The MACPA’s opposition to House Bill 691 — the so-called “Filing Fee Fairness Act of 2017” — is picking up steam.
MACPA members will be on hand on Feb. 22 to testify before Maryland’s House Economic Matters Committee in opposition to the bill, which would increase the fee that small businesses must pay for filing an annual report with the State Department of Assessments and Taxation.” For businesses with just $200,000 in assets, that proposed annual fee would skyrocket from $300 to $4,000.
The MACPA also has submitted written testimony opposing the measure.
According to the association, such an exorbitant increase in the annual filing fee is unacceptable, for a number of reasons.
“An annual fee of $4,000 for a small business with only $200,000 of assets is unreasonable and unfair,” MACPA Executive Director Tom Hood said in written comments to the House Economic Matters Committee. “Calculating annual filing fees based on the taxable assets of the entity is poor tax policy as well as hopelessly unclear. It will lead to problems of interpretation and uneven application.”
Moreover, said Hood, it’s a form of double taxation — and inherently bad for business. Here’s how Hood’s testimony reads:
“Maryland’s annual Personal Property Tax Return is already a two-part ‘tax’ comprised of the annual fee to file the return and a personal property tax assessed on the property located in the state. If, as proposed, the filing fee were to be based upon the amount of taxable assets and the personal property tax is based on the amount of taxable assets, entities will now essentially be subject to a double tax.
“The economic advantages of businesses investing in Maryland assets is much larger than the tax revenue collected via a filing fee. This proposal will only serve to disincentivize businesses from locating assets in Maryland.
“HB 691 is an imposition to the very businesses that generate jobs and revenues for Maryland. It will only add to the costs of doing business in this state and it takes Maryland’s tax structure in the wrong direction. We respectfully request an unfavorable report.”
If any of your legislators sit on the House Economic Matters Committee, please consider contacting them and voicing your opposition to the bill.
You may use the following suggested language in your e-mails or phone calls to the committee:
Dear (Delegate’s name here),
I am a constituent and a CPA with clients and businesses located throughout Maryland.
I wish to express my strong opposition to the fees proposed in HB 691, “Corporations and Associations – Annual Reports – Filing Fees (Filing Fee Fairness Act of 2017).” An annual fee of $4,000 for a small business with only $200,000 of assets is unreasonable and unfair. Calculating annual filing fees based on the taxable assets of the entity is poor tax policy. It will lead to problems of interpretation and uneven application.
HB 691 is an imposition to the very businesses that generate jobs and revenues for Maryland. It will only add to the costs of doing business in this state. I respectfully ask you to oppose this legislation.
We will keep you posted on further legislative developments as they arise. Keep an eye on our blog for updates.
You’ll find more updates on this year’s legislative activity from the following sources: