Maryland Gov. Wes Moore and the General Assembly are entering decision time on whether to impose a highly complex and volatile tax policy called combined reporting. Four bills currently under consideration could make this anti-business tax policy law.
Advocates for combined reporting argue that it closes a corporate tax loophole — suggesting that corporate scofflaws are hiding profits in subsidiaries in low corporate tax states to avoid paying Maryland corporate taxes.
In reality, combined reporting reshuffles corporate taxes among all corporations doing business in Maryland. That means that some will pay less taxes and some will pay more, and whether a business pays more or less depends on factors that have nothing to do with tax avoidance.
By its nature, combined reporting brings in out-of-state profits and losses, which explains why some corporations pay less taxes and some pay more. And in economic downturns, combined reporting often leads to state tax revenue losses.
In 2013,…
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