Maryland Unclaimed Funds by fny17546

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									                          ReveNews
     Maryland

    Vol. 21 No. 3
     Summer 2000




                    Maryland tax information ! WILLIAM DONALD SCHAEFER ! Comptroller of Maryland




                                             Maryland joins national database
Another banner
                                             for unclaimed funds
year for                                          The Comptroller’s Office is participat-     accounts of unclaimed funds, including
                                             ing in a national database service on the        245,000 Maryland accounts, and is
electronic filing                            World Wide Web that offers individuals           endorsed by the National Association of
                                             and businesses a free online search of           Unclaimed Property Administrators. To
                                             unclaimed accounts worth $14 billion.            date, 278 visitors to the Missing Money
     The number of Maryland tax
                                                   Visitors to www.missingmoney.com           site have found leads on unclaimed money
returns filed electronically and pro-
                                             can enter their name, and find out for free if   in Maryland. The comptroller’s Web site at
cessed by the Comptroller’s Office
                                             they have unclaimed money in 26 states,          www.marylandtaxes.com also lists more
through the end of May increased by
                                             including Maryland. The Missing Money            than 40,000 recently reported names of
39 percent over the same period last
                                             site includes records of 4.5 million             unclaimed property owners in Maryland.
year to 415,407.                                                                              Please see missing money on page 8
      Of those returns, almost 359,000
were filed electronically through commer-
cial tax preparers. “Maryland’s tax          Comptroller’s comments
professionals have been crucial to the
success of our electronic filing program,”   State takes e-commerce taxation lead
said Comptroller William Donald Schaefer.         Maryland is taking the lead on an e-        tives of other interested states, in a group
     The largest percentage growth in e-     commerce issue that’s of vital importance        sponsored by the National Conference of
filing – 162 percent - came from taxpay-     to both state government and Maryland            State Legislatures, National Governors
ers who filed online from their PCs.         businesses, thanks to legislation passed         Association, Federation of Tax Adminis-
Almost 56,000 taxpayers filed online this    by the Maryland General Assembly which           trators, and Multistate Tax Commission, to
year, compared with 21,000 last year.        I strongly supported.                            launch a pilot program.
        Direct deposit popular                    The National Advisory Commission                 If nothing is done, we estimate that by
     Through the end of May, more than       on Electronic Commerce failed to recom-          2003, Maryland will lose $148.5 million in
283,000 Maryland taxpayers elected to        mend a level playing field to Congress for       sales tax revenue to Internet sales – untaxed
have their refunds deposited directly        the taxation of Internet sales, leaving it up    sales that also put brick and mortar Maryland
into their bank accounts. Direct deposit     to the states to act. The new law autho-         businesses and the thousands of people they
was especially popular with electronic       rizes my office to work with other states to     employ at a competitive disadvantage. The
filers, 128,639 of whom chose that option    develop a voluntary multi-state, stream-         sales tax is a source of revenue unique to
– 66 percent more than last year.            lined sales tax collection and administra-       state and local governments, and the erosion
Taxpayers who filed electronically and       tion system, subject to legislative ap-          of this tax base has serious ramifications. We
requested direct deposit usually had         proval. The simplified tax system hopes          don’t propose taxing any sales on the
their refunds within 48 hours.               to address the concern of remote sellers         Internet that aren’t already taxed when
                                             that existing state and local sales tax laws     they take place here in Maryland. A
                                             are overly complex and burdensome by             simplified sales tax system would be a first
                                             offering a “zero burden” system. Under           step in dealing with the growing impact of
    Inside                                   the proposed system, state-certified tax         e-commerce and ensuring a level playing
                                             agents would offer tax calculation and           field for Maryland businesses.
•   New tax laws
                                             remittance services for Internet sellers.
    at a glance                                                                                                  William Donald Schaefer
                                                 Similar proposals have been intro-
•   Compliance news                          duced in legislatures across the country,
•   News Briefs                              and we’ve been meeting with representa-
                                                                                                                 Comptroller of Maryland
Page 2                                                  Maryland ReveNews                                             Summer 2000


