On the surface, the 2018 edition of CPA Day looked like any other — close to 200 Maryland CPAs invading Annapolis to protect the profession by educating lawmakers on the issues that impact the profession.
Look a little deeper, though, and you’ll find a few key differences that significantly ramped up the event’s impact.
Most important, though, were the issues. The General Assembly has been back in Annapolis for barely two weeks, and we’re already wrestling with more high-profile, high-impact issues than we usually see in a full 90-day legislative session. In addition to the two mainstays on our legislative agenda — opposing sales taxes on professional services and support of Maryland’s “contributory negligence” rule — CPAs briefed lawmakers (and were briefed by lawmakers) on a number of issues that could significantly impact CPAs and their clients.
Health savings accounts
The ongoing issues surrounding the short-term future of HSAs in Maryland continue to worry many CPAs. Interestingly, MACPA Executive Director Tom Hood said many of the legislators with whom CPAs spoke were largely unaware of the issue and the impact it could have on individual taxes — which made our presence in Annapolis all the more crucial.
In the meantime, emergency bills have been issued in both the House and Senate to address the issue. The bills call for “exempting a high-deductible health plan from the prohibition on application of a deductible to coverage for male sterilization” and, if passed, would apply their provisions retroactively.
Paid sick leave: Delayed implementation?
With the House and Senate each overriding an earlier veto by Gov. Larry Hogan, the Maryland Healthy Working Families Act — which requires certain business to provide paid sick leave to their employees — is set to become law in Maryland. According to Hood, many legislators weren’t aware of the burden that complying with this law would have on Maryland employers, or that they must start complying on Feb. 11 — another opportunity for CPAs to educate Maryland lawmakers.
In the meantime, Sen. Thomas Middleton, chair of the Senate Finance Committee, has introduced emergency legislation that would delay implementation of the new law for 60 days. Read Middleton’s bill in its entirety.
Federal tax reform: Impact on Marylanders
The Tax Cuts and Jobs Act continues to cast shadows at the state level.
With CPAs in town, Maryland Gov. Larry Hogan held a briefing in which he unveiled the Protecting Maryland Taxpayers Act of 2018, “which makes permanent a provision in Maryland law that prevents changes in the federal tax code from affecting Maryland state and local taxes.” Democratic lawmakers also have crafted legislation to insulate Marylanders from unintended consequences of the federal tax overhaul.
Also during CPA Day, state Comptroller Peter Franchot joined Andrew Schaufele, director of Maryland’s Bureau of Revenue Estimates, to release The 60-Day Report, which outlines the effects of federal tax law revisions on Maryland. “The report estimates an approximate $2.8 billion federal tax cut for Marylanders this year,” the Capital News Service reports, “meaning 71 percent of the state’s taxpayers will pay less in federal taxes, 13 percent will pay more and 16 percent will pay the same, according to the comptroller.”
‘Maryland has the best CPAs’
CPAs continue to play a key role in the legislative process surrounding tax reform. The MACPA’s Tax Advisory Group has provided lawmakers from both parties with objective technical expertise and resources that helped them craft reasoned, thoughtful tax legislation. In addition, MACPA State Tax Committee members Karen Syrylo (an incoming MACPA board member) and Jeff Lawson (a former board member) participated in the briefings by Hogan and Franchot.
In fact, Del. Aruna Miller, a Democrat representing District 15 in Montgomery County, says keeping CPA expertise front and center is crucial during Maryland’s legislative process.
“Probably the most sought-after professionals in the nation are our Certified Public Accountants,” Miller posted on Facebook, “and Maryland has the best CPAs.”