Overview
Level The Playing Field
Loopholes in Maryland’s tax code allow mostly out-of-state businesses to avoid their fair share of taxes. As a result of this loophole, in-state businesses are playing on an uneven field, competing against multi-state companies that use high-priced, sophisticated accountants and complex transactions with subsidiaries to avoid paying their fair share. While currently legal, some multi-state businesses can shift their Maryland profits to out-of-state subsidiaries to avoid paying taxes here; while businesses located only in Maryland cannot take advantage of these loopholes or other tax shell games.
Businesses should thrive based on their efficiency and innovation, not their opportunities for ‘creative’ tax accounting and tax avoidance.
With a $1.5 billion budget deficit, making corporations pay their fair share of taxes not only makes good fiscal sense, it’s also the right thing to do. Over 60 percent of corporations that do business in Maryland don’t pay a penny in Maryland taxes. This leaves taxpayers—both businesses and individuals—to foot the bill for vital services including transportation, education, and public safety.
This tax loophole should be closed. Combined reporting requires companies with subsidiaries and affiliates to file taxes in a single combined report and then apportions taxes according to the combined group’s in-state business activity.
