State passes legislation to give one-year write-offs for manufacturing equipment

The Maryland General Assembly included one-year write-offs of manufacturing equipment for tax purposes in its end-of-session legislative rush on April 10.

Gov. Larry Hogan (R) signed the new tax law on April 11.

It was part of Hogan’s job creation initiative, attached to better-known provisions allowing for special tax incentives for manufacturing in less prosperous areas of Maryland, including parts of Baltimore, Western Maryland and the Eastern Shore.

Those incentives include a 10-year exemption from the state property tax and income and sales tax credits.

The one-year equipment write-off applies throughout the state, noted Sen. Richard Madaleno (D-Kensington).

The faster write-off aligns Maryland with federal tax law, he added. Madaleno is reportedly eyeing the Democratic gubernatorial primary next year to challenge Hogan’s re-election.

Another tax bill passed in the end-of-session rush would expand Comptroller Peter Franchot’s tax enforcement powers.

The bill, also passed April 10 and signed into law by Hogan April 11, would allow his office to levy fines on tax preparers with high rates of questionable client returns.

The comptroller’s office has been suspending such preparers during the last three tax preparation seasons, including four new suspensions in Montgomery County on April 7. The newly suspended county preparers are Dem Tax and Accounting Services and Metrotax Services in Silver Spring and Dieudonne Sossou and Global Alliance Solution LLC in Germantown.

The new law will take effect July 1, said Comptroller Press Secretary Alan Brody. It will allow the comptroller’s office to go to court and obtain injunctions to shut down allegedly fraudulent tax preparers while investigating them. And it requires tax preparers to be licensed by the state’s Board of Individual Tax Preparers.

Perhaps most importantly, Brody said, the new law gives the comptroller’s office authority to investigate tax fraud. Until now, its 35-member Field Enforcement Division has been limited to alcohol, tobacco and motor vehicle tax cases.

“Given how big a problem tax fraud has become in recent years,” Brody said, this expansion of authority is needed.

The legislature passed several other business-related bills at or near the end of the lawmakers’ session. Hogan has not yet indicated whether he will sign them.

A bill affecting the state’s rapidly growing craft brewing industry raises the amount that can be served annually in a “tap room” from 500 to 2,000 barrels. Diageo Beer Co. USA, the international giant and parent of Guinness, indicated that with passage of this large increase, it will pursue building a large Guinness brewery in Baltimore County.

The bill also requires tap rooms to close at 10 p.m. every day, while later closing times permitted under existing local laws are grandfathered.

Another bill will allow state Attorney General Brian Frosh to sue generic drugmakers to block price hikes that he deems “unconscionable” if he finds the increases are not justified by higher manufacturing or distribution costs.

Finally, a bill passed that requires most employers to grant a minimum of five days paid sick leave annually to employees.

This applies to companies that don’t already have more generous sick leave policies in place.

A bill to add licensed growers to the state’s medical marijuana industry was defeated. Medical marijuana is expected to go on sale in licensed stores in September. 



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