On January 24, 2013, the Maryland Court of Special Appeals reversed a circuit court’s withdrawal of assessments and affirmed the Tax Court’s ruling that out-of-state subsidiaries of a company operating in Maryland are subject to Maryland’s corporate income tax because the subsidiaries are engaged in a unitary business with and under the complete control of the Maryland parent company (Comptroller v. Gore Enterprise Holdings, Inc., Md. Ct. Spec. App., Dkt. Nos. 1696; 1697, 01/24/2013). The ultimate conclusion in this case is consistent with prior appellate and Tax Court case law in Maryland; however, some of the language in the opinion reflects a very expansive jurisdiction Continue reading »
The taxation of cloud computing services is an evolving area of sales and use tax. Cloud computing, which includes a wide variety of service offerings, generally allows businesses the potential to reduce IT costs by outsourcing hardware and software maintenance and support. Still, remote access to software, or “software as a service” (SaaS), is only a small part of what is referred to as “cloud computing.” The term also includes offerings such as Continue reading »
Maryland Governor Martin O’Malley has just signed legislation that, effective for tax years beginning after December 31, 2011, increases personal income tax rates for certain individuals and reduces allowable personal exemption deductions. The salient specifics of the legislation are that: Continue reading »
Maryland taxpayers who were not permitted to claim a credit for personal income taxes paid to other states against their local income tax (i.e., City, County or Town) may still claim such a credit on a timely filed protective claim for refund for a tax year with respect to which such opportunity is still available.
Last year, the Howard County Circuit Court ruled that Maryland’s current application of the credit for taxes paid to other states is unconstitutional in so far as the credit is not allowed to offset the Maryland local personal income tax. That decision is still working its way through the appeal process and is unlikely to get to a final determination anytime soon. Nonetheless, the decision presents an opportunity for Maryland taxpayers to amend prior years’ tax returns and claim credits Continue reading »