                                                                                             Tobacco tax regulations
Briefly noted                                                                                    Two regulations have been proposed
                                                                                             and will become effective on May 29,
                                                                                             2000. The first, Regulation .08 under
                                                                                             COMAR 03.02.02 Tobacco Tax, is a new
Expanded exemption for                           January 15 of each year and are required    regulation that establishes guidelines
                                                 of taxpayers who expect to owe $500 or
production activities fully                      more in state and local income taxes not
                                                                                             concerning the responsibility for and
                                                                                             remittance of the tax on “other tobacco
phased in July 1                                 subject to withholding.                     products” by wholesalers, retailers, and
                                                                                             consumers.
     In 1997, the Maryland legislature
broadened the definition of property used        Federal ID numbers now                           This new tax on “other tobacco
                                                                                             products” goes into effect on July 1, 2000.
in a manufacturing process, bringing             available from three state                  Regulation .07 under COMAR 03.02.03
Maryland’s tax treatment of manufacturers
in line with that of other states and
                                                 offices                                     Maryland Cigarette Sales Below Cost Act
                                                                                             is revised to alter the method a cigarette
phasing in the broadened definition as a
                                                      The comptroller’s taxpayer service     wholesaler would use to prove a cost of
credit over two years.
                                                 office in Wheaton can now provide federal   doing business of less than 5% by
     Effective July 1, 2000, purchases of        tax identification numbers for new busi-    eliminating the requirement that cigarette
machinery and equipment covered by the law       nesses registering in Maryland, saving      costs be broken out separately from total
become exempt from the sales and use tax,        them a step in the registration process.    income and expenses.
and businesses no longer need to claim the
credit or file for refund.                            In a pilot project conducted with
                                                 the Internal Revenue Service, the
     However, businesses may continue to         taxpayer service offices that receive the
                                                                                             Partnerships with Insurance
claim any credits to which they are entitled     most walk-in visitors are authorized to     Administration and Attorney
on their sales tax reports or by filing claims
for refunds. Business tax tip #9, Sales
                                                 assign federal tax identification numbers   General to help consumers
                                                 to new business applicants when they
and use tax exemptions for production            complete the Maryland combined
activities, describing purchases eligible for                                                     Comptroller William Donald Schaefer
                                                 registration application for businesses.    has formed a partnership with the Mary-
the credit and how to claim it, is available     The high traffic offices are located in
on the comptroller’s Web site at                                                             land Insurance Administration (MIA) to
                                                 Annapolis (80 Calvert Street), Baltimore    help consumers with a variety of insur-
www.marylandtaxes.com.                           (301 West Preston Street), and Wheaton      ance problems and concerns.
                                                 (11510 Georgia Avenue). The Comp-
                                                 troller’s Office receives approximately          Under the new arrangement, an MIA
Estimated tax calculator                         5,000 business registration applications    representative will be available once a
helps quarterly filers                           each month.                                 month at 17 of the Comptroller’s 20 branch
                                                                                             offices to help citizens who want to file a
     The 216,000 taxpayers who file quarterly                                                complaint against an insurance company,
estimated Maryland income tax payments           Student workers may be                      ask questions about policies, receive
                                                                                             educational materials and publications, or
are benefiting from the new interactive          exempt from withholding                     report suspected insurance fraud.
estimated tax calculator on the comptroller’s
Web site at www.marylandtaxes.com.                    Employers can cut down on paper-            The comptroller is also partnering
    The new feature serves as an online          work and have fewer payroll accounts to     with the Attorney General’s Office to
worksheet for taxpayers who must file            reconcile by encouraging summer workers     make consumer protection help more
Form 502D (Declaration of Estimated              to claim a special exemption on their tax   widely available. Citizens can visit any of
Maryland and Local Income Tax).                  withholding forms.                          the comptroller’s branch offices to pick up
                                                                                             consumer complaint forms.
     After entering their filing status,             Workers under age 65 who expect to
federal adjusted gross income amount,            earn less than $7,200 in 2000 can claim          They can file those forms with the
income modifications, and other tax              exemption from withholding of state and     Attorney General’s Office, or personnel at
information, taxpayers just click a box, and     local income taxes on line 3 of Form        our field offices can file for them. Litera-
their estimated tax calculation is computed      MW507, the Employee’s Maryland              ture on consumer issues will also be
automatically. The form itself can be            Withholding Certificate, which is           available at the branch offices.
downloaded from the Web site. Quarterly          available on the comptroller’s Web site
estimated payments are normally due on           at www.marylandtaxes.com.
April 15, June 15, September 15, and
Summer 2000                                          Maryland ReveNews                                                      Page 3


                                                                                          Maryland return for the same year.

