Office of the Comptroller and Department of Legislative Services - Maryland Business Taxes - Study
Summary
SB33 requires the Office of the Comptroller and the Department of Legislative Services to study Maryland’s business tax structure and recommend changes to make taxation of corporations and other business entities more fair and equitable. The study must examine whether Maryland should adopt combined reporting for unitary groups of affiliated corporations using the water’s-edge method, and it must also review how other states have used combined reporting and what effects it has had across industries.
The bill also directs the agencies to evaluate other possible business tax approaches, including gross receipts taxes, value-added taxes, and alternative minimum taxes, either instead of or in addition to current taxes. In addition, the study must consider better ways to measure whether tax policies used as economic development incentives are actually effective and efficient. A report with findings and recommendations is due to the Governor and General Assembly by December 15, 2026.
Impact
SB33 does not itself change tax law or impose new taxes; instead, it creates a formal study requirement for two state agencies and sets a reporting deadline. Its practical impact is to place combined reporting and broader business tax reform options under state review, potentially laying the groundwork for future legislation affecting corporate income tax, affiliated corporate groups, and alternative business tax structures. The bill would affect the Comptroller’s Office, the Department of Legislative Services, corporations, and other business entities doing business in Maryland.
Sentiment
Based on the bill text and the absence of recorded committee testimony or votes in the provided materials, the bill appears to be framed as a policy study rather than a direct tax increase or tax cut. The overall tone is exploratory and analytical, suggesting interest in reviewing Maryland’s business tax competitiveness and fairness before making substantive changes. No explicit support or opposition is documented in the available context.
Contention
The main policy issues likely to generate debate are whether Maryland should adopt combined reporting, whether the water’s-edge method is the right approach, and whether alternative business taxes such as gross receipts or value-added taxes should be considered. Businesses that could be affected by combined reporting, especially multi-state corporate groups and industry sectors with different tax profiles, would likely have the strongest interest in the study’s conclusions. Another likely point of contention is the evaluation of economic development tax incentives, since such reviews can lead to scrutiny of existing tax breaks and credits.