JANUARY 25, 2018
Getting Ready for CPA Day 2018
Resources for you to easily make the biggest impact.
Register to Attend
(*includes 2-hour complimentary CPE)
• Your Guide For Talking With Legislators »
CPA vs. Accountant? Let’s spell it out.
In Maryland, CPAs are required by law to:
CPAs in Maryland must:
As financial service professionals, CPAs:
The Maryland Association of Certified Public Accountants is a membership organization with nearly 10,000 CPA members. Our members serve thousands of business clients in Maryland. We strongly oppose legislation that would impose sales and use tax on services, because it would have a direct negative impact on the Maryland businesses and consumers.
According to the fiscal note on a previous similar bill, “This bill will have a substantial effect on small businesses that provide or purchase the services on which the sales tax is imposed. Small businesses that purchase these services will either pay more for these services, lowering profits or causing a reallocation of other spending decisions, or will purchase smaller quantities of these services. Small businesses providing these newly taxable services will experience losses in sales for the reasons noted above. The amount of such losses will vary and cannot be reliably estimated at this time.”
The biggest obstacle to implementing a sales tax on professional services relates to the difficulty in administering the tax. This complexity exists for both the State and taxpayers. The multi-state nature of both the customers and the taxpayer in many instances make it difficult to determine where the service takes place. The following example illustrates this complexity:
A CPA travels to several states to provide tax, consulting or other services to a client that does business in several states, including other states the CPA has not visited. The sales tax for Maryland cannot be based on the amount of time the CPA spent in Maryland, because that may be disproportionate to the value of the service the client will actually enjoy in Maryland. It cannot be based on the client’s percentage of business in Maryland versus other states, because that may have nothing to do with the particular service the CPA provided. You can’t base the Maryland sales tax on whether the contract for the service was signed in Maryland, because that may have absolutely nothing to do with where the CPA will do the work or where the client will enjoy the service.
Not only are sales and use taxes a bad idea when applied to the services typically supplied by CPAs, they are also a bad idea when applied to a host of other services for the following reasons:
The Maryland Association of CPAs believes a sales tax on services would burden the citizens and businesses of this state unnecessarily with additional taxes. It would negatively impact economic growth and development. We believe this proposal is bad for small business in Maryland and we will work to defeat such legislation if introduced. We note that other states such as Florida, and more recently Michigan, have attempted to tax a broad range of services only to quickly repeal them in part due to the complexity of administration as noted in the above example.
In many of the past several years’ sessions of the General Assembly, trial lawyers have introduced bills designed to replace Maryland’s current system of determining a defendant’s liability with a system that makes recovery against a defendant easier – even when the person bringing the lawsuit substantially contributed to his own injuries. At present, the Maryland courts allow a person sued for negligence or wrongdoing to raise the “contributory negligence” defense, that is, the party sued may claim that the plaintiff contributed to his injury and thus should not be allowed to recover from the defendant. This long-standing rule in Maryland courts prevents a person from shifting his or her responsibility to others.
If an injured party acts, or fails to act, with knowledge and appreciation that such conduct could result in harm and that party then is injured, he or she cannot recover against another for that injury. The defendant bears the burden of proving that the injured party’s conduct contributed to the harm, and this is generally considered by the jury. Because Maryland’s doctrine of contributory negligence allows a jury to take into consideration how an injured party’s conduct contributed to that party’s injury, it permits juries to more fairly evaluate what damages, if any, should be awarded to an injured party who may have contributed to his own injury. This, in turn, results in lower litigation awards and costs.
The contributory negligence standard should be maintained in Maryland and MACPA will work to defeat any change because:
The increased cost of conducting business and the decreased productivity associated with the comparative negligence standard would, in the long run, lead to a loss of jobs, increased liability and a deterioration of the economic climate in Maryland. MACPA will again work to retain the contributory negligence rule.
After Meeting With Your Legislator
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Legislative & Regulatory-Related Blog Posts
Talking to state legislators doesn’t have to be a nerve-wracking experience. Once you know what to do, it’s as easy as talking to a client or a friend. After all, legislators are people, too!
Use the following outline as a guide while talking to your legislator. Remember — each conversation is different, and this outline might not apply every time. But if you’ve never spoken to a legislator in person, this should give you a place to start.
What we are advocating for and why it matters:
58 State Cir,
Annapolis, MD 21401-1906
Map of state government buildings >
General Assembly Web site
The Sun’s General Assembly coverage
Legislators’ e-mail addresses