Maryland Authorizes Tax Amnesty Program

April 21, 2015

By Matthew Wilk

On April 14, Maryland Governor Larry Hogan signed into law SB 763, which requires a tax amnesty program be held from September 1, 2015 to October 30, 2015.  The amnesty program requires the Maryland comptroller to abate 100% of penalties and 50% of interest for participating taxpayers. 

 Eligible Taxes:

  • Corporate Income Tax;
  • State and Local Personal Income Tax;
  • Withholding Taxes;
  • Sales & Use Tax; and
  • Admissions & Amusement Taxes. 

Eligible Taxpayers:

  • Non-Filers;
  • Underreporting of Tax liability;
  • Nonpayment of Tax liability. 

    ***Taxpayers that previously participated in the 2001 or 2009 amnesty programs or the Intangible Holding Company Settlement Program of 2004 are not eligible to participate in the 2015 program. ***

Taxpayers Benefits:

  • Full abatement of civil monetary penalties;
  • 50% abatement of interest accrued through October 30, 2015 (taxpayers that enter into a payment agreement will be subject to 100% of interest accrued after October 30, 2015); and
  • Prohibition of any criminal charges for participating taxpayers (however, this does not apply to pending criminal charges or criminal charges under current investigation).

Amnesty Requirements:

  1.  Returns, tax and 50% of interest must be paid by October 30, 2015; or 
  2.  At the comptroller’s discretion, the comptroller permits the taxpayer to enter into an agreement to make all payments of tax and 50% of interest on or before December 31, 2016.

Unlike the recent amnesty programs in New Jersey and Massachusetts which were limited to previously assessed and outstanding tax liabilities, the Maryland amnesty program is much broader and offers non-filing taxpayers as well as underpaid and nonpaid taxes to be included.  The amnesty does not offer a limited lookback period, so taxpayers may need to evaluate the benefits of a voluntary disclosure vs. participating in the 2015 amnesty program.  For more information, please contact your state and local tax professional.

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