The first wave of legislation to increase business taxes has been introduced in the Maryland Senate. The proposals include combined reporting, “millionaires’ tax,” and a gross receipts tax.
Combined Reporting: SB 269 would alter Maryland’s income tax laws to impose a system of mandatory unitary combined reporting for corporations. The Maryland Chamber has opposed combined reporting for a number of years. Instituting combined reporting would cause huge shifts in tax liabilities among Maryland businesses engaged in interstate commerce. Such a tax change is ill-advised during the current economic climate. The Maryland Business Tax Reform Commission evaluated the state’s business tax structure, and recommended against implementing combined reporting at this time. Maryland’s competitor states do not use combined reporting.
Millionaires’ Tax: SB 249 would reimpose the 6.25 percent personal income tax bracket on taxpayers with a net taxable income of over $1 million. The Maryland Chamber opposes this legislation because this tax falls disproportionately on small business owners, who need to reinvest funds into their companies to create jobs. Raising individual income taxes will make Maryland less competitive on a major tax with which we are over-reliant and uncompetitive. The Department of Legislative Services reports that Maryland has the 2nd highest state and local income tax revenue as a percent of personal income.
Gross Receipts Tax: SB 248 would impose an alternative minimum tax on corporations based on a percentage of their gross receipts. The Maryland Chamber opposes this bill. Gross receipts taxes are unfair because they are not based on profits or an ability to pay, and penalize industries that have high gross receipts but low net margins. Similar legislation was enacted and later repealed in New Jersey due to the negative impact on business. The bill would significantly increase business taxes on Maryland employers.
No hearing dates have been scheduled on these bills, but we will keep you up to date as legislative action progresses. For more information, contact Ron Wineholt at .(JavaScript must be enabled to view this email address).
The Governor’s Health Exchange bill (SB 238/HB 443) was introduced and will be heard by the Senate Finance Committee on February 22. Last session, the Chamber supported legislation establishing the Exchange, but several major issues were deferred for further evaluation. We covered some of the interim work here and here.
This bill addresses several issues relating to the authority of the state Health Benefit Exchange and the future structure of health insurance markets in Maryland. Provisions include:
Establishing requirements for carriers to offer plans in the Exchange and the private market;
Providing licensure or certification for Exchange Navigators;
Allowing brokers to sell policies in the Exchange and private market;
Maintaining separate markets for the individual and small group markets;
Keeping the small group employee size at 50 until 2016; and
Providing a mechanism to establish essential health benefits in 2012.
The Maryland Chamber believes that this bill resolves many of the issues relating to the role of the Health Benefit Exchange and the functioning of the health insurance market in Maryland. We have concerns regarding language in the bill that allows the Exchange to engage in selective contracting. This provision could enable the Exchange to exclude otherwise qualified carriers from competing in the Maryland marketplace and allow the Exchange to set requirements beyond those provided in federal law. The Chamber supports the bill with amendments to address the selective contracting concern.
For more information, contact Ron Wineholt at .(JavaScript must be enabled to view this email address).
Last week we mentioned the provision in the Governor’s Budget Reconciliation and Financing Act (BRFA) (SB 152/HB 87) that would impose the state sales & use tax on the sale of “digital products.”
The Maryland Chamber’s Legislative Committee met with the Governor’s Chief Legislative Officer Joe Bryce to discuss the administration’s agenda earlier this week. During that meeting, Bryce agreed that the language in the bill needs to be clarified. He said that more work would be done to tighten the language, but that it is the Administration’s intent to tax the purchase of canned software and other products that could be bought in a store in a tangible form.
We’ve heard concerns from a number of companies, but we’d like more feedback from members. You can review the language on pages 33 to 42 of the bill. How would this impact your business? Give us your feedback by emailing Ron Wineholt at .(JavaScript must be enabled to view this email address).
The Maryland Health Benefit Exchange announced the formation of the Exchange Implementation Advisory Committee (EIAC). The primary role of the EIAC will be to engage senior business, insurance and technology leaders and leverage their knowledge and experience to help make the exchange successful for all Marylanders.
The Exchange is actively seeking senior IT and Operations executives from organizations that intend to participate as insurance carriers or service providers in the Maryland Health Benefit Exchange or SHOP. These include, but are not limited, to: CIO’s, COO’s, Directors of Architecture, and ACA Program Directors from:
Health Insurance Carriers in the fully-insured Individual and Small Group Markets,
Medicaid Managed Care Organizations (MCOs),
Third Parity Administrators (TPAs),
Insurance Co-Operatives (Co-Ops)
The Exchange will also reserve slots for other stakeholders and technology providers with experience in online user experience, system design and implementation, health industry CMS technology best practices and more.
All ten members of Maryland’s congressional delegation have confirmed their attendance at next week’s Congressional Delegation Dinner. Members of the House of Representative may arrive late because of a vote scheduled that evening, but they all expect to attend. The event will be held on Monday, February 6, 2012, at Martin’s Crosswinds in Greenbelt. The event is nearly sold out, but there are a few spots remaining. Register today!
