Some think of taxes when considering whether a business climate is positive or leaves room for improvement. In Maryland, this holds true – the tax climate does affect business competitiveness and is one factor a business considers when making moving or expansion decisions. The GBC agrees that the tax climate is an important consideration when assessing Maryland’s climate for competitiveness along with a numerous factors including workforce, public safety, education and transportation.
In Annapolis, the question of tax climate is an important one. What legislators do during the 90-day session of the Maryland General Assembly has an impact on business competitiveness. For these reasons, it is important to see where things stand in regard to tax policy.
The 2019 session has no shortage of tax-related legislation. The GBC has supported proposals to incrementally lower Maryland’s corporate tax rate, which were increased during the 2008 session to 8.25 percent. This rate is not competitive in the region. Our largest competitor, Virginia, has a corporate tax rate of 6 percent. There is legislation to lower the personal income tax rates as well. Unfortunately, legislation is also pending to implement combined reporting for corporations, which the GBC strongly opposes.
Tax policy can also be used to influence behavior. There are pending proposals that ascribe tax advantages for military retirees, first responders, internships and businesses that provide sick leave and parental leave. Others bills seek to provide tax advantages related to economic development, including proposals that affect tax credits for cybersecurity, research and development, job creation, federal Opportunity Zones and manufacturing.
The GBC has supported a number of these proposals, related to business growth and economic development. For the remainder of the session and beyond, the GBC will advocate for a fair and stable tax structure and any measures that improve the State’s competitiveness.