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Legislation has been enacted in Maryland allowing for a tax amnesty period from September 1 through October 30, 2009. The amnesty period is applicable to income, withholding, sales and use, and admissions and amusement taxes. During this period, taxpayers may file any delinquent returns and pay all tax liabilities or enter into an agreement with the Comptroller. The Comptroller will waive one half of the interest due and all civil penalties, except previously assessed fraud penalties. Taxpayers who have more than 500 U.S. employees, who were previously granted amnesty in 2001, or were eligible for the 2004 Chapter 557 settlement period, are ineligible for the 2009 amnesty program. Taxpayers will not face any criminal charges arising from any filed return or paid taxes during the program. Other rules apply (S.B. 552, effective June 1, 2009).


A long-distance carrier company did not owe sales tax on its transmission of 900-number calls made in Maryland on behalf of information providers. The decision was based on the fact that the activities of the company were associated with those of a common carrier rather than a service originator. (AT & T Communications of Maryland v. Comptroller, Maryland Court of Appeals No. 111, June 12, 2008)


The Tax Reform Act of 2007 was signed Maryland Governor Martin O’Malley on November 19, 2007. As a result, the definition of “taxable services” under the sales and use tax law had been altered to include certain computer services. “Computer services” includes such transactions as custom computer programming, data processing, computer disaster recovery, and hardware or software installation, maintenance or repair. The definition does not include charges for computer training. The provisions under the new legislation were set to become effective July 1, 2008. UPDATE: Before the law change had a chance to take effect, however, legislation to repeal the taxation of computer services was passed in a special session and signed by the governor on April 8, 2008. (S.B. 46, Laws 2008)


Governor O’Malley signed HB 5 which will increase the state sales and use tax from 5% to 6%, effective January 3, 2008. In addition, other provisions added to the new legislation include: tax holiday provisions, taxes to vending machines sales, admission and amusement tax, and a rate increase exemption for contractors and builders. (H.B. 5, Laws 2007, Maryland Governor's Office, November 19, 2007


Beginning August 23, 2006 and concluding August 27, 2006 Maryland will exempt select clothing and footwear from sales tax. To qualify for the exemption, each item of clothing or footwear must cost no more than one-hundred dollars. Clothing accessories and protective clothing are fully taxable. (Maryland Comptroller’s Office website)



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