 (or from zero for some entities) to $300 for calendar year 2004.
• The bill would be extremely unfair to small businesses due to the high amount of the fee, and remember that Maryland is predominantly a small business state.
• The income tax credit of the proposal will be a nightmare to administer regarding the many flow-through entities (partnerships, LLCs, S-corporations) whose income tax is paid on the tax returns of their owners.
• The bill is unfair, and perhaps unconstitutional, in that it discriminates in favor of businesses that have enough Maryland activity to generate at least a $500 income tax in Maryland, and discriminates against foreign businesses and small businesses whose income tax is under $500 and therefore would not generate the tax credit provided for in the bill; the latter businesses end up paying a higher net filing fee.

For more information on this bill, contact Karen Syrylo at (410) 269-0642, (301) 261-2858 or ksyrylo@mdchamber.org.