Compliance news                                                                                 Many of these taxpayers have not
                                                                                          responded, and the Comptroller’s Office
                                                                                          has issued 1,118 assessments under the
                                                                                          program. While there may be valid
                                                                                          reasons taxpayers didn’t file, they need to
                                             delinquent taxpayers, giving them the
U.S. Customs                                 opportunity to resolve the liability.
                                                                                          let the Comptroller’s Office know by
                                                                                          responding to the notice. When taxpay-
project update                               Delinquent taxpayers who have active
                                             payment plans with the comptroller were
                                                                                          ers don’t respond to the notice, they are
                                                                                          assessed tax based on the federal return,
                                             not included in the program.                 as well as penalty and interest.
    The Comptroller’s Office has collected        The Comptroller’s Office certified
almost $170,000 in use tax revenue                                                            In another match program (Federal
                                             7,132 names to the federal agency han-      Adjusted Gross Income Match or FAGIM),
through a new program using information      dling the program. The federal govern-
supplied by the United States Customs                                                    we are sending notices to taxpayers asking
                                             ment notifies taxpayers whose refunds are   them to clarify income reported on the 1998
Service (see ReveNews, Spring 2000).         offset through the program. If you or your  Maryland return where there is a discrep-
     The tax is                                                                                 ancy between Maryland and federal
collected from                                                                                  reported income for that year.
Marylanders         Maryland law requires the five percent use tax be paid on Taxpayers receiving either of these
who buy items
overseas and
                   the sales price of items brought into and used in Maryland, notices should respond immediately
                     no matter where they were purchased, unless the goods                      to resolve the issue and possibly
have them                                                                                       avoid tax assessments. If you or
shipped into the    are for resale and the buyer has a valid resale certificate. your clients have questions about
state. Of the                                                                                   these notices, please contact us at
total collected to                                                                       410-767-1966 in the Baltimore area or toll
date, $114,000 was paid on one piece of art clients have questions about this program,   free at 1-800-648-9638 from elsewhere in
imported from England.                        please contact the Compliance Division at  Maryland.
     Maryland law requires the five           410-974-2432 in Central Maryland or 1-888-
percent use tax be paid on the sales price    674-0016 from elsewhere.
of items brought into and used in Mary-                            Carnivals and
land, no matter where they were pur-
chased, unless the goods are for resale      Don’t ignore matching circuses
and the buyer has a valid resale certificate.
     The Comptroller’s Office will be
                                             program notices
                                                                                              The carnival and circus season means
contacting businesses importing goods                                                     weekend work for personnel from the
from overseas to alert them to any use tax        Since January, the Comptroller’s        Special Events Unit, as they visit these
responsibilities. For more information on    Office has sent more than 19,000 non-filer   events to collect admissions and amuse-
this program, contact the Business Nexus     notices for tax year 1998. These notices     ment and sales and use tax due. Last
Unit at 410-767-1582 in the Baltimore area   went to taxpayers who filed a 1998 federal   season, they collected almost $190,000
or toll-free at 1-800-648-9638 from else-    return with a Maryland address but not a     from 280 events.
where in Maryland.


Federal offset brings                             Schaefer names Dale
state millions
                                                  Hough payroll director
     A new federal program that allows
states to offset federal tax refunds to               Comptroller William Donald          who retired on May 1. The Central
satisfy delinquent state income tax              Schaefer has named Howard County         Payroll Bureau provides payroll
liabilities generated more than $3 million       resident W. Dale Hough as director of    services to more then 100,000
from 2,542 offsets beginning January 1           the Central Payroll Bureau.              employees of the legislative, judicial,
through the end of April.                            Mr. Hough, who had served as         and executive branches of state
                                                 deputy director of the bureau for 19     government as well as the University
   To participate in the program, the
                                                 years, replaced Edwin Greenberg,         of Maryland system.
Comptroller’s Office sent notices to
Page 4                                                  Maryland ReveNews                                                  Summer 2000




