Maryland Tax Amnesty And Other Highlights From The 2015 Maryland Legislative Session

Last week, the Maryland General Assembly wrapped up its 2015 legislative session. From a tax perspective, it was a relatively quiet term. Nevertheless, a few bills were enacted that taxpayers should be aware of.

Tax Amnesty Program to Kick Off Fall 2015 The Maryland General Assembly passed legislation to enact a tax amnesty program that will run from September 1 to October 30, 2015. Under the program, the Comptroller will waive all civil penalties and one-half of any interest for taxpayers who failed to file a return required or pay a tax imposed on or before December 31, 2014. The program is applicable to personal and corporate income, withholding, sales and use, and admission and amusement taxes. Any taxpayer that was granted amnesty under a Maryland tax amnesty program between 1999 - 2014 or that was eligible for the July 1 - November 1, 2004 settlement period for tax years prior to 2003 (which was aimed at intangible holding companies) cannot participate in the 2015 amnesty program. Taxpayers should take note that, unlike amnesty programs in some other states that prohibit taxpayers from participating in an amnesty program if they are under audit or have otherwise been identified by the tax agency, the legislation approving Maryland's amnesty program does not include such a limitation. Thus, all taxpayers with potential or definite Maryland tax liabilities should consider the amnesty program even if they have current audits, or assessment appeals pending before the Comptroller's Office. The most recent amnesty program (which occurred in 2009) generated $38.9 million for the state.1

(New?) Sales Tax on Online Travel Companies Maryland enacted legislation that subjects online travel companies to the state's sales tax.2 The legislation amends the definition of "vendor" for sales tax purposes to include an "accommodations intermediary," which is defined as a person, other than an accommodations provider (e.g., hotel operator), who facilitates the sale or use of an accommodation and charges a buyer the taxable price for the accommodation, but does not provide the actual accommodation.

Under the new law, an accommodations intermediary is required to collect and remit sales tax on the full price the consumer pays the intermediary, whereas current practice among most online travel companies is to collect sales tax on the discounted rate the online travel company pays the hotel.

The legislation has been characterized by the legislature as a...