Key General Assembly committees are considering false claims legislation that was narrowly defeated on the Senate floor last year. The bills (SB 279/HB 525) would authorize a person to file suit on behalf of the state for an alleged false claim and recover up to 30 percent of the proceeds of the suit, plus attorney’s fees and costs.
The Maryland Chamber opposes this bill because it would add duplicative new layers of penalties for offenses that are already illegal under existing state and federal law. Existing state law provides for the collection of triple damages for persons attempting to defraud the state, with felony sanctions and imprisonment for egregious cases. These state laws are supplemented by the federal False Claims Act that already provides an avenue for individuals to file suit on behalf of the federal government for alleged false health claims and receive a share of the recovers.
The Maryland Chamber believes that duplicating the federal law at the state level will increase the number of lawsuits without assuring any increase in fraud recoveries. By increasing lawsuits against health care providers, it would drive up health care costs for employers and further limit access to health care in Maryland.
“It’s the state’s job to enforce state law,” Maryland Chamber Vice President of Government Affairs Ron Wineholt said. “We support vigorous enforcement of existing law, but we do not endorse the creation of a new private cause of action at the state level for individuals to pursue these claims.”
Key committees of the Maryland General Assembly are considering legislation that would impose a system of mandatory unitary combined reporting for corporate income taxes in Maryland.
Corporations doing business in Maryland are currently taxed based on their payroll, property and sales in Maryland. Combined reporting arbitrarily assigns income to Maryland for all members of a corporate unitary group – even for those corporate entities having no presence in the state.
The Maryland Chamber has opposed combined reporting legislation for a number of years. States that have adopted combined reporting have found that it results in massive shifts of tax liability between businesses, with many paying more taxes and many paying less. We believe it’s important to analyze the winners and losers of such a tax change and the impact on Maryland’s economy.
The Maryland Business Tax Reform Commission was created by the Governor and General Assembly during the 2007 special session to examine how businesses are taxed in the state. The commission is studying a variety of issues including combined reporting, apportionment, tax credits, tax exemptions and more. The Maryland Chamber is represented on the commission by our State Taxation Consultant Karen Syrylo, CPA. The group is scheduled to provide its recommendations to the General Assembly in December 2010.
During recent public hearings, Maryland Chamber Vice President of Government Affairs Ron Wineholt urged lawmakers to allow the Maryland Business Tax Reform Commission to complete its work before considering legislation to change the state’s approach to corporate taxation.
“The Commission should be allowed to evaluate another year of tax data and report back this December without having this issue prejudged by the General Assembly,” Wineholt said.
This is a priority issue for the Maryland Chamber. You can learn more the bills and access the Chamber’s position statements online here. For more information, contact Ron Wineholt at .
The House Ways & Means Committee heard legislation last week that would give many small businesses the option to pay their property taxes in two installments. Maryland Chamber Vice President of Government Affairs Ron Wineholt urged the committee to support the bill.
“Many small businesses are experiencing difficult cash flow problems as sales decrease and customers disappear. Allowing small business owners to pay their property taxes in two installments, just like homeowners, could be a significant help to some businesses.”
Since 1995, homeowners have had the option to pay their real property taxes in two installments - one half by September 30 and one-half by December 31. The General assembly provided this payment plan option to homeowners recognizing that some property owners had difficulty paying their taxes in one lump sum. More than 30 states allow all real property owners to pay their property taxes in installments. In these tough economic times, the Maryland Chamber of Commerce believes extending the semiannual payment option to small businesses would make a lot of sense.
The bill, HB 484, would allow owners of commercial real property with an annual property tax bill of less than $50,000 to pay their property tax in semiannual payments. Last year, the bill died without a vote in the Ways & Means Committee. This year, it’s back, with broad bipartisan support and 20 additional sponsors.
We’d like to know what you think about it. Would this option be helpful for your business? Give us your feedback by completing the poll below or contacting Ron Wineholt at .
