The SALT Shaker: The State of Maryland is Ready for Tax Season

The State of Maryland has issued updates and reminders for individual and business taxpayers that will impact the 2014 returns prepared during tax season 2015.

• Maryland began processing 2014 individual income tax returns on January 20th. 2014 business returns processing began on January 9th.
• Certain tax credits may only be claimed on electronically filed forms:
  • Businesses and individuals must claim business income tax credits by electronically filing Form 500CR or 502CR.
  • Form 500 or 510 must be filed electronically to claim a Sustainable Communities Tax Credit from Form 502S.
• There are new tax credits for business taxpayers including credits for qualified vehicles (Class F tractors) and cyber-security investments.
• The maximum pension exclusion for qualified taxpayers has increased to $29,000 for 2014.
• For tax year 2014, Maryland is no longer decoupled from the federal itemized deduction limitation threshold.
• There are new subtraction modifications available for tax year 2014 including:
  • Up to $1,500 of approved un-reimbursed expenses that a foster parent incurs for a foster child.
  • The amount of student loan indebtedness discharged due to total and permanent disability or death.

Please contact the SALT Group if you have any questions regarding these Maryland updates for tax year 2014.

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The SALT Shaker: New Tax Credit for 2015 – Endow Maryland

Commencing in 2015, contributions to Qualified Community Foundations will qualify for a 25% Maryland tax credit. There are 14 charities in Maryland that qualify for the tax credit program. Donations to any of these 14 charities will qualify for a 25% Maryland tax credit that can be used to reduce income tax.

The 14 charities can be found at this link – http://www.mdcommunityfoundations.org/. The total annual amount of credit available is $250,000 and approval from the Maryland Department of Housing and Community Development must be obtained to claim the credit.

The KatzAbosch SALT Group can help you determine if this charitable giving would make sense for you. Please contact the KatzAbosch SALT Group if you have any questions regarding SALT issues.

KatzAbosch
9690 Deereco Road, Suite 500
Timonium, MD 21093
410.828.2727

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KatzAbosch Announces That Linda J. Lang Has Joined The Firm

KatzAbosch is pleased to announce that Linda J. Lang has joined the firm as Government Contracting Advisor effective January 5, 2015. Linda will provide a specialized list of consultative services to include, but not limited to, proposal review and analysis, assistance with proposal preparation, contract maintenance, GSA scheduling, small business reporting, contract administration, and training. She has spent over 25 years as a government contractor for large and small businesses in the Baltimore and DC Metro areas, where she specialized in both contracting and subcontracting. Linda’s experience working alongside government contractors such as Northrop Grumman, Lockheed Martin, Boeing, Innoplex and TASC has positioned her as one of the most sought-after experts in her industry.

She earned her M.S. in Business Finance and Management from Johns Hopkins University and her B.A. in Business from University of Maryland. Linda has extensive experience with in-house teaching and program specific training on topics to include compliance training in exports and organizational conflicts of interest. She is a member of National Contract Management Association (NCMA) and Armed Forces Communications & Electronics Association (AFCEA). Linda practices her craft through her business philosophy to develop profitable relationships for everyone. During her free time, she enjoys boating, watersports, outdoor hiking and football.

“Linda’s ability to manage complex projects coupled with her commitment to the ever-changing government contracting industry very much align with the firm’s mission to provide exceptional service to our clients, and we are delighted to welcome her to our senior team,” said CEO, Mark Cissell.

About KatzAbosch

Founded in 1969, KatzAbosch is one of the largest CPA and business consulting services in the Mid-Atlantic region. As a Maryland accounting firm, our mission is to provide the highest quality accounting, tax, financial and management consulting services to our regional clients. We understand the needs and challenges of our clients and we have made it our obligation to create, grow and protect asset value. KatzAbosch is consistently named a Best Accounting Firm to Work For in Accounting Today and has been named a Top 200 Accounting Firms in the Nation by Inside Public Accounting for 2014. Our firm is also ranked among the Top 15 Largest Accounting Firms in the Baltimore Area by the Baltimore Business Journal and as a Top 100 Workplace in Baltimore by The Baltimore Sun.

