Posted under Taxes
To close Maryland’s widening budget gap, the state has slashed spending for cancer research, reduced reimbursements for health-care workers, cut spending for transportation projects, furloughed state workers and raised the sales tax.
Meanwhile, half of the state’s largest for-profits corporations pay zero taxes to Maryland.
Maryland is among the states that still allow corporations to “shift money between subsidiaries to veil profits and avoid paying taxes.” For example, Toys ‘R’ US avoids paying taxes in Maryland by shifting its profits to a tax free subsidiary in Delaware. A legislative fix to the problem, called “combined reporting,” was defeated in the Maryland General Assembly in 2007. Requiring combined reporting for corporations in Maryland could raise as much as $125 million per year in additional revenue.
In 2007, the Washington Post described the General Assembly’s failure to act as “another air kiss to the deep-pocketed set.”
Twenty-one states representing 51% of the U.S. economy now prohibit corporations from avoiding state taxes by requiring combined reporting. Since Maryland is not among them, we are now paying the price.
[HT: Del. Saqib Ali]
One Response to “Half of Maryland’s Largest Corporations Pay Zero Taxes”
Saqib Ali on 01 Sep 2009 at 1:39 pm #
Thanks Judd!
Can’t wait to have you as my colleague.
Hope it happens.