2003 State Tax Update

The Spring issue of Tax Talk, the newsletter of the Section of Taxation of the Maryland State Bar Association has two summaries of tax legislation passed in the recent session of the Maryland General Assembly. One is by Evelyn Pasquier, the other by the Comptroller's Office.

H.B. 438 is worthy of note because it imposes upon various officers and owners of corporations and LLCs personal liability for unpaid vessel excise that the business entity is required to collect and pay over. The language is identical to a similar provision with respect to sales tax that I argued, to no avail, constituted a violation of due process. It’s significant because previously the sales tax provision stood alone in its sweeping imposition of personal liability. (OK, I'm a sore loser.)

Now that this broad imposition of liability has been extended with respect to another tax, there is a possibility that it might be further extended. For instance, the failure to collect and pay over withholding taxes might create personal liability by virtue of an individual's status rather than, as is currently the case, the individual's dereliction of duty.