For more information, contact: Kelly Ernest, 410.307.6388 or kernest@KatzAbosch.com.

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KatzAbosch Client, BITHENERGY, Partners with Columbia Association (CA) on New Energy Project

Columbia Association (CA) has taken a significant stride in using clean energy and reducing its carbon footprint by partnering with BITHENERGY and SunEdison on a cutting-edge project.
Each year for the next 20 years, CA will be purchasing 2,500 megawatt-hours of solar electricity generated from approximately 2 megawatts of a new 10-megawatt solar farm being built off Route 32 near Interstate 70, in western Howard County. This 2-megawatt portion of the farm is a total of 12 acres, equivalent to nine football fields of solar panels.

The energy produced will provide enough clean, renewable power to meet the needs of two of CA’s fitness facilities – Columbia Athletic Club and Columbia Gym – the equivalent of nearly 25% of CA’s total electricity consumption each year. The project also will eliminate about 1,000 metric tons of carbon dioxide emissions associated with CA’s operations.

“We are delighted that the Columbia Association will benefit from the clean, renewable energy that will be generated from our 10-megawatt solar power plant that is being built in Howard County,” said Robert Wallace, president and CEO of BITHENERGY. “Our engineering staff has worked diligently over the last few years to make the Nixon Solar Farm a model solar energy project that simplifies the process by which governments, nonprofits and commercial businesses seamlessly benefit from robust renewable energy options. Once completed, the Nixon Solar Farm will be the largest solar power plant in Howard County and one of the largest in the state of Maryland.”

A video about CA’s solar farm project can be seen at www.youtube.com/watch?v=adbAYx58shg.

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KatzAbosch Has Been Selected as one of The Baltimore Sun’s Top Workplaces

Baltimore, MD. – December 5, 2014 – KatzAbosch is pleased to announce that it has been selected as one of The Baltimore Sun‘s Top Workplaces.

On Sunday, December 7th, The Baltimore Sun is publishing “The Baltimore Sun Top Workplaces”– a list of the best places to work in the Baltimore metro area. KatzAbosch has been named for the past three years consecutively. KatzAbosch attributes the award to the many professional perks we offer to help our employees grow such as:

• A great work/life balance.
• A high-tech education facility with training that exceeds professional requirements.
• Every employee has an office; no cubes.
• High-tech paperless office environment.
• Work from home options.
• Performance evaluations that provides timely career development.
• Coaching/mentor program that enhances career paths.
• Diverse clients for a better learning experience.
• Extensive research resources to ensure quality and efficiency.

“We are honored to have been selected for the award, particularly as the judges were our employees,” said Mark Cissell, President and CEO.

The Top Workplaces are determined based solely on employee feedback. The employee survey is conducted by WorkplaceDynamics, LLP, a leading research firm on organizational health and employee engagement. WorkplaceDynamics conducts regional Top Workplaces programs with 40 major publishing partners across the United States. Over the past year, more than 5,000 organizations and 1 in every 88 employees in the U.S. have turned to WorkplaceDynamics to better understand what’s on the minds of their employees. Through its workplace improvement offerings, WorkplaceDynamics provides solutions, training and tools to help clients improve their workplace. For more information about the Top Workplaces lists and WorkplaceDynamics, please visit www.topworkplaces.com and www.workplacedynamics.com.

