In March 2014, Maryland Senate President Mike Miller and House Speaker Mike Busch convened the Maryland Economic Development & Business Climate Commission, which has also come to be known as the Augustine Commission, after the surname of its chair. The commission has examined the state’s economic development structure and incentive programs, and has made 14 recommendations (listed below) that are designed to keep Maryland competitive in economic and private sector growth and prosperity.
The commission submitted a report to Miller and Busch on Feb. 12, and plans to report again in September 2015 on state and local business-related taxes and tax incentives.
Norman R. Augustine was chosen to head the commission by Miller and Busch. Appointed to the commission by Miller were Stephen Hershey, Jr.; Ed Kasemeyer ;and Catherine Pugh. Appointed by Busch were Wendell Beitzel; John Bohanan, Jr.; William Frick; and Jay Walker.
Appointed by Miller and Busch were Edward Ben; Peter Armistead Bowe; David Brinkley; Calvin Butler, Jr.; Douglas Doerfler; Len Foxwell; Brian Gibbons; Joshua Greene; Glen Ives; Jon Laria; Victor McCrary, Jr.; Darryll Pines; DeRionne Pollard; Kenneth Rigmaiden; Mary Ann Scully; Robert Smith; Edward Stoltz; and Christy Wyskiel.
- Recommendation 1: Provide an individual income tax exemption for certain income of members of pass-through entities.
- Recommendation 2: Accelerate the phase-in of the currently planned increase in the refundable earned income tax credit.
- Recommendation 3: Reduce, over three years, the corporate income tax rate from 8.25% to 7%.
- Recommendation 4: Provide single sales factor apportionment for all corporations.
- Recommendation 5: Do not adopt combined reporting and indicate clearly the intent not to do so.
- Recommendation 6: Adopt a policy that eliminates Maryland corporate income tax from being imposed on repatriated overseas earnings that have been taxed abroad, to the extent that the funds are invested in Maryland.
- Recommendation 7: Accelerate to 2016 the timeframe for recoupling of the state estate tax exclusion amount to the federal estate tax exclusion amount.
- Recommendation 8: Provide funds to implement a modern integrated tax system that enables better collection, analysis and dissemination of tax data.
- Recommendation 9: Rigorously evaluate tax incentive programs and make changes necessary to assure that these programs are effective.
- Recommendation 10: Provide sunset provisions when approving business tax credits, and amend the Tax Credit Evaluation Act to provide for periodic review of tax credits, well before the related sunset provisions take effect.
- Recommendation 11: Develop methods to better analyze and track claims for tax credits, particularly for tax credits that are filed electronically, and to report such information to the governor and the General Assembly.
- Recommendation 12: Reduce to the prime rate, over a three-year period, the interest rate for tax deficiencies and refunds.
- Recommendation 13: Institute a private letter ruling process to provide tax guidance, and adopt an appropriate administrative fee to be paid by the requesting taxpayer.
- Recommendation 14: Review state and local individual income tax rates and brackets to determine reductions that will reduce tax burdens, and implement such reductions as soon as the state’s fiscal circumstances permit.