Maryland to Waive Penalties, One-Half Interest During Two-Month Amnesty Period

The Bloomberg BNA Tax Management Weekly State Tax Report filters through current state developments and analyzes those critical to multistate tax planning.

By Steven Roll

Maryland will waive penalties and one-half of the interest that would otherwise apply to delinquent tax debts paid from Sept. 1 through Oct. 30. [S.B. 552, enacted 5/7/09]

The amnesty period applies to the following types of state or local tax debts that arose on or before Dec. 31, 2008:

• income tax,
• withholding taxes,
• sales and use taxes, and
• admissions and amusement taxes.

S.B. 552 specifies that penalties for nonreporting, underreporting and nonpayment will be waived during the amnesty period. Also, participating taxpayers will not be subject to criminal charges arising from any return filed and paid during the amnesty period.

The Comptroller may enter into a payment agreement with a taxpayer that reports but is unable to pay a delinquent tax debt during the amnesty period, the legislation states.

Limitations of Amnesty Program

The amnesty program under the legislation is not available to any taxpayer that:

• as of Sept. 1, has more than 500 employees in the United States or is a member of a corporate group that has more than 500 employees in the United States;
• participated in the 2001 amnesty program; or
• was eligible for the settlement period in 2004 offered to company's with unpaid tax liabilities resulting from transactions with an intangible holding company.

The legislation takes effect June 1.

The full text of the Maryland measure is available on the Internet at http://mlis.state.md.us/2009rs/bills/sb/sb0552e.pdf.