About KatzAbosch

Founded in 1969, KatzAbosch is one of the largest CPA and business consulting services in the Mid-Atlantic region. As a Maryland accounting firm, our mission is to provide the highest quality accounting, tax, financial and management consulting services to our regional clients. We understand the needs and challenges of our clients and we have made it our obligation to create, grow and protect asset value. KatzAbosch is consistently named a Best Accounting Firm to Work For in Accounting Today and has been named a Top 200 Accounting Firms in the Nation by Inside Public Accounting for 2014. Our firm is also ranked among the Top 15 Largest Accounting Firms in the Baltimore Area by the Baltimore Business Journal.
For more information, contact: Kelly Ernest, 410.307.6388 or kernest@KatzAbosch.com

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The SALT Shaker: U.S. Supreme Court Hearing – Comptroller vs. Wynne

On Wednesday the Supreme Court hearing for the Wynne’s was held. Quick reminder – this case involves offsetting the Maryland Piggyback taxes with taxes paid to other states. This is an interesting case when you look beyond the details. The real issue for the court to decide is which is more important – states’ rights or the Commerce Clause in the Constitution. The decision could have an impact well beyond Maryland taxes.

I read the transcript from the hearing and based on the questions asked by the justices, there seems to be a lean towards the taxpayers. The Maryland Solicitor General represented Maryland; the justices interrupted him many times to challenge what he was saying. Several justices asked pointed questions that seemed to indicate they disagree with the Maryland position, particularly Chief Justice Roberts. The court has until the end of the current term in June to make a decision, so we will not know for sure until then.

Please contact the KatzAbosch SALT Group if you have any questions regarding Maryland tax filings, or any other SALT issues.

The SALT (State and Local Tax) Shaker is prepared by Andy Bareham, CPA, MST, Chair of the KatzAbosch SALT Group.

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KatzAbosch Client – The Classic Catering People Was Named Winner of Maryland’s 2014 Business Philanthropy Award in the Small Business Category

On Friday, October 24, 2014, The Classic Catering People, was named winner in the small business category at the 2014 Maryland Business Philanthropy Awards.The Maryland Business Philanthropy Awards program is a joint effort between the Maryland Chamber of Commerce and the Baltimore Business Journal to recognize Maryland businesses that have demonstrated a commitment to improving the quality of life for residents of the state through their philanthropic efforts. All Maryland-based businesses that have made a positive contribution to Maryland residents through financial support, in-kind donations or volunteer efforts were eligible for nomination. A panel of business and community leaders judge the nominees based on the extent of the service provided to the community, the impact on the community and the commitment the business has shown to the community over time. Judges also take into consideration the size of the business relative to their corporate giving.

For more than 40 years, the Classic team has been bringing people together over memorable cuisine. All along the way, they have served the community as passionately as their clients.

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Maryland – Cash Investments and Tax Credits Add up to Business Success for Cybersecurity Companies

The Internet Age has changed the business environment in the world. For instance, Silicon Valley in California has become the home to many high-tech business giants. New businesses attracted to Silicon Valley have brought high-paying jobs and with the jobs comes tax revenue for the state. With the changeover from a manufacturing economy to a digital economy, the states want to attract new age businesses that employ highly paid professionals and the tax base that comes with this industry.

Recognizing the positive impact having a high-tech industry centered in your state can bring, Maryland is offering incentives for Cybersecurity companies that locate here. With its close proximity to Washington DC and a highly educated workforce, Maryland has the perfect combination of factors for rapid growth of the Cybersecurity industry. Recognizing the benefits of Maryland, the federal government has made Fort Meade, Maryland a hub for Cybersecurity and is looking for other locations in the nearby Maryland suburbs to establish relationships with Cybersecurity businesses. Many of the federal government agencies that are focused on Cybersecurity are centered in Maryland including NSA, U.S. Cyber Command and the National Institute of Standards and Technology, making this area one of the fastest growth areas in the country for the industry.

