If you believe you may owe any Maryland taxes you should consider participating in Maryland’s tax amnesty program. In return for complying with the terms of the amnesty program all civil penalties (except for any previously assessed fraud penalties) and one-half of the interest that is due will be waived.
The amnesty program will be held September 1 through October 30, 2015. Taxes eligible for the program include state and local income taxes (corporate and individual), withholding taxes, sales and use taxes, and admissions and amusement taxes. The amnesty program applies to the nonreporting of a tax liability, the underreporting of a tax liability, and to the nonpayment of a tax liability. Taxpayers are eligible to participate in the program for if they failed to file a return or pay the tax by December 31, 2014. To participate, taxpayers must: (i) file delinquent returns and pay the tax and one half of the interest due, or (ii) pay the tax and one-half the interest due on returns that were previously filed.
Most amnesty programs require taxpayers to make payments during the amnesty period for all liabilities due to receive the benefits of the programs. However, Maryland’s allows taxpayers to enter into payment agreements and pay liabilities due before January 1, 2017. It is noteworthy, though, the waiver of one-half of the interest due will not apply to interest accruing after October 30, 2015, for taxpayers who enter into payment agreements and have remaining unpaid balances.
Certain taxpayers are not eligible for the program. These include any taxpayer: (i) who was granted amnesty under previous Maryland tax amnesty programs held between calendar years 1999 through 2014 or (ii) eligible for the July 1, 2004 through November 1, 2004 Delaware Holding Company settlement period.
If you have questions about how you may be able to take advantage of Maryland’s Tax Amnesty Program please contact your Keiter advisor.
Sources: Chapter 50, Senate Bill 763, Laws 2015, effective June 1, 2015; Maryland General Assembly 2015 Session, Fiscal and Policy Note – Senate Bill 763.
Terry Barrett applies her experience to provide insights and identify opportunities for large and small businesses on multi-state tax issues, such as sales and use tax, local taxes (property and license) and telecommunications taxes. She serves local and national clients in the areas of state and local tax minimization, tax and nexus studies, assisting with voluntary disclosures, audit resolution and appeal, and refund/exposure reviews to determine refund opportunities as well as corrective measures. Read more of Terry’s insights on our blog.