ANNAPOLIS, Md. (WDVM) — At the State House in Annapolis today [this week], the question on lawmakers minds was: should out of state corporations doing business in Maryland pay taxes here on their “combined” income from operations in all states, or just their business in Maryland.
Sen. Paul Pinsky chairs the Education Committee and wants to ensure schools are funded. But he said, “25% of the largest corporations in this state are paying zero corporate income tax you, and I are paying income tax. Working families pay income tax. They’re paying nothing.”
Advocates for reform said that is an unfair burden on homegrown enterprises.
“Our current system gives an unfair advantage to these large multistate corporations at the expense of our small local businesses,” said Kali Schumitz at the Maryland Center on Economic Policy.
But Maryland risks losing jobs said the state Chamber of Commerce.
“We know that as a tax policy, this disproportionately impacts the manufacturing sector,” said Andrew Griffin with the Maryland Chamber of Commerce. “They are primarily selling and exporting goods across state lines, so it seems an odd time to consider a policy like this when it’s certainly an industry that is struggling to operate at full capacity.”
But it’s a matter of fairness, said Schumitz.
“These large companies aren’t paying into the services that they benefit from,” Schumitz said. “They still benefit from our schools, from having a highly educated workforce. Transportation that works to move their goods. They’re not necessarily paying into the system.”
Maryland, she said, lags behind most other states here.
“Twenty-eight states now and the District of Columbia all have combined reporting already. Sen. Pinsky is leading the cry for reform.
“You know, we’re paying taxes. They’re using our infrastructure and they’re paying zero corporate taxes., said Sen. Pinsky.
If and how these loopholes could be closed will be decided in the next few weeks. Those opposing the so-called “combined income reporting” said Maryland would be at a competitive disadvantage with this reform. They cite two studies that show Maryland is 44th in the nation for its business climate. The other place in Maryland is at 38 among the states.