RECAP: Legislative Affairs Member Meeting - Delegate Kathleen Dumais and Doug Lindholm, President and Executive Director, COST

Posted Date: 
October 18, 2013

October 18, 2013

Guest Speakers: Delegate Kathleen Dumais and Doug Lindholm, President and Executive Director, COST

Vice-Chair of the Legislative Affairs Committee, Tom McElroy, welcomed MCCC members and introduced our guest speakers, Delegate Kathleen Dumais, District 15, and Doug Lindholm, President and Executive Director, Council on State Taxation (COST).

Doug Lindholm presented on tax policy issues on a national level with comparison to current practices in Maryland. COST’s goal is to advance equitable and nondiscriminatory taxes for their clients who operate in multiple jurisdictions. He said in order to design a tax structure that creates growth, legislatures should implement taxes that are the least harmful and tax in a way that doesn’t inhibit competitiveness. Examples include property taxes on immovable property, value added taxes and consumption taxes.

Taxes that are most harmful to growth and investment include corporate income and franchise taxes, transaction taxes on business inputs and services, property taxes on business property, personal income taxes on business income, and gross receipts taxes.

Lindholm described corporate income tax as inherently unstable because without income, there is nothing to tax. Maryland’s corporate income tax contributes only 2.75% of total state and local taxes and 9% of business taxes. It is in the Maryland business community’s best interest to avoid combined reporting. It is used by less than half of the states that have an income tax, does not provide a stable source of income and it brings uncertainty and unpredictability to businesses, as well as significant audit and legal costs..

Click here to view Doug Lindholm's full presentation.

Delegate Dumais discussed her proposed bill to create a commission on tax policy, reform and fairness. If created, the commission would include a group of legislators and subject matter experts to evaluate the state tax structure and work to create a long term plan to support growth.

The bill was introduced for the first time last year and passed the house 134-0, however the Senate did not vote on the bill. Delegate Dumais plans to reintroduce the bill this session and Senator Brian Feldman plans to cross file the bill in the Senate.

Gigi Godwin, President and CEO of MCCC said the Chamber and its Board of Directors are very invested in this issue and intend to support this initiative.

Delegate Dumais stated that she believes Maryland is a good place to do business, but there is room for improvement. Maryland has one of the best school systems in the country, AAA bond rating and is the best state for entrepreneurs. However, Maryland needs to create a competitive business climate that both attracts and retains businesses. 

MCCC Strategic Partners