With the rapid expansion of Cloud Computing and the steady stream of new “Bugs,” everyone is worried about their online security. Both government and commercial businesses need help with protecting their computer operations and are seeking qualified consultants. Like other states, Maryland has developed Cybersecurity experts, education and training programs, technology, products, systems and infrastructure. These programs are specifically tailored to the needs of the emerging Cybersecurity industry. The states are fighting to attract these types of businesses to their state because of the good jobs and tax revenue that comes from this new age business model. Recently Maryland lured a Cybersecurity company – Luminal – to relocate to the state with several cash and tax credit incentives. The incentive package included a $600,000 investment by the state in the company and tax credits. These incentives helped the company secure a new round of market investments so the company can move up to the next level of growth.Beginning in 2014, Maryland began offering a tax credit to Cybersecurity companies. The Maryland Cybersecurity Tax Credit is based on new investments in the Maryland-based company. The investors do not get the tax credit, because the Maryland lawmakers wanted the incentive to stay in Maryland. Instead the tax credit is given to the Cybersecurity company. The tax credit is equal to 33% of investments in the Qualified Maryland Cybersecurity company. The credit can be up to $250,000 per investor and 15% of the program appropriation. The tax benefit is realized in one of three ways – reduce the income tax obligation of the company or reduce the owner’s tax bill or the company can get the credit in cash if there is no tax obligation. The details as to what is a qualified Cybersecurity company are extensive. In summary it is a Maryland-based, small non publicly traded company that does specific activities and has a qualified investor, who leaves the investment in the company for a period of time.In late 2013, the Maryland Department of Business and Economic Development began accepting applications for the first year of the state’s CyberSecurity tax credit. When the state’s fiscal year ended June 30, 2014, a little over $1 Million of credits had been issued to three qualified companies based on 15 investments in these companies. The state budgeted $3 Million for the credit and only one-third of the money was claimed. There were several reasons suggested why some of the state money was left on the table such as the short six-month period for applying for the credit, the strict qualification requirements and the fact that the credit dollars must remain in Maryland. For the new year starting July 1, 2014, state officials are hoping more businesses will be attracted to apply for the credit and other incentives offered to businesses. The Maryland Business and Economic Development officials are working on ways to bring new investments to the state by actively courting Cybersecurity companies with cash investments of state dollars and tax credits. The state is hoping the creativity of the investment market will find new ways to entice investors into the Cybersecurity industry and overcome the rule about the investment remaining in Maryland.

It is pretty obvious that Cybersecurity will be a high priority for government agencies and businesses for the foreseeable future. The almost daily news reports about high profile digital “breakins” will ensure this industry enjoys above average growth and business success. Cybersecurity companies should make sure they take advantage of the government incentives – such as the Maryland tax credits and cash investments – to improve their bottom line and add to their growth factor.

Andy Bareham, a Principal with KatzAbosch, joined the firm in 2008. He has more than 25 years of tax experience with a focus on helping businesses with state tax matters. He is a member of the firm’s Tax Department and is chair of the firm’s State and Local Tax group. Andrew speaks frequently on state tax topics such as planning strategies, audit and appeals representation and compliance issues. For more information, please contact Andy at abareham@katzabosch.com or 410.307.6442. www.katzabosch.com

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Contractor Alert: Maryland Sales and Use Tax Exemption on Qualifying Energy Equipment

The Maryland sales and use tax does not apply to the sale of geothermal, residential wind energy, or solar energy equipment.

This exemption includes the sale of equipment and other material that is attached, applied, fabricated, or assembled that is used to comprise a complete energy system.  However, material such as sand, gravel, or grout is not considered equipment or a component of equipment.  As a result they are not exempt from the tax.

Vendors do not need to collect sales and use tax on the sale of qualifying equipment.  Instead, they should receive a signed statement from the buyer certifying the equipment purchased is qualifying geothermal, residential wind energy, or solar energy equipment.  The vendor should retain the statement with the record of sale.

If sales and use tax was mistakenly paid on the sale of a qualifying item, the payer of the tax may apply for a refund. The KatzAbosch SALT team would be happy to help with refund applications.
Please contact the KatzAbosch SALT Group if you have any questions regarding the sales and use tax exemption on qualifying energy equipment.

The SALT (State and Local Tax) Shaker is prepared by Dan Bottner, Member of the KatzAbosch SALT Group.

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Maryland - Cash Investments and Tax Credits Add up to Business Success for Cybersecurity Companies

The Internet Age has changed the business environment in the world. For instance, Silicon Valley in California has become the home to many high-tech business giants. New businesses attracted to Silicon Valley have brought high-paying jobs and with the jobs comes tax revenue for the state. With the changeover from a manufacturing economy to a digital economy, the states want to attract new age businesses that employ highly paid professionals and the tax base that comes with this industry.