During this town hall meeting-style event, Maryland’s congressional delegation and Maryland Chamber members will discuss important federal business issues, like the economy, transportation funding, business and environmental regulation, and more. Each member of the delegation will briefly outline priorities and discuss how the delegation works together to get results for Maryland. This is the Maryland Chamber’s fastest growing event. Reserve your seat today.
Registration is $85 per person for Maryland Chamber members. The nonmember rate is $150. Register online or contact Kristen Solis at (410) 269-0642, (301) 261-2858 or .(JavaScript must be enabled to view this email address).
Governor Martin O’Malley proposed applying the state’s sales tax to gasoline as a way to increase transportation funding revenue.
His proposal would phase in the state’s 6 percent sales tax at 2 percent per year for the next three years, with some sort of breaking mechanism to limit the tax if the price of gas spikes. During an interview on WTOP radio, he also agreed that the state should take action to ensure that money raised for transportation funding aren’t used for unrelated purposes.
Chamber President & CEO Kathy Snyder thanked the Governor for his leadership on this important issue and said the organization would review the details of the proposal once the bill is filed, which is expected to happen within the next week.
If you have any questions, contact Allyson Black at .(JavaScript must be enabled to view this email address).
More than 350 business leaders attended Business Day in Annapolis last week. Thank you to everyone who took time away from your busy schedules to join us in Annapolis to learn more about the issues that will dominate the 2012 session and visit your lawmakers.
Members of the Statewide Alliance for Restoring the Trust (START) rallied in Annapolis last week to encourage lawmakers to protect Maryland’s Transportation Trust Fund and increase funding for much needed transportation projects in Maryland.
“By investing in our transportation infrastructure we will create jobs and keep Maryland competitive,” Maryland Chamber President & CEO Kathy Snyder, CCE said.
START is an alliance of more than 50 organizations and businesses created last year to promote many of the recommendation’s of the state’s Blue ribbon Commission on Transportation Funding. Members include the Maryland Chamber, Greater Baltimore Committee, Greater Washington Board of Trade and many others.
The Maryland Chamber believes that transportation infrastructure investments have a positive impact on economic development and quality of life. The business community relies on a reliable transportation network to transport goods and services. We think Maryland should do more to invest in the maintenance and improvement of roads, bridges, highways, ports and rails. That starts by protecting Maryland’s Transportation Trust Fund (TTF) to ensure that transportation dollars aren’t used for unrelated purposes.
The Governor is expected to announce his transportation initiatives soon. We’ll keep you updated. If you have any questions, contact Allyson Black at .(JavaScript must be enabled to view this email address).
Photo courtesy of the Greater Baltimore Committee. View more photos from the rally online here
A provision of the Governor’s Budget Reconciliation and Financing Act (BRFA) (SB 152/HB 87) is drawing increased scrutiny due to its potential impact on Maryland’s technology sector. Pages 33 to 42 of the bill would impose the state sales & use tax on the sale of “digital products.” It’s easy to initially assume that the new language only applies to the listed items of downloaded music, books and e-cards. However, a closer look makes it clear that the language is very expansive and would apply to a vast array of products that are downloaded electronically. Legislative staff has confirmed the expansive interpretation. The Comptroller’s staff told the House Ways & Means Committee last week that they need to look at the language more closely to determine its impact.
We will work to ensure that this issue does not become a repeat of the 2007 Tech Tax, which threatened to cripple Maryland’s technology businesses. For further information contact Ron Wineholt at .(JavaScript must be enabled to view this email address).
We don’t often hear Senate President Miller, House Speaker Busch, and Minority Leaders Pipkin and O’Donnell all agree on legislative issues. But we heard it twice yesterday morning during a Q&A session at the Chamber’s Business Day in Annapolis event. All agreed that we would not see changes this session to the state’s minimum wage, living wage, and prevailing wage laws. More importantly, all four leaders agreed that it would be a bad idea to put sunset termination dates on the state’s job creation tax credit programs. For further information contact Ron Wineholt at .(JavaScript must be enabled to view this email address).
Governor O’Malley’s proposed FY 13 state operating budget was introduced into the Senate and House today, along with a Budget Reconciliation and Financing Act (BRFA) that will implement major finance and tax law changes needed to fund the budget. Here are some early observations based on the information currently available:
The total state budget grows by about 2% to $35.5 billion. Total FTE state positions grow by 123 to 79,244.
Significant program funding changes and new taxes are proposed to reduce the state’s ongoing $1.1 billion general fund budget gap by $656 million.
Counties would relieve the state of $239 million of pension costs for teachers, while receiving some offsetting new revenues.
$311 million in new state revenues are proposed, including $182 million in increased state individual income taxes (and $111 million in local income taxes) resulting from phasing out the personal exemption and deductions above certain income levels. This will increase taxes for Maryland businesses taxed as pass through entities and add to Maryland’s comparatively high effective individual income tax rates.
The state would attempt to require out of state vendors to collect $21 million in sales tax, despite the Comptroller’s advice that “there is no certainty of a substantial revenue increase” from such legislation.
Increased revenues are estimated from tax increases on certain tobacco products, Maryland-mined coal, digital downloads of software, and telecommunications companies.
