Maryland Eyes Pioneering Tax Approach for Multinationals
In a move that could position Maryland at the forefront of state-level corporate tax policy, the House of Delegates has passed a significant proposal that would overhaul the way multinational companies report their income. The proposed legislation, embedded within the House spending package SB 362, seeks to introduce a worldwide combined reporting system. This method would require corporations to calculate their taxes based on the global income attributable to Maryland, potentially setting a precedent for other states to follow.
Supporters of the bill argue that a worldwide system would effectively close loopholes that allow companies to shift profits to overseas subsidiaries, thereby avoiding higher tax rates in the United States. This change aims to ensure that corporations pay their fair share of taxes on income generated from their operations within the state.
The House’s endorsement of the bill, demonstrated by an 89-45 vote, has now placed it before the Senate for consideration. However, Senate President Bill Ferguson (D) has expressed reservations. In a recent interaction with reporters, Ferguson highlighted concerns that may influence the Senate’s stance on this transformative tax policy.
As deliberations continue this week, all eyes are on Maryland’s Senate leadership, whose decision will either make Maryland a trailblazer in corporate tax reform or maintain the status quo. The outcome of these discussions could have far-reaching implications not only for Maryland but also for the broader conversation around corporate taxation in the United States.
