This afternoon, the House Ways and Means, House Appropriations, and Senate Budget and Taxation Committees held a joint hearing on a number of corporate tax proposals — namely a corporate income tax rate increase, adopting unitary combined reporting, and imposing recordation and transfer taxes on the transfer of controlling interest in certain business entities that own real estate in Maryland.

Maryland Chamber State Taxation Consultant Karen Syrylo, CPA testified today in opposition to all three proposals:

• Corporate Income Tax Rate Increase: Maryland’s current corporate income tax rate is in the middle of the pack nationally. Increasing it from 7 percent to 8 percent will put us in the top third of the states and make us less competitive with states like Virginia and North Carolina. View the Chamber’s position statement here (pdf)
• Combined Reporting: Unitary combined reporting is an unfair system of taxation because it imports profits and loses of business entities with no connection to Maryland. Adopting unitary combined reporting would cause some Maryland companies to pay more tax, while others would pay less - it’s not a loophole closer. View the Chamber’s position statement here (pdf)
• Controlling Interests:This is a new tax on Maryland business entities that will complicate and detract from the Maryland business climate. Selling a business is not the same as selling real property; e.g., the purchaser of a business entity becomes liable for the business’s liabilities, which is not true when a property is sold outright. View the Chamber’s position statement here (pdf)

You can keep up to date on all the Maryland Chamber’s special session activities by visiting www.mdchamber.org/specialsession. If you have any questions about anything you see, contact me at wburns@mdchamber.org.