MACPA's State Tax Committee meets with Maryland Unemployment and the State Department of Assessments and Taxation

By Cindie Rosenzweig, CPA, MS
Hertzbach & Company, P.A.
MACPA State Taxation Committee

On Oct. 11, 2000, the MACPA State Tax Committee had its annual liaison meeting with the Office of Maryland Unemployment Insurance (Maryland Unemployment) and the State Department of Assessments and Taxation (SDAT). Dennis Morton, director of the Contributions Division of the Office of Unemployment Insurance, represented Maryland Unemployment. Edward Muth, program manager of the Personal Property Division of the State Department of Assessments and Taxation, along with several members of his staff, represented the SDAT.

The meeting started with Maryland Unemployment indicating that the economy in Maryland continues to be strong. Growth in employer accounts has been consistent for several years. There will be no surcharge in 2001 because the unemployment trust fund is adequately funded. Maryland Unemployment did point out that despite the current good economic news, just a little less in the trust fund could have created a surcharge for 2001.

Maryland Unemployment had several reminders and recommendations for employers and preparers. First, Maryland Unemployment prefers that the Department's preprinted forms be used to file the quarterly unemployment reports as computer generated reports tend to create problems. Filing of the quarterly reports can be done over the Internet. The password for Internet filing can be found on the preprinted unemployment return. Preparers may call to get a client's password to file on the Internet. At this time, there is no provision for electronic payments. No wage returns can be filed by telephone.

Employers are to be reminded to always answer a request for separation information. Timely answering of this form can only help an employer in an unemployment claim as well as avoid penalties. When the employer receives the rate notification in January, it is too late to question the rate calculation based on unemployment claims. Mr. Morton stressed the importance of keeping proper personnel records documenting disciplinary actions and warning as well as documented grounds for terminating an employee to mitigate unemployment claims being charged against an employer's account.

Maryland Unemployment encourages new employers to use the Comptroller's Web site (http://www.marylandtaxes.com) to file the Combined Registration Form. Maryland Unemployment also encourages employers to communicate with them via e-mail.

SDAT wants the business community to know that the department is committed to finding businesses that are not properly filing Tangible Personal Property Returns. SDAT has implemented a discovery program to locate Tangible Personal Property non-filers, and is looking at Combined Registration Forms and IRS tapes in their effort to locate non-filers.

SDAT encourages non-filers to voluntarily come forward before receiving any notification from the department. If a business comes forward voluntarily, the 20 percent penalty for not filing will be waived, only one late filing penalty will be charged, and the department will require filing of only the current year plus three years. Once a taxpayer receives a discovery questionnaire from SDAT, it is too late for that taxpayer to qualify for a voluntary disclosure program.

Remember a sole proprietor with a home-based business and tangible property, including inventory, of less than $10,000 is exempt from Tangible Personal Property Tax. An initial return declaring the exemption must be filled out. Only the declaration must be completed and the return signed to claim the exemption. For the following years, a return will not be required unless the exemption no longer applies.

Taxpayers are reminded to fill out the proper application to claim any personal property exemptions. An exemption from income tax is not an automatic exemption from personal property tax. Also, certain manufacturing equipment and research and development equipment is exempt. The proper application must be completed and approved by the department to claim the exemption.

The State Taxation Committee wishes to express its appreciation to both Maryland Unemployment and SDAT for taking the time to prepare and for meeting with us. As always, the meeting was informative and gives us a chance to meet personally with the representatives of the departments and discuss issues that concern all of us in an informal setting. Thank you to all who participated in the liaison meeting, and we look forward to the continued working relationship the State Taxation Committee now enjoys with Maryland Unemployment and SDAT.

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