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CPAs would be happy to help state government plot a strategy to finance education | READER COMMENTARY

Taxing the work of certified public accountants is bad tax law, according to Maryland's certified public accountants.
Taxing the work of certified public accountants is bad tax law, according to Maryland's certified public accountants. (emilie zhang // Shutterstock)

I want to address the concerns about how certified public accountants oppose the proposed sales tax on services expressed by reader Lorraine Rohlik (“Lawyers and accountants are quick to oppose taxing themselves, slow to offer alternatives to fund Kirwan,” Feb. 24). Our opposition is not reactive or reflexive, it is proactive and meant to prevent a bad tax policy from being passed that may be doomed to repeal once the realities of the complexity and cost of implementation, administration and collection are realized.

On Jan. 23, about 200 CPA members of the Maryland Association of CPAs visited dozens of legislators in Annapolis and handed out a booklet titled, “Guiding Principles of Good Tax Policy." It is a guide created by our State Tax Committee and members of our national organization, the American Institute of CPAs, to advise lawmakers on how to create good tax laws. We have been handing out that guide and offering our expertise to the legislators in Annapolis for the past decade.

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The proposed sales tax on services bill (H.B. 1628) actually violates six out of 12 principles of good tax policy (“Expanding state sales tax to pay for school improvements would ‘destroy our economy,’ Maryland Gov. Hogan says,” Feb. 20). Additionally, we have supported two current bills, the Commission on Tax Policy Reform and Fairness (H.B. 185/S.B. 223) and the Maryland Tax Revision Commission (H.B. 765) and requested amendments to add at least one licensed Certified Public Accountant to these study groups to help craft good tax policy legislation. We have always volunteered to be at the table when legislators, the comptroller and the governor want our help in explaining the implications of proposed tax policies. In fact, we were at the table when the Tax Cut and Jobs Act was enacted to discuss the impact on Maryland taxpayers and the government.

In this case, when our members were at CPA Day in Annapolis, we warned legislators of the implications of the significant and complex compliance costs that come from taxing professional services. Actually, five major states enacted similar legislation and had to repeal it due to the complexity and costs of compliance (Florida, Michigan, Minnesota, Massachusetts and Utah). I hope you agree that allowing legislation to pass that would ultimately be repealed is not a good tax policy and ultimately would not help fund Maryland’s Blueprint for the Future?

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Maryland CPAs stand ready to lend our “prodigious financial expertise” to help solve Maryland’s funding dilemmas and reach its ambitious goals as we have since our founding in 1901.

Tom Hood, Towson

The writer is CEO of the Maryland Association of Certified Public Accountants.

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