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.

Read More

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.

Read More

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.

Read More