                            New laws at a glance
Following are brief descriptions of                                                              company franchise tax. Effective begin-
legislation enacted by the 2000                 Maryland research and devel-                     ning with tax year 2001. (HB 729, Chapter
session of the Maryland General                 opment tax credit. This law creates              700, Acts of 2000)
Assembly that will have the greatest            a new tax credit against personal and
impact on laws administered by the              corporate income taxes for three percent of
                                                qualified research and development               Long-term care insurance
Comptroller’s Office.                                                                            premium credit. This law creates a
                                                expenses up to a certain base amount. An
                                                additional credit of ten percent is permitted    one-time credit against the personal income
                                                for expenses exceeding the base amount.          tax for premiums paid for long-term care
Income tax                                      Total amount of the credits approved by the      insurance covering the individual or the
     Franchise taxes. The financial             Department of Business and Economic              individual’s spouse, parent, stepparent, child,
institutions franchise tax and the savings      Development (DBED) for all taxpayers             or stepchild. The credit may not exceed $500
and loan franchise tax are eliminated, and      cannot exceed $3,000,000 for any calendar        for each insured person and may not be
these businesses will be subject to the         year. To claim the credit, the taxpayer must     claimed by more than one taxpayer for the
corporate income tax. Effective for tax         file an amended return for the taxable year in   covered individual, for individuals covered
years beginning on or after July 1, 2000.       which the expense was incurred. The credit       by long-term care insurance before July 1,
(SB 56, Chapter 225, Acts of 2000)              cannot exceed the state tax liability but may    2000, or for individuals for whom a credit
                                                be carried forward for up to 15 years or until   was claimed in any previous year. Effective
                                                fully used. The application for the credits      beginning with tax year 2000. (SB 171,
   Tax credits for new or                       must be submitted to DBED by September           Chapter 242, Acts of 2000)
expanded business premises.                     15 and DBED will certify the amount of the
The required number of individuals a            credits approved by December 15. The
business must employ in new permanent           credit may be claimed on returns for tax         Clean air incentives. This legisla-
full-time positions during a 24-month           years 2000 through 2004. (SB 309, Chapter        tion creates a new credit against the
period, during which the business must          515, & HB 14, Chapter 516, Acts of 2000)         personal and corporate income tax for 15%
also obtain and occupy the new or ex-                                                            of the installed costs of solar water
panded premises, is reduced from 25 to ten                                                       heating property (up to a maximum of
for locations in counties with a population     Credit for steam heating. The                    $2,000) and photovoltaic property (up to a
of less than 30,000. Effective July 1, 2000.    current credit against the corporate income      maximum of $1,000). This credit may be
(SB 86, Chapter 501, Acts of 2000)              tax for 60 percent of property taxes paid by     taken for property placed in service from
                                                a public utility on operating property in        July 1, 2000, through December 31, 2004.
                                                Maryland, other than operating land, used
                                                to generate electricity for sale is expanded          The credit may not exceed the state
Tax credit for commuter ben-
                                                to include property used to generate steam       tax liability after other credits (except for
efits. The current credit for commuter          for sale. Effective beginning tax year 2001;     withholding, estimated and pass-through
benefits provided to employees is changed       provided, however, that for steam heating        entity) and may not be carried over to
to limit the credit to amounts paid for         companies, the income tax credit allowed         other taxable years. A second credit is
employees who live or work in Maryland          under Section 10-712 shall be allowed only       created for certain “qualified Maryland
and to expand the eligible benefit to cash      for property tax paid for a property tax year    facilities” that primarily use qualified
paid in lieu of a parking program or guaran-    beginning on or after July 1, 2001. (SB          energy resources to produce electricity
teed ride home program. An individual or        414, Chapter 526, Acts of 2000)                  and that is originally placed in service any
corporation may claim an income tax credit                                                       time from January 1, 2001, through
of 50 percent of the cost of providing                                                           December 31, 2004. A qualified facility is
commuter benefits to the business entity’s      Maryland mined coal tax credits.                 also a facility that produces electricity
employees, not to exceed $30 per month, per     The credit against the income tax available      from a qualified energy resource that is
employee. An organization that is exempt        to public service companies for purchas-         co-fired with coal and begins co-firing a
from taxation under Section 501, Article (3)    ing Maryland-mined coal is expanded by           qualified energy resource on or after
or (4) of the Internal Revenue Code may         eliminating the 1986 base year limitation.       January 1, 2001, through December 31,
apply the credit against the payment of taxes   The credit is extended to certain electricity    2004, regardless of when the original
withheld. Effective beginning with tax          suppliers that are not subject to the public     facility was placed in service. A facility
year 2001. (SB 244, Chapter 357, & HB           service company franchise tax. The bill          that claims a tax credit under Section 45 of
310, Chapter 356, Acts of 2000)                 repeals the June 30, 2001, sunset date of        the Internal Revenue Code cannot take
                                                the credit against the public service            the tax credit.
Summer 2000                                             Maryland ReveNews                                                                  Page 5


