Chris Atkins, Senior Tax Counsel and Director of State Fiscal Projects at the Tax Foundation, posted an item on the Tax Policy Blog today addressing the corporate tax information that made news a couple weeks ago (related MD Chamber blog posts here , here, and here.

“The fact that 68 out of 132 corporations paid no tax is a meaningless statistic, however, and tells us nothing about corporate tax evasion,” Atkins said. “As such, these numbers should not be used by lawmakers to set corporate tax policy in Maryland or any other state.”

Atkins goes on to outline a number of legitimate reasons a corporation would pay no income tax. Read the full post here.

In prior year’s, the Comptroller’s cover letter included similar disclaimers. In 2005, the cover letter stated, “There are several legitimate reasons for paying no income tax in any given tax year, including having no profits in that tax year, using carry-forward or carry-back losses to reduce income, and using income tax credits to reduce liability.”

Unfortunately, that disclaimer did not appear on this year’s cover letter.

It’s likely that advocates for combined reporting in Maryland will continue to use this misleading data to make their case. The Maryland Chamber believes that it’s a mistake to push such a major change to Maryland’s corporate income tax system when there is no accurate estimate of what the fiscal impact of such a change would be — for the state or for Maryland employers.