In September, local business leaders joined Maryland PIRG to applaud Gov. Martin O’Malley for proposing to close corporate tax loopholes.

Maryland PIRG is lobbying legislators from around the state to educate them about tax loopholes and urge them to support the measure. We’ve also brought together small business leaders from across Maryland to call for tax fairness and a level playing field.

Not Paying Their Way

According to a July 2007 report by the comptroller of Maryland, almost half of profitable corporations in Maryland didn’t pay any state income tax in 2005. That leaves in-state businesses, who pay their taxes, at a competitive disadvantage.

“It’s outrageous that big corporations aren’t paying their share while our schools are struggling to provide textbooks for all the kids, and our roads and bridges are crumbling around us,” said Mark Cook, proprietor of Cook Networking, an IT company based in College Park.

In recent years, lawmakers passed laws to close individual loopholes, but corporate accountants quickly devised new tax avoidance schemes to get around the rules. Maryland PIRG advocates “combined reporting,” which offers a comprehensive solution to corporate tax loopholes by requiring corporations with subsidiaries or affiliates to file a single tax return that lists all of the conglomerates’ business activity, rather than treating each subsidiary as a separate entity.

Fundamentally, this is an issue of fairness,” said Johanna Neumann, policy advocate for Maryland PIRG. “Maryland citizens and local businesses should not be left to foot the bill for vital services due to multi-state corporations’ tax-avoidance schemes.”

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