     The credit is equal to 0.85 cents for                                                          year of the credit for disabled employees has
each kilowatt-hour of electricity produced     Neighborhood Stabilization                           been increased from 20 percent to 30 percent
from qualified energy resources during a       Credits – Baltimore City and                         of the first $6,000 in wages paid, bringing it
specified 10-year period at a qualified        Baltimore County. The current                        into conformity with the credit allowed for
Maryland facility. For a facility that         Neighborhood Stabilization Credit is                 qualified employment opportunity employ-
produces electricity from a qualified          expanded by permitting a second area of              ees. Both credits are extended by two years
energy resource that is co-fired with coal,    Baltimore County to qualify for the                  to tax year 2005 for employees hired before
the credit is reduced to 0.5 cents per         refundable income tax credit for a portion           July 1, 2003. The changes are effective for
kilowatt-hour. The credit cannot exceed        of property taxes paid on certain residences         employees hired on or after July 1, 2000.
the state tax liability, but may be carried    and by extending the expiration of the current       (HB 1015, Chapter 448, Acts of 2000)
forward for up to 10 succeeding taxable        credit to cover homes purchased until June
years, or until fully used. The legislation    30, 2002. Effective beginning with tax year
also provides for a credit against the         2001. (SB 348 Chapter 265, Acts of 2000)             Elevator Handrails in Health
motor vehicle excise tax for the purchase                                                           Care Facilities. This legislation
of certain electric and “hybrid vehicles.”                                                          creates a subtraction modification for one
This provision will take effect on July 1,     Neighborhood Stabilization                           hundred percent of the cost to buy and
2000. See Sales and use tax laws for the       Credits – Montgomery and                             install handrails in existing elevators in
sales tax implications of this act. (SB 670,
Chapter 295, & HB 20, Chapter 296, Acts
                                               Prince George’s counties. The                        health care facilities (as defined in Section
                                               refundable credit against the state income tax       19-114 of the Health-General Article) or in
of 2000)
                                               for property tax paid on certain owner-              other buildings where at least fifty percent
                                               occupied residential real property is expanded       of the space is used for medical purposes.
Earned Income Credit. The                      to a designated neighborhood stabilization           Effective beginning with tax year 2000.
                                               area of Montgomery County for qualifying             (HB 1103, Chapter 665, Acts of 2000)
phase-in from 12.5 percent to 15 percent of
the percentage of the federal earned           homes purchased between July 1, 2000, and
income credit used for determining the         June 30, 2002. Effective beginning with tax
                                               year 2001. (HB 918, Chapter 653, Acts of             Fire, rescue, and emergency
Maryland refundable credit is accelerated,
becoming effective for tax year 2000. The      2000) The credit is also expanded to include         medical services members.
law also authorizes each county to             Prince George’s County. The designated               The current subtraction modification for
provide a refundable earned income credit      geographic areas in that county must be              volunteer fire, rescue, and emergency
equal to the amount that the federal EITC      located in two of the following three areas: a       medical services personnel is expanded by
multiplied by three times the local income     priority funding area, a revitalization tax credit   gradually reducing the duration of service
tax rate exceeds the local income tax,         district, or an enterprise zone. Effective           required in volunteer organizations from
effective beginning with tax year 2000.        beginning with tax year 2001. (HB 1009,              72 to 36 months. The change is phased in
(SB 240, Chapter 510, Acts of 2000)            Chapter 662, Acts of 2000)                           over four years beginning with tax year
                                                                                                    2001. (HB 1303, Chapter 472, Act of 2000)

Adoption expenses. Individuals                 “Work, Not Welfare” tax credit.
may claim a $6,000 subtraction modification    The current credit is modified by specifying
                                                                                                    Maryland Prepaid College
for adopting a child with a special need and   that, for a business to qualify, employees it        Trust and Maryland College
$5,000 for a child without a special need.     hires must have received temporary cash              Investment Plan. The name of the
(SB 316, Chapter 517, Acts of 2000)            assistance from the state under the Aid to           Maryland Higher Education Investment
                                               Families with Dependent Children Program             Program is changed to the Maryland
                                               or the Family Investment Program for any             Prepaid College Trust. The law also
Credit for child and dependent                 three of the 18 months before they were              creates the Maryland College Investment
care expenses. The current credit              hired and that they were, for six months             Plan, a new plan with the same tax benefits
for child and dependent care expenses is       before their employment with the business,           as the Maryland Prepaid College Trust.
expanded by (1) increasing the percentage      Maryland residents. Previously, employees            (HB 11, Chapter 494, Acts of 2000)
of the federal credit upon which the state     must have received such assistance for
credit is based from 25 percent to 32.5        three months before employment. The
percent and by (2) increasing the federal      legislation made a technical correction to the       Other taxes and fees
adjusted gross income levels at which the      credit permitted in the second year by
credit begins to phase out from $15,000 to     adding transportation expenses. The                  Tire recycling fee. The tire
$20,000 for “married filing separately” tax    definition of qualified employees with a             recycling fee that was set to expire on July 1,
status and from $30,000 to $40,000 for all     disability is expanded to include certain            2000, is reinstated; however, the amount of
others. Effective beginning with tax year      veterans who were discharged or released             the fee is reduced from $1 to 40 cents per tire.
2001. (SB 335, Chapter 520, Acts of 2000)      for a service-connected disability. The first
                                                                                                                          Continued on the next page
Page 6                                                     Maryland ReveNews                                                 Summer 2000

