On August 30, the Senate Budget and Taxation Committee heard from the Department of Legislative Services (DLS) and business representatives regarding the State’s corporate tax structure and ways to improve the State’s business climate. The DLS briefing provided an overview of the current corporate tax structure as well as recent proposals that have been reviewed by the General Assembly and others such as combined reporting and an alternative minimum assessment on gross receipts/profits.
In their comments, business representatives expressed concern with these proposals and provided their own recommendations for improving the state’s business climate. As reported by MarylandReporter.com, these recommendations include:
· Stop debating corporate tax methods every couple of years and come to a solid decision. Dinegar said that a CEO would be unlikely to locate in Maryland if there is anything to indicate the corporate tax structure could completely change in the near future.
· Use money earmarked for education to improve school quality and make graduates more ready to compete in the work place.
· Keep Maryland’s tax rate competitive.
· Don’t do unique things with taxes – like the “millionaires’ tax” – that will give the state bad press among rich and powerful business leaders.
· Institute bi-annual property taxes for corporations; property taxes are often the largest taxes corporations pay.
· Increase the amount of money for tax credits. Burner said that Maryland only allots $6 million for its research and development tax credit – the same amount that was provided for the credit when it was introduced 10 years ago. Now, he said, the money is stretched extremely thin.
· Stay away from combined reporting, which calculates corporate taxes based on how much companies make in all states that they are located, not where they are headquartered. Dinegar said that this would end up hurting the state more than it would help.
· Make a decision on drilling for gas in Western Maryland’s Marcellus shale deposits quickly, before the opportunity is gone.
· Concentrate on the Baltimore harbor as a major East Coast distribution point, especially since imports from China and East Asia can get here easier by boat after the Panama Canal expansion is completed in 2014.