Tax News

CCH (cch.taxgroup.com) reports:

Maryland S.B. 2 has created numerous additional reporting requirements for Maryland corporate income tax taxpayers and other changes affecting corporate and personal income taxes. These reporting requirements could force many corporations to file information returns with the state that had not previously been required to file returns. Furthermore, the willful failure to file a required statement or the filing of a false statement is subject to a fine not exceeding $10,000, imprisonment not exceeding five years, or both.
Effective for tax years beginning after December 31, 2005, Maryland corporate taxpayers are required to file detailed information returns including, but not limited to, (1) statements identifying each member of the corporate group and affiliated groups, as defined by IRC §§ 1504 or 1563, (2) statements identifying whether each member filed a Maryland return and in which states they filed a return, (3) the total sales worldwide and within Maryland, and (4) a list of members included in combined or consolidated reports for states that require such reporting.
Publicly traded corporations are required to include the name of any corporation owning (directly or not) at least 50% of its voting stock as well as information reported on or used to prepare the corporation's tax returns. If a publicly traded corporation is not required to file a return in Maryland, it still may be required to provide the information that would be required to be reported on or used in preparing the tax return if one were required. In lieu of providing the information that would be required to be reported on or used in preparing the tax return, publicly traded corporations that are not required to file a return may provide (1) an explanation as to why the corporation is not required to file a return and (2) a statement detailing its total gross receipts from sales to purchasers in Maryland.
Publicly traded corporations with worldwide gross receipts greater than $100,000,000 must also provide information regarding (1) how much would be owed if water's edge combined reporting were required, (2) throwback sales calculations if they were to be required, (3) where income was allocated that is not apportionable if the corporation's principal executive office is not in Maryland, and (4) the profits before tax reported on SEC Form 10-K for the corporation or corporation group.
Additionally, effective January 1, 2008, individuals who are required to file a Maryland income tax return or estimated income tax declaration or return and are reporting income or loss from a sole proprietorship (Schedule C of federal Form 1040) or income or loss from rental real estate and royalties, partnerships and S Corporations, estates and trusts, or real estate mortgage investment conduits (Schedule E of federal Form 1040), will be required to attach a copy of the federal income tax return.
A prior story covered other corporate and personal income tax changes under S.B. 2. (TAXDAY, 2007/11/20, S.12)
S.B. 2 Laws 2007, First Special Session, effective as noted above.