$40 in increased real estate recordation taxes would be authorized for counties.
Here is the Budget Highlights document. For further information contact Ron Wineholt at .(JavaScript must be enabled to view this email address).
The Maryland Chamber will hold its annual Maryland Congressional Delegation Dinner on Monday, February 6, 2012, at Martin’s Crosswinds in Greenbelt. During this town hall meeting-style event, Maryland’s congressional delegation and Maryland Chamber members will discuss important federal business issues, like the economy, transportation funding, business and environmental regulation, and more.
Each member of the delegation will briefly outline priorities and discuss how the delegation works together to get results for Maryland. This is the Maryland Chamber’s fastest growing event. Reserve your seat today.
Registration is $85 per person for Maryland Chamber members. The nonmember rate is $150. Register online or contact Kristen Solis at (410) 269-0642, (301) 261-2858 or .(JavaScript must be enabled to view this email address).
Gain visibility before an influential business audience by serving as a Congressional Dinner event sponsor. For more information, contact Jan Krueger at (410) 269-0642, (301) 261-2858 or .(JavaScript must be enabled to view this email address).
If you are signed up for Business Day in Annapolis tomorrow, January 19, at the Loews Annapolis Hotel, here are a few last minute reminders.
The event will begin at 7:30 a.m. at the Loews Annapolis Hotel, with a plated breakfast. Congressman Chris Van Hollen will speak at 8:30, following by the Maryland General Assembly’s presiding officers and minority leaders at 9 a.m.
Following the program, members can head over to the State House and legislative offices to take in the session and visit their lawmakers. The two houses will go into session at 10 a.m., but it shouldn’t last too long. If you haven’t done so already, call ahead and make appointments to visit your state senator and delegate(s). Lawmakers are eager to hear from business people in their district.
To identify your lawmakers click here. Enter your address and then scroll down to the “Your State Elected Officials” section. You’ll find your state senator and delegate(s) listed below Attorney General Douglas Gansler. Click on the profile link next to their name to access their contact info.
At 10:30 a.m., we will also lead a small group of business people over to the Goldstein Treasury Building to meet with Comptroller Peter Franchot. If you are interested, stay at the Loews after the briefing and Vice President Ron Wineholt will lead the group to the Comptroller’s office.
Reminder: You’ll Need a Photo ID to Get Into State Office Buildings
Here is a map, with the Loews Annapolis Hotel, State House, legislative office and comptroller’s office buildings marked. You can park at the hotel, but I’ve also marked Annapolis parking garages on the map for your convenience.
Join the members of START (Statewide Transportation Alliance To Restore the Trust) for a rally in Annapolis at 2 p.m. on January 19 to urge lawmakers to protect and enhance transportation funding.
The Maryland Chamber and many of its local business allies participate in the coalition, and continue to urge state lawmakers to protect Maryland’s Transportation Trust Fund (TTF) and increase transportation funding. START believes that Maryland must act this year to:
The 2012 Session of the Maryland General Assembly begins today with some very difficult decisions facing the legislature. A billion dollar budget shortfall coupled with anticipated federal budget cuts will mean few new projects can be brought home to districts when dollars are so tight. Yet we need to do more to create and retain more high paying jobs in Maryland and improve our infrastructure.
Do you have ideas on how the legislature can do that? Here are a few ways Maryland Chamber members can easily get involved with issues that will be debated in Annapolis this session:
Visit, or at least call, your state senator and delegates to let them know first-hand how your business is faring in the economic recovery. Many of them don’t have their own businesses so your input truly would help them learn, from an employer’s perspective, what it will take to hire more people at your location. Creating and retaining more jobs in Maryland is key to our recovery – and business people must share their expertise and viewpoints with decision makers to help them make the right choices. If you don’t know who your legislators are or how to reach them, use this website.
Join more than 300 business leaders from throughout the State at the Maryland Chamber’s Annual Business Day in Annapolis at the Loews Annapolis Hotel on January 19 to learn what big issues will be debated. Congressman Christopher Van Hollen will speak after breakfast about the federal budget. Senate President Mike Miller and Minority Leader E.J. Pipkin and House Speaker Michael Busch and Minority Leader Tony O’Donnell will present their positions on issues like the state budget, taxes, workplace regulation, transportation funding and cleaning up the Chesapeake Bay. Learn More
Visit our legislative blog to learn about the issues that impact employers. The daily write ups and videos keep you informed about the issues that impact our economy and your bottom-line. If you’d prefer to receive the updates via email, sign up here.
Interested in what is happening on Capitol Hill? Join us again Monday, February 6 at Martin’s Crosswinds in Greenbelt for our Annual Maryland Congressional Delegation Dinner. Both US Senators and all eight Representatives have been invited to attend this town hall styled discussion of issues important to Maryland’s business community. Learn More
Each of us must take a few minutes to pay attention to the ideas and proposals offered by our legislative officials in Annapolis over the course of the next few months. They want to help Maryland overcome the recession and will debate issues with information they have available. Your viewpoints should be part of that discussion.
Posted by Kathleen T. Snyder, CCE on 01/11 at 01:42 PM
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