MSATP’s mission is to support and protect our members’ businesses, advocate for the profession, and ensure the highest standards of professional integrity. We work tirelessly to represent your interests in the legislative process, striving to create a favorable and predictable tax environment for all.

For a comprehensive overview of all the legislative actions and details of the bills tracked by MSATP, you can download the full 2024 Legislative Report here.

Reporting Requirements for Beneficial Ownership

Overview
The Corporate Transparency Act, which went into effect on January 1, 2024, mandates businesses meeting specific criteria to submit a Beneficial Ownership Information (BOI) Report to the Financial Crimes Enforcement Network (FinCEN) by January 1, 2025.

Our Advocacy
We support delaying the January 1, 2025, BOI reporting deadline for small businesses. As of November 2024, FinCEN had received only 6.5 million of the projected 32 million reports. Additionally, the strict 30-day window for updating changes presents challenges for tax professionals who may uncover necessary amendments during annual client meetings ahead of tax season.

Current Updates
In April 2024, the AICPA and others raised concerns about the timeline in a letter to the U.S. Department of the Treasury and FinCEN.

On December 23, 2024, the Fifth Circuit Court of Appeals reversed its prior decision, reinstating the January 1, 2025, deadline. However, on December 27, 2024, the court vacated FinCEN’s authority to enforce reporting requirements. We continue to advocate for extending the deadline and will share updates as they become available.

What Members Should Know
To assist clients with BOI compliance:

• Begin compiling the required information from clients.
• Be prepared to file reports if enforcement resumes.
• For additional information, review the court’s decision: Fifth Circuit Opinion.

MSATP remains committed to keeping members informed as this issue progresses.

Oppose Sales Tax on Professional Services

The Issue
As the voice of accounting, tax, and financial professionals