Maryland phases in single sales factor apportionment

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On April 24, 2018, Maryland Governor Larry Hogan (R) signed legislation that phases in single sales factor apportionment over a five-year period beginning with the 2018 tax year. [House Bill 1794 and Senate Bill 1090]

The takeaway

Maryland expects its new apportionment formula will attract and retain more businesses within the state by providing possible tax relief to those in-state corporations, including worldwide-headquartered companies. The change also places Maryland in alignment with other states that have enacted legislation modifying apportionment formulas.  However, while other states also have enacted combined reporting requirements, Maryland remains a separate company reporting state.  While the Commission’s Report did not advocate for the enactment of combined reporting, it remains to be seen whether the state eventually will enact such legislation.

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Peter Michalowski

Peter Michalowski

State and Local Tax Leader, PwC US

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