Recognizing the positive impact having a high-tech industry centered in your state can bring, Maryland is offering incentives for Cybersecurity companies that locate here. With its close proximity to Washington DC and a highly educated workforce, Maryland has the perfect combination of factors for rapid growth of the Cybersecurity industry. Recognizing the benefits of Maryland, the federal government has made Fort Meade, Maryland a hub for Cybersecurity and is looking for other locations in the nearby Maryland suburbs to establish relationships with Cybersecurity businesses. Many of the federal government agencies that are focused on Cybersecurity are centered in Maryland including NSA, U.S. Cyber Command and the National Institute of Standards and Technology, making this area one of the fastest growth areas in the country for the industry.

With the rapid expansion of Cloud Computing and the steady stream of new “Bugs,” everyone is worried about their online security. Both government and commercial businesses need help with protecting their computer operations and are seeking qualified consultants. Like other states, Maryland has developed Cybersecurity experts, education and training programs, technology, products, systems and infrastructure. These programs are specifically tailored to the needs of the emerging Cybersecurity industry.

The states are fighting to attract these types of businesses to their state because of the good jobs and tax revenue that comes from this new age business model. Recently Maryland lured a Cybersecurity company - Luminal - to relocate to the state with several cash and tax credit incentives. The incentive package included a $600,000 investment by the state in the company and tax credits. These incentives helped the company secure a new round of market investments so the company can move up to the next level of growth.

 Beginning in 2014, Maryland began offering a tax credit to Cybersecurity companies. The Maryland Cybersecurity Tax Credit is based on new investments in the Maryland-based company. The investors do not get the tax credit, because the Maryland lawmakers wanted the incentive to stay in Maryland. Instead the tax credit is given to the Cybersecurity company. The tax credit is equal to 33% of investments in the Qualified Maryland Cybersecurity company. The credit can be up to $250,000 per investor and 15% of the program appropriation. The tax benefit is realized in one of three ways - reduce the income tax obligation of the company or reduce the owner’s tax bill or the company can get the credit in cash if there is no tax obligation. The details as to what is a qualified Cybersecurity company are extensive. In summary it is a Maryland-based, small non publicly traded company that does specific activities and has a qualified investor, who leaves the investment in the company for a period of time.

In late 2013, the Maryland Department of Business and Economic Development began accepting applications for the first year of the state’s CyberSecurity tax credit. When the state’s fiscal year ended June 30, 2014, a little over $1 Million of credits had been issued to three qualified companies based on 15 investments in these companies. The state budgeted $3 Million for the credit and only one-third of the money was claimed. There were several reasons suggested why some of the state money was left on the table such as the short six-month period for applying for the credit, the strict qualification requirements and the fact that the credit dollars must remain in Maryland. For the new year starting July 1, 2014, state officials are hoping more businesses will be attracted to apply for the credit and other incentives offered to businesses. The Maryland Business and Economic Development officials are working on ways to bring new investments to the state by actively courting Cybersecurity companies with cash investments of state dollars and tax credits. The state is hoping the creativity of the investment market will find new ways to entice investors into the Cybersecurity industry and overcome the rule about the investment remaining in Maryland.

 It is pretty obvious that Cybersecurity will be a high priority for government agencies and businesses for the foreseeable future. The almost daily news reports about high profile digital “breakins” will ensure this industry enjoys above average growth and business success. Cybersecurity companies should make sure they take advantage of the government incentives - such as the Maryland tax credits and cash investments - to improve their bottom line and add to their growth factor.

Andy Bareham, a Principal with KatzAbosch, joined the firm in 2008. He has more than 25 years of tax experience with a focus on helping businesses with state tax matters. He is a member of the firm’s Tax Department and is chair of the firm’s State and Local Tax group. Andrew speaks frequently on state tax topics such as planning strategies, audit and appeals representation and compliance issues. For more information, please contact Andy at abareham@katzabosch.com or 410.307.6442. www.katzabosch.com

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Contractor Alert: Maryland Sales and Use Tax Exemption on Qualifying Energy Equipment

The Maryland sales and use tax does not apply to the sale of geothermal, residential wind energy, or solar energy equipment.