Continued from previous page                       the sales tax for the sale of any item of             Taxpayers who have paid the tax on
Effective July 1, 2000, for a period of four       clothing or footwear, excluding accessory        qualifying machinery and equipment
years. (SB 136, Chapter 235, Acts of 2000)         items, if the taxable price of the individual    purchased from January 1, 2000, through
                                                   item of clothing or footwear is less than        June 30, 2000, may file for a refund of the
                                                   $100. Accessory items are not included in        tax. (HB 794, Chapter 12, Acts of 2000)
Inheritance tax. The inheritance tax               this exemption and are defined to include
will no longer apply to property passing to        jewelry, watches, watchbands, handbags,
the following: the decedent’s spouse,              handkerchiefs, umbrellas, scarves, ties,         Bulk Vending Products. An
children and their spouses, parents,               headbands and belt buckles. The comptrol-        exemption has been created for the sale of
stepparents or stepchildren, grandparents,         ler will be providing more detailed informa-     tangible personal property through a bulk
brothers and sisters, and other lineal             tion to both retailers and the general public    vending machine if the taxable price is 25
descendants, or to a corporation if all of its     on the implementation of this tax-free week      cents or less. A bulk vending machine is
stockholders consist of those persons. The         in 2001. (HB 170, Chapter 576, & SB 103,         defined as a machine that contains
repeal is effective July 1, 2000, and applies to   Chapter 577, Acts of 2000                        unsorted merchandise and, when a coin is
all decedents dying on or after July 1,                                                             inserted, dispenses the unsorted merchan-
2000. (SB 1, Chapter 497, Acts of 2000)                                                             dise in approximately equal portions at
                                                   Simplified tax system. This law                  random and without selection by the
                                                   authorizes the comptroller to work with          customer. Effective July 1, 2000. (HB 394,
Estate tax – small estates. The                    other states to develop a pilot project for a    Chapter 595, Acts of 2000)
value of an estate that can be administered        voluntary multi-state, streamlined sales tax
as a small estate is increased from $20,000 to     collection and administration system,
$30,000. Also, an estate valued at $50,000 or      subject to legislative approval. (See            Film Production Activity. An
less can also be administered as a small estate    Comptroller’s Comments on the front page         exemption has been created for a sale of
if all of the property is being transferred to     for more details). Effective July 1, 2000.       tangible personal property or a taxable
                                                   (HB 1421, Chapter 698, Acts of 2000)             service used directly in connection with a
a spouse. Effective July 1, 2000, applying
to decedents who die on or after July 1,                                                            film production activity by a film producer
2000. (HB 322, Chapter 118, Acts of 2000)                                                           or production company certified by the
                                                   Flags. The sale of a prisoner of war or          Department of Business and Economic
                                                   missing in action flag honoring and              Development. Effective July 1, 2000. (HB
Estate tax – donation of a                         remembering military personnel who have          926, Chapter 432, Acts of 2000)
                                                   served in the Armed Services of the
conservation easement. This                        United States is exempt. Effective July 1,
law gives personal representatives,                2000. (SB 774, Chapter 86, Acts of 2000)
trustees, and fiduciaries the authority to                                                          Clean Energy Incentive Act.
donate conservation easements on                                                                    This law provides an exemption from the
property if a will or other governing                                                               sales and use tax for sales of certain
                                                   Commercial Fishing. This law                     electric appliances that meet or exceed the
instrument directs them to do so or if they        expands the exemption for the sale of fuel or
have consents from everyone having an                                                               applicable energy star efficiency require-
                                                   repair parts for a commercial fishing vessel     ments developed by the United States
interest in the property. This expands their       to include vessels used for other commercial
ability to take advantage of certain estate                                                         Environmental Protection Agency and the
                                                   fishing purposes, such as head boats and         United States Department of Energy,
tax exclusions allowed under Section 2031          charter fishing boats. Effective July 1, 2000.
(c) of the Internal Revenue Code and                                                                including energy-efficient clothes wash-
                                                   (HB 981, Chapter 443, Acts of 2000)
reduce the value of the estate subject to                                                           ers, room air conditioners, and refrigera-
estate taxes. Effective July 1, 2000,                                                               tors, for certain limited periods of time.
retroactive to donations from estates of           Digital Telecommunications
decedents who died on or after January 1,                                                                On or before July 1, 2004, the sale of
                                                   Equipment. The tax does not apply                energy-efficient fuel cells that generate
1998. (HB 456, Chapter 603, Acts of 2000)          to the sale, from January 1, 2000, through       electricity and heat, natural gas heat
                                                   December 31, 2007, of machinery and              pumps, electric heat pump hot water
                                                   equipment that                                   heaters, electric heat pumps, central air
Sales & use tax                                         1. enables a television or radio station    conditioners, and advanced natural gas
                                                   to originate and broadcast or to receive         water heaters will be exempt from the sales
Tax Free Week. The General Assem-                  and broadcast digital signals, and               and use tax. See income tax laws for
bly has designated the week from August                 2. was purchased to comply with or to       income tax credits provided by this act.
10, 2001, through August 16, 2001, as a tax-       facilitate compliance with the Telecommu-        (HB 20, Chapter 296, & SB 670, Chapter
free week for shopping in Maryland. During         nications Act of 1996, Public Law 104-104,       295, Acts of 2000)
this week, there will be an exemption from         100 Stat. 56.
Summer 2000                                               Maryland ReveNews                                                               Page 7