The Senate Finance Committee approved the amended unemployment insurance bill yesterday by a unanimous 11-0 vote (pdf).
“The Maryland Chamber thanks Chairman Mac Middleton and the entire Finance Committee for all their hard work,” Maryland Chamber President/CEO Kathy Snyder, CCE said. “We also thank our Unemployment Insurance Subcommittee Chairman Ron Adler and our Vice President of Government Affairs Allyson Black for working hard to get our concerns addressed.”
The Maryland Chamber supports the bill, which was amended to address a number of our concerns. The legislation will now be considered by the full Senate.
The Daily Record reported yesterday that House Economic Matters Committee Chairman Derek Davis said that he would move the Senate version of the bill, which he thinks is a good compromise.
Maryland Chamber Vice President of Government Affairs Ron Wineholt last week urged the House Ways & Means Committee to oppose legislation that would require Maryland employers to annually notify employees who may be eligible for the earned income credit.
The bill, HB 755, would require the Comptroller to annually publish the maximum income eligibility for the state’s earned income credit and a notice to employees regarding the federal and state credits. Employers would be required to identify employees who may be eligible for the credit and provide them with a copy of the comptroller’s notice.
The Maryland Chamber opposes the bill because it is the responsibility of the state, not employers, to identify individuals potentially eligible for the earned income credit.
In order for an employer to know if an employee may be eligible for the credit, the employer would need to know information about information about qualifying factors, including:
Adjusted gross income for the family.
The employee’s income tax filing status.
The number of the employee’s “qualified” children.
“An employer attempting to comply with this bill would have to make a choice,” Wineholt said. “Do they provide copies of the notice to every employee in the company, or do they identify and notify only those employees below certain wage levels who may qualify for the credit? Either option is a bad choice for the employer due to the time, costs and privacy issues involved.”
We’ve heard concerns from a number of members and local chambers of commerce about the new stormwater runoff regulations set to take effect in May 2010.
There have been several bills introduced this session to address the concerns. Stakeholders continue working to develop a compromise to deal with redevelopment projects and to grandfather projects in the pipeline seeking final approval.
Here is a video update from Katie Maloney of the Maryland State Builders Association, who Co-Chairs the Maryland Chamber’s Environment Committee:
The Senate Finance Committee will hear the shift break bill next Wednesday, March 10. The bill would require retail establishments with 50 or more employees to provide a 15 minute break after four consecutive hours of work or a 30 minute break after six consecutive hours of work.
Similar legislation was introduced last year. The Maryland Chamber opposed the bill, arguing that a one-size-fits-all shift breaks mandate could have unintended consequences, particularly as it relates to emergency situations and flexible work arrangements.
If this is an issue that concerns your business, let us know. Contact Allyson Black at .
Here are a few news links regarding the amended unemployment insurance bill, which the Maryland Chamber supports. Senate Finance Committee Chairman Thomas McLain (Mac) Middleton (D-Dist. 28) said the committee could vote on the bill as early as today.
The Maryland Chamber of Commerce announced today that it will support the unemployment insurance compromise developed by the Senate Finance Committee, with the help of the Unemployment Insurance Oversight Committee.
“We thank the Senate Finance Committee, the Unemployment Insurance Oversight Committee and representatives from the administration for working to address our concerns,” Maryland Chamber President/CEO Kathy Snyder, CCE said. “Our goals have been to give employers payment plan options, offset the cost of any unemployment insurance system changes and ensure the long-term health and stability of the unemployment insurance trust fund. This bill accomplishes those goals.”
The Chamber strongly supports the payment plans and reduced interest rates included in the bill. The payment plans will help Maryland employers spread the cost of increased unemployment insurance taxes over the course of the year. Unemployment insurance taxes are calculated based on the first $8,500 of taxable wages. Without this option, the weight of the unemployment insurance tax increase will hit many businesses especially hard in the first quarter.