This exemption includes the sale of equipment and other material that is attached, applied, fabricated, or assembled that is used to comprise a complete energy system.  However, material such as sand, gravel, or grout is not considered equipment or a component of equipment.  As a result they are not exempt from the tax.

Vendors do not need to collect sales and use tax on the sale of qualifying equipment.  Instead, they should receive a signed statement from the buyer certifying the equipment purchased is qualifying geothermal, residential wind energy, or solar energy equipment.  The vendor should retain the statement with the record of sale.

If sales and use tax was mistakenly paid on the sale of a qualifying item, the payer of the tax may apply for a refund. The KatzAbosch SALT team would be happy to help with refund applications.

Please contact the KatzAbosch SALT Group if you have any questions regarding the sales and use tax exemption on qualifying energy equipment.

The SALT (State and Local Tax) Shaker is prepared by Dan Bottner, Member of the KatzAbosch SALT Group.

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KatzAbosch Client - BITHENERGY Joins the Latest Round of Contract Awardees for Department of Defense MATOC Project

BITHENERGY, Inc. Of Baltimore, Maryland is selected to support a $7 billion renewable and alternative energy power production federal energy contract.

BITHENERGY, Inc., a leading provider of innovative energy engineering solutions, has been awarded an energy contract that will support a $7 billion renewable and alternative energy power production initiative for the Department of Army. This Multiple Award Task Order Contract (MATOC) has been designated as the key contractual vehicle to be used to diversify the energy production alternatives for military installations throughout the world.

BITHENERGY was chosen as one of the eleven small businesses in the nation that are qualified to bid on future individual solar technology project task orders. The renewable energy work on these contracts will support the Army in meeting its congressionally mandated energy goal of 25 percent production of energy from renewable sources by 2025, and improving installation energy security and sustainability. The U.S. Army Energy Initiatives Task Force (EITF) and the U.S. Army Corps of Engineers, Engineering and Support Center, Huntsville, established the $7 billion MATOC primarily to use for Power Purchase Agreements involving renewable or alternative energy projects greater than 10 megawatts.

Chief Executive Officer Robert L. Wallace stated, “Our selection as one of the MATOC awardees is a potential game-changer for our company. For seven years we have been successfully providing energy management information systems, smart grid solutions, and renewable energy services to our clients in state and local government as well as in universities and healthcare institutions. Our selection to the MATOC contract now provides us an exciting opportunity to provide these and other services in support of our nation’s war fighting effort throughout the world. In some small way we hope this work will supplement the efforts of our brave women and men who put their lives on the line for us each and every day. I believe that this energy diversification effort will not only save our nation money but will provide a more secure environment for our soldiers. We are humbled to be a part of this effort.”

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KATZABOSCH.COM HAS A NEW LOOK

KatzAbosch is proud to announce that our website has undergone a facelift effective October 2014! The firm has enacted new efforts to implement a cleaner, streamlined and more user-friendly web aesthetic. New photography conveys a team environment where all departments communicate and collaborate on new and existing client engagements. The services pages have also been built out and are more organized and easy to access. In addition to some of the cosmetic website updates, the firm hired local public relations company DAASN to apply stronger SEO tactics and keyword implementation to targeted industry niches on the backend. Furthermore, the firm is continuously involved on social platforms that help drive web traffic as well.

“We have added 60 pages to the website, particularly in our services areas, in order to showcase our breadth and depth of business solution offerings,” says Kelly Ernest, Marketing Manager, at KatzAbosch. “Our firm is unique in that we provide a customized business solution through our vast list of service offerings and specialized expert human capital. I think the website now helps to convey this message. In addition, through our SEO campaigns, we have started to see an uptick in page views and website engagement.”

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