According to a new
from the Tax Foundation,
Maryland is among the 10 worst states for business tax climate.
This report did not examine the specific taxes businesses and individuals pay but focused on regulations and administrative burdens that Marylanders face. Wyoming was ranked No. 1; New Jersey is No. 50.
Another leading financial publication,
, found that
Maryland was the least tax-friendly state in the union for residents
. Kiplinger based this conclusion on not only the tax structures in place, but also the municipal and county taxes allowed in the state, which can add 3.2 percent to total tax liability.
For years, the Maryland Chamber of Commerce has advocated for tax reductions to spur business development and job growth. Among last session’s successes, we supported research & development and biotechnology income tax credits. We also helped get interest rate deductions on tax deficiencies and refunds. Plus, we supported some tax exemptions for business owners transferring from sole proprietorship to limited liability companies. All of those bills are or will be law.
Of course, taxes are still a hot topic here and nationally.
Here’s what we know about the talk of tax reform in Washington:
On Thursday, the U.S. Senate passed a budget resolution allowing the eventual tax reform vote to proceed via reconciliation. Reconciliation is a legislative procedure that allows the Senate to bypass certain rules, most notably the filibuster. Effectively, it lets the Senate pass a budget without a single Democrat voting in favor.
Although no one has introduced a bill yet, several members of Congress have been debating provisions in the White House’s guide to tax reform.
a 20-percent federal corporate tax rate;
maximum 25-percent tax rate on business income from small and family-owned companies;
elimination of the estate tax;
and allowing businesses to immediately expense the cost of investments in depreciable assets for at least five years.
A key point:
The White House’s plan would also eliminate deductions for state and local taxes. According to the Maryland Department of Legislative Services,
this elimination would add about $2,300 per year on average to Marylanders’ tax liability.
We have stressed to our federal partners and representatives that they must protect Marylanders from this effective tax increase by keeping the deductions in place.
The next step may involve bypassing a conference committee on the Senate’s resolution. That would let federal lawmakers move straight to tax negotiations in the coming weeks.
We welcome your feedback
on what the proposal would mean for you. Thank you for supporting us as we advocate for Maryland business.