SB 590, which would mandate local governments to provide a personal property tax exemption for businesses with personal property of a total assessed value of $10,000 or less, passed the Maryland Senate last week after being amended to include an audit of personal property tax returns. The bill’s passage as amended has become questionable now that state leaders have gained a better understanding of the full extent of the audit provision.
As reported by the Baltimore Sun,
The transformation — achieved through a unanimous vote of the Maryland Senate this week — undercuts the Republican governor’s pro-business message by tying a $72 tax break for tiny firms to a widespread audit of personal property tax returns filed by the state’s largest companies.
“It’s the Robin Hood effect: Take from the big business and give to the small,” House Speaker Michael E. Busch, a Democrat, said of the Senate action. He said he expects the state’s business community to vociferously object.
The Administration has also raised concerns.
Hogan’s spokesman and senior staffers said they were aware the audit provision was added to the bill by a Senate committee, but at the time they did not realize its effect. They said they don’t support forcing companies to undergo audits.
“We’re concerned about what kind of other stresses it would put on businesses in Maryland,” said Hogan spokesman Doug Mayer.
Senator Richard Madaleno, Vice Chair of the Senate Budget and Taxation Committee, explained the Senate’s intent in the article.
…the panel’s intention was clear: If Hogan wanted a tax break for some businesses, the state needed to be sure it was appropriately collecting taxes on the rest.
MACo opposed SB 590 and its House crossfile, HB 480, stating that incentives and reductions in local tax rates or bases should be a local decision, not one mandated by the State