Regulators have barely begun the massive task of implementing the Tax Cuts and Jobs Act, but there is already significant pushback to the tax reform law at the state level.
Residents of some states with higher tax rates — think California, New York, Connecticut, New Jersey and, yes, Maryland — might see higher tax bills if the tax reform plan remains unchanged. Now, lawmakers in these states are looking for ways in which to protect their citizens from federal tax hikes.
In Maryland, lawmakers on both sides of the aisle have introduced proposals that they say will insulate Marylanders from unintended tax increases that may result from the push for federal tax reform. Democrats have offered details of a three-part plan that they say will protect up to 92 percent of state taxpayers, and Republican Gov. Larry Hogan has introduced a competing plan to do the same thing.
Regardless of which plan is enacted, CPAs will have played an important role in the process.
Members of the MACPA’s Tax Advisory Group are providing lawmakers from both parties with objective technical expertise and resources that will help them craft reasoned, thoughtful legislation.
That’s part of the association’s legislative mission — helping lawmakers better understand complicated financial issues so they can introduce legislation that will help as many Marylanders as possible. The MACPA’s Guiding Principals of Good Tax Policy publication states as much:
“The American Institute of Certified Public Accountants and the MACPA State Tax Committee do not take a position on the ‘best possible solution’ for state tax issues,” the publication states. “Rather, they encourage an in-depth debate of the issues, undertaken through an organized and logical process, with the goal of enacting good tax policies. As the Maryland General Assembly considers new legislation, the unifying goals should be established now to make the effort one that is rational, thoughtful, and lasting.”
As tax reform-related bills make their way through the General Assembly, it’ll be comforting to know they were crafted with the input of Maryland’s CPAs.
Stay tuned. We’ll be providing updates here throughout the General Assembly session of bills that may impact CPAs and their clients.