As introduced, the bill would increase benefits and eligibility in order to make the state eligible for $126.8 million of federal stimulus funds. The long-term cost of the proposed changes is estimated at $18.4 million to $19.4 million per year. The changes include:
Adopting an Alternative Base Period, adjusting how the state determines a claimant’s monetary eligibility and employer charges.
Providing 26 additional weeks of UI benefits to people enrolled in job training.
Making adjustments to the existing law allowing benefits for part-time workers.
The amended bill includes $18.2 million to $19.5 million in annual reductions to offset the cost of the benefit increases needed to make the state eligible for the federal stimulus funds. Offsets include:
Elimination of sick claims.
Increasing the minimum weekly benefit.
Increasing penalties for misconduct and gross misconduct.
Decreasing disregarded wages.
The amended bill also keeps the tax tables at table F, rather than moving to table E. This will help the state build up the unemployment insurance trust fund faster. The original bill used much of the federal stimulus funds to provide employers with a small one-year rate deferral. While deferring a small portion of the unemployment insurance tax increase may sound appealing, the Chamber believes it would weaken the unemployment insurance system and ensure that Maryland employers pay higher rates for a longer period of time. By dedicating the federal funds to the trust fund, and remaining at Table F, the amended bill takes the first step towards rebuilding the trust fund and reducing unemployment insurance tax rates for all Maryland employers.
The Maryland Chamber testified in opposition to legislation (SB 312) that would prohibit an employer from using an applicant’s credit report or credit history when making hiring decisions at a Senate Finance Committee hearing last week.
The Fair Credit Reporting Act, Uniform Guidelines on Employee Procedures, Federal Bankruptcy Act, as well as other Federal and Maryland laws already protect applicants and employees and regulate this issue.
Additionally, the legislation limits flexibility needed by employers to use a variety of factors to determine the best candidate for a position, particularly positions that require an employee to handle cash or financial information.
For more information about SB312/HB175, contact Allyson Black at .
Posted by Krysten Appelbaum on 03/01 at 10:56 AM
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The Maryland Chamber of Commerce opposes legislation (SB 354) that would impose a system of mandatory unitary combined reporting for corporate income taxes effective next year.
Current law requires corporations doing business in the state to be taxed based on their payroll, property and sales in Maryland. Combined reporting arbitrarily assigns income to Maryland for all members of a corporate unitary group – even for those corporate entities having no presence in the state.
The Chamber has opposed combined reporting legislation for a number of years. States that have adopted combined reporting have found that it results in massive shifts of tax liability between businesses, with many paying more taxes and many paying less. We believe it’s important to analyze the winners and losers of such a tax change and the impact on Maryland’s economy.
During the 2007 special session, the Governor and General Assembly created the Maryland Business Tax Reform Commission to evaluate the merits of combined reporting and other changes to Maryland business tax structure. The commission has worked hard and will provide lawmakers its recommendations in December 2010. The Maryland Chamber believes the General Assembly should let the commission finish its work.
“The commission should be allowed to evaluate another year of tax data and report back this December without having this issue prejudged by the General Assembly,” Maryland Chamber Vice President of Government Affairs Ron Wineholt said.
The bill would dedicate the proceeds of these tax levies to fund state employee and teacher pensions. The Maryland Chamber believes state employee pension costs are a big problem, but this tax policy change is a poorly-timed, ill-advised solution.
Wineholt encouraged lawmakers to explore options for transitioning away from the unsustainable cost of defined benefit pensions. “Employers should not be asked to fund a level of pension benefits for public employees that they cannot afford to provide to their own employees,” Wineholt said.
The Maryland Chamber supports legislation (SB 264) that would make a semester-long course in financial literacy a graduation requirement in Maryland public schools.
“It is important that young adults have financial literacy skills in order to successfully cope with credit, debt and household finances,” Maryland Chamber Vice President of Government Affairs Ron Wineholt said. “With record numbers of foreclosures and personal bankruptcies, we must do more to encourage individuals to responsibly manage their finances. We believe a mandatory course in financial literacy is an important step in the right direction.”
This bill would require the State Board of Education to develop curriculum content for a semester-long course in financial literacy. Each local board of education must implement the curriculum in every high school under the board’s jurisdiction, and a student must complete the course in order to graduate from high school.
The Senate bill is being heard today. The House version (HB 764) will be heard next week. For more information, contact Ron Wineholt.
Posted by Will Burns on 02/24 at 02:55 PM
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Dr. Daraius Irani of Towson University’s Division of Economic and Community Outreach gave his annual economic forecast for the region at the 2010 RESI Economic Outlook Conference last week.
Irani said that while there have been signs of recovery within the economy, progress is being made much slower than one would hope.
Irani said Maryland currently has historically high levels of unemployment, a problem that is made worse by high levels of underemployment; that is, workers who are employed, but not at their desired capacity in terms of compensation, hours, experience, skill level, etc. He said the current underemployment rate in Maryland stands at 12 percent, and 17.3 percent nationally.
Job losses have been particularly heavy in the construction, manufacturing, finance, retail and transportation industries, but growth has been seen in the health and education sectors as well as the federal government—three industries that have a strong presence in Maryland. Irani said indications that federal jobs and health sector jobs will grow, as well as the expected job growth caused by BRAC, give a good outlook for economic recovery in Maryland.
Additionally, indicators in the real estate market and in consumer spending show that there are signs of life, but a full recovery may be some time off.
Here is a brief video recap of Irani’s presentation. You can download a PDF of his presentation here.
Posted by Krysten Appelbaum on 02/24 at 02:32 PM
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The Maryland Chamber’s Business Development Council will hold its next educational and networking event on March 3, from 8 a.m. to 10 a.m., at Loyola University Graduate Center in Columbia. Attend this event to learn more about managing risk, fraud and cyber security.
Our expert panel will address how your business can manage and minimize corporate risk from a tax, financial and IT security perspective. Topics for discussion include fraud and internal controls, tax obligations and “forgotten” taxes like payroll and unemployment, nexus and audit issues, cyber security and network controls. Learn more about this critical topic and discuss what you learn with likeminded business people during this interactive seminar. Speakers include:
Moderator: Kelly Setzer, Senior Vice President, Bank of America
Joel Charkatz, Shareholder, KatzAbosch
Mike Dillon, President, Dillon Tax Consulting
Doug McNitt, General Counsel & Secretary, Sourcefire
Registration is $35 per person for Maryland Chamber members. $50 per person for nonmembers. Register online or contact Gail Lemke at (410) 269-0642, (301) 261-2858 .
The Senate Budget & Taxation Committee this week approved an amended version of Governor Martin O’Malley’s legislation to provide a tax credit to Maryland employers who hire an unemployed Maryland resident during 2010. The bill was amended to increase the amount of the credit from $3,000 to $5,000. The committee vote was a unanimous 15-0.
The Maryland Chamber thanks the committee for its work on this issue. Chamber Vice President of Government Affairs Ron Wineholt urged the committee to increase the credit to $5,000 during its February 2 hearing. “Employers must weigh the benefit of a one-time $3,000 credit against the ongoing costs of a new employee, as well as the paperwork, time and possible audits that would result from seeking a tax credit certification through DLLR. Therefore, we suggest that the hiring incentive be increased by raising the maximum credit amount to $5,000 per new hire,” Wineholt said.
The amended bill, SB 106, would provide a $5,000 income tax credit to employers that hire an unemployed Maryland resident during calendar year 2010 into a full-time position that is new or has been vacant for at least 6 months. Employers would obtain certification for the credit by submitting required documentation to DLLR, and claim the credit when filing their income tax return. If the employee works less than a year the credit would be pro-rated. Total credit amounts are capped at $250,000 per employer and $20 million for the total program.
The legislation will now be considered by the full Senate. If you have any questions, contact Ron Wineholt at .