                                                                                                       be a producer or refiner of motor fuel to
Tobacco Cessation Products.                      Cigarette vending machines.                           qualify for a Class “A” license. Now, an
The sale of nicotine patches, nicotine           Tobacco products may not be sold through              applicant may qualify for a Class “A”
gum, or any other product intended for           a vending machine unless the vending                  license, if the parent company meets all of
use as an aid in tobacco use cessation           machine (1) is located in an establishment            the requirements for the Class “A” license.
and approved by the United States Food           that minors are prohibited by law from                The primary benefit of the Class “A”
and Drug Administration for that purpose         entering or (2) can only be operated with a           license is that it allows for tax-free ex-
is exempt. This codifies an administrative       token, card or similar device obtained only           changes among Class “A” license-
interpretation that the sale of these            from the establishment’s owner or                     holders, an industry-wide practice. This
products is tax-exempt. Effective July 1,        employees. Effective January 1, 2001. (SB             law change will facilitate the continued
2000. (HB 128, Chapter 237, & SB 137,            271, Chapter 247, Acts of 2000)                       sale of quality gasoline in Maryland by
Chapter 236, Acts of 2000)                                                                             reputable suppliers. Effective October 1,
                                                                                                       2000. (HB 151, Chapter 105, Acts of 2000)
                                                 Hard cider defined. Effective October
Alcohol & tobacco tax                            1, 2000, hard cider will be treated as beer, rather
                                                 than as wine, for alcoholic beverage regula-          IFTA decal fee. This law eliminates
Regulatory relief for wineries.                  tion, licensing, and taxing purposes. (SB             the annual $7 fee that commercial vehicles
In a measure proposed by the                     757, Chapter 85, Acts of 2000)                        based in Maryland pay to register under
Comptroller’s Office to ease regulation on                                                             the International Fuel Tax Agreement
Maryland’s wine industry to help the                                                                   (IFTA), effective January 1, 2001. Begin-
industry compete and grow, Maryland              Cigarette licenses. The authority                     ning with the issuance of decals for the
wineries will be able to: (1) sell wine by the   of the comptroller to investigate appli-              2001 registration year, there will be no fee
glass at the winery, (2) provide their           cants for cigarette business licenses has             to obtain IFTA decals. Effective January
product on a retail licensed premises for        been expanded. New circumstances under                1, 2001. (SB 59, Chapter 36, Acts of 2000)
legitimate promotional activities, and (3)       which the comptroller may deny a license
obtain up to twelve winery special event         to an applicant, reprimand a licensee, or
permits per year.                                suspend or revoke a license include: a
                                                                                                       Service station dealer regis-
                                                 felony conviction, a misdemeanor                      tration and sale of gasoline
     The winery special event permit will
allow a winery to promote and, to a limited      conviction of a crime of moral turpitude              products. This law extends to October
extent, sell their wines at fairs, festivals,    that is directly related to the fitness of the        1, 2004, the conditional prohibition that
farmers’ markets, and similar locations          applicant or licensee, or the failure to pay          prevents the comptroller from registering a
where a permanent alcoholic beverage             a tax due. The comptroller must grant a               retail service station dealer who markets
license has not been issued. Effective           waiver from these provisions to any                   motor fuel through a retail service station
October 1, 2000 (HB 414, Chapter 598,            person who is licensed as of October 1,               that was altered, enlarged, or structurally
Acts of 2000)                                    2000, for a conviction occurring before               modified after July 1, 1977.
                                                 that date. Effective October 1, 2000. (HB                  The prohibition was extended
                                                 95, Chapter 97, Acts of 2000)                         because of concerns about the petroleum
Cigarette packs of less than                                                                           industry’s trend towards gas-and-go
20. Effective October 1, 2000, it will be                                                              facilities and away from local full-service
illegal for wholesalers or retailers to sell,    Pub-breweries and micro-                              retail service stations.
distribute or give away cigarettes in packs      breweries. A holder of a pub-                              The new law also extends to Septem-
of less than 20. (SB 6, Chapter 220, Acts        brewery or micro-brewery license may                  ber 30, 2004, a suspension of the require-
of 2000)                                         have or hold a financial interest in one              ment for a motor fuel producer, refiner or
                                                 additional retail liquor license that is              wholesaler who supplies retail service
                                                 unrelated to the existing pub-brewery or              station dealers to extend voluntary
Advertising signs for beer. The                  micro-brewery license. Effective June 1,              allowances uniformly. This will allow an
value of a sign advertising beer and furnished   2000. (HB 967, Chapter 441, Acts of 2000)             oil company to help a service station
to a retail alcoholic beverages license holder                                                         dealer meet competition by temporarily
by a brewer, nonresident dealer, or beer                                                               reducing the wholesale price of gasoline
wholesaler has been increased from $50 to        Motor Fuel Tax                                        for that dealer but not offer the same
$150. However, a $50 value limit is maintained                                                         discount to other dealers. This extension
for signs that are manufactured by beer                                                                was deemed necessary to help protect
wholesalers and are furnished to alcoholic
                                                 Class “A” licenses. This law                          service station dealers from predatory
beverage retailers. Effective October 1,         makes it possible for more major gasoline             pricing from mass marketers. Effective
2000. (HB 513, Chapter 613, Acts of 2000)        suppliers to qualify for a Class “A” dealer           October 1, 2000. (SB 354, Chapter 521,
                                                 license. Previously, an applicant had to              Acts of 2000)
Page 8                                                Maryland ReveNews                                             Summer 2000



