Once again, CPAs have become the talk of the town. Everybody wants to know how the new Tax Cuts and Jobs Act of 2017 will impact them as individuals and businesses, including Maryland government and legislature.
The last time we had major tax legislation was 32 years ago, when the Tax Reform Act of 1986 was signed into law by President Ronald Reagan. Now we have the federal Tax Cuts and Jobs Act, signed into law by President Trump on Dec. 22, 2017, and everybody is seeking the advice of CPAs, even though this massive law does not take effect until 2018.
The impact on Maryland is expected to be a net increase in 2019 state tax revenues of $572 million, according to the Maryland comptroller’s 60-Day Report, released on Jan. 25. These increases are due to the base-broadening provisions of the federal law that flow through to Maryland taxpayers, while the rate reductions do not. As in 1986, many states will adjust their tax laws to minimize increases in state taxes caused by the changes at the federal level.
Right after the first of the year, the MACPA was called to meet with Gov. Larry Hogan’s legislative team to provide guidance on proposed tax legislation to mitigate the impact of the federal legislation on Marylanders. Shortly after that, the legislative staff for Senate President Mike Miller and House Speaker Michael Busch also called on us, as did Comptroller Peter Franchot’s office. The MACPA formed a State Tax Advisory Group from members of our State Tax Committee to meet with those groups.
This all played out on Jan. 25, the same day as CPA Day in Annapolis, when the comptroller released the 60-Day Report and the governor announced the Protecting Maryland Taxpayers Act of 2018.
Two of our State Tax Advisory Group members, Karen Syrylo (an incoming MACPA board member) and Jeff Lawson (a past MACPA board member) were able to attend both briefings and provided a quick update, below.
Our State Tax Task Force has been asked to attend a briefing before the House Ways and Means Committee on Friday, Feb. 9 to offer our technical opinions and insights on the various legislative proposals. Several of the major areas being discussed include decoupling on itemizing and the estate tax, increasing state personal exemptions, and the charitable donation concept. The MACPA’s Board of Directors has decided to offer our experts as trusted technical experts to the governor and legislators and to not take any position on specific tax policy initiatives.
To help our members get ahead of this major new law, we have added a rebroadcast of Don Farmer’s Tax Cuts and Jobs Act of 2017 Update on Feb. 8.
Here are the latest updates on these breaking issues to help you stay informed as the most trusted, future-focused advisor to businesses and individuals:
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