Archive for the ‘Maryland’ Category

Did a Maryland Tax Increase Cause Taxpayers to Flee the State?

Monday, July 9th, 2012

An organization called ChangeMaryland has a new study that states that 31,000 individuals left the state from 2007 to 2010. ChangeMaryland believes that it’s the tax hikes in the state that have caused the exodus.

Maryland is a decidedly liberal (“blue”) state with relatively high taxes. The study states that the millionaire’s tax, which ran from 2007 to 2010, cost the state $1.7 billion in tax revenues: Individuals impacted by the tax fled to low-tax states (primarily Florida). As I noted last December, California lost over 720,000 taxpayers and $48 billion of AGI from 1993 to 2008 while the population of the state increased.

There is an obvious conclusion: Tax rates matter, and individuals will move to avoid higher taxes. I’m an example of that, and it appears that many former residents of Maryland are, too.

Sales Tax on Services Under Consideration in Maryland

Tuesday, February 28th, 2012

For those who haven’t followed Clayton Financial and Tax, we now have an office in Maryland. Our charges for preparing your return aren’t dependent on whether you’re in our Las Vegas or Bethesda office. However, that may soon change.

Shiela Hixson and James Gilchrist, two Democrats in the Maryland House of Delegates (the lower chamber of Maryland’s legislature) introduced legislation that would add sales tax to 29 different services. The services that would be taxed under this proposed legislation include tax preparation, gyms, cable television, consulting, and dating services.

If this tax passes, the added costs to our business will be passed on to our customers. And, yes, there are always added costs in compliance: The time we will have to spend complying with bureaucratic paperwork.

I haven’t been following Maryland’s budget situation, but I’m sure they (like every state) are facing some shortfalls. The typical Democratic response is to increase revenues, not decrease expenses. That may be one of the reasons “Blue” states find themselves with worse budget situations than “Red” states. However, I might just be too cynical.

[Image of Maryland's state flag from Wikipedia]

Two Baltimore Bail Bondsmen Found Taxes to be the Least of Their Problems

Monday, July 11th, 2011

Many businesses require licenses. In Maryland, you need a license to be a bail bondsmen (I suspect you do in most states). One of the rules in Maryland is that you can’t be a convicted felon if you’re a bail bondsmen.

Milton Tillman Jr. and his son, Milton Tillman III, had a problem. The elder Tillman had a felony conviction, and they were the owners of Four Aces Bail Bonds in Baltimore. The business was doing quite well, but the elder Tillman couldn’t legally run the business. Now, you and I probably would have never gone into the business given that issue. Alternatively, we’d sell the business so that we could be in compliance with the law.

The Tillmans decided that one felony deserved another: They decided not to pay income tax on their business. With the business being profitable, that’s another problem…especially when you owe the IRS somewhere between $400,000 and $1 million. Things only got worse when the government listened in on a conversation where the father described how he was going to hide his running of the business, and how he would transfer money out of the business.

Oops.

Both Tillmans pleaded guilty earlier this year. The elder Tillman pleaded guilty to three counts (filing a false tax return, wire fraud, and working as a bail bondsman as a felon); the younger Tillman faced solely a tax charge and will be able to remain in the bail bond business. The elder Tillman will enjoy 51 months at ClubFed. Both Tillmans will need to make restitution to the IRS of the tax due to the government.

A Bong Tax

Sunday, February 3rd, 2008

If a Maryland State Senator has his way, buyers of bongs in Maryland will soon have to pay a special tax. C. Anthony Muse (D-Prince Geoerge’s County) introduced two bills on Wednesday that would add a $20 tax for all tobacco accessories except rolling paper.

For those who don’t know a bong is a water pipe used to smoke tobacco or cannabis (marijuana). Senator Muse would have preferred to outlaw the accessories completely; he believes that they are “drug paraphernalia—not tobacco paraphernalia.” His measures would also require stores selling such items to check id’s and record purchasers names.

Senator Muse’s measures will face committee hearings in the Maryland legislature before coming up for any votes.

Maryland Tax Increases Are a Go

Friday, January 11th, 2008

Yesterday, Judge Thomas F. Stansfield dismissed the lawsuit challenging Maryland’s $2 billion tax increase. “Although the Court is inclined to agree with the Plaintiffs regarding the reprehensible nature in which the Legislature conducted itself, the remedy they seek in redress is too drastic a notion to accept,” the judge said.

The five Republican lawmakers and the Carroll County (MD) businessman who brought the suit will decide today whether or not to appeal the decision.

It’s Only A Technicality….

Sunday, January 6th, 2008

I haven’t posted on the new taxes that citizens in Maryland face. The overwhelmingly Democratic General Assembly passed a huge tax increase last November. One portion of the increase is an increase in the state’s sales tax.

But a problem has surfaced: Maryland Republicans have filed a lawsuit to stop the tax increase. According to this report by WJZ, the Maryland Senate took five days off during the special session (called to have the tax increases passed) without permission of the General Assembly. Apparently the Maryland state constitution prohibits such a vacation.

Senator Allan Kittleman told WJZ, “This is actually an attempt to make sure that we have transparent government, that we have integrity in our government and that the rule of law is kept.” But Maryland Democrats say the whole thing is a bunch of hot air.

Meanwhile, if you live in Maryland you’re paying higher taxes. It’s possible you won’t be paying as much after a judge rules (likely in the next two weeks) on the lawsuit. Of course, it’s only a technicality….