State joins national “Missing Money” data base
Unclaimed funds from page 1
                                                                                         Amnesty update
  In yet another effort to reunite people with their missing money,        Under an unclaimed property amnesty program, recently
the Internal Revenue Service is sending notices to 16,000             extended to October 31, 2000 (see ReveNews, Spring 2000), 1,025
apparent unclaimed property owners on behalf of the state.            businesses have turned over $767,494 in unclaimed funds to the
     In these cases, the comptroller may not have a valid address     Comptroller’s Office. Financial institutions and corporations in
but does have a Social Security number. IRS uses the numbers to       Maryland must report funds that have been unclaimed for five
find current addresses in their tax records and mail the notices.     years to the Comptroller’s Office.
     An eight-page advertising supplement that appeared in 36              The amnesty program allows businesses holding unclaimed
newspapers throughout the state in March helped more than 2,000       assets to turn them over to participating states and be exempted
individuals and businesses find unclaimed funds. Among the            from penalties, interest, and/or fines, depending on the state.
largest claims, a St. Mary’s County resident discovered $25,486       Maryland waives penalty and interest. For more information on
through the ad, while a Baltimore City resident found $10,319.        the program, call the Unclaimed Property Unit at 410-767-1700 in
                                                                      the Baltimore area or 1-800-782-7383 toll-free from elsewhere.



                              New laws at a glance inside




                                                                                            Annapolis, Maryland 21404-0466
                                                                                                     P.O. Box 466
                                                                                              Goldstein Treasury Building
                                                                                               Comptroller of Maryland
                                                                                               Reve News

								
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