MACo Executive Director Michael Sanderson testified in support of SB 766, Local Income Tax – Overpayments and Underpayments – Local Reserve Account Repayment, to the Senate Budget and Taxation Committee on March 14, 2016.
This bill establishes a process to reconcile local income tax distributions when a county or municipality receives an underpayment or overpayment of those distributions. If a jurisdiction is reimbursing the Comptroller’s Office pursuant to the Wynne Case (Maryland State Comptroller of the Treasury v. Brian Wynne) as required by Chapter 489, Acts of 2015, repayments would begin after final payments associated with this case.
At the hearing, Mr. Sanderson said “we mostly need certainty… especially as the Wynne refunds are such a large factor with our income tax right now.”
From the MACo testimony,
Under current law, the local income tax reserve account (account) is used to manage income tax payments and distributions to counties and municipalities, but there is not one set process to address the under payment or over payment of local income tax distributions.
SB 766 has been introduced to address the recent situation in Montgomery County, but also specifies a set process to be followed should underpayments and overpayments occur in the future.
For more on 2016 MACo legislation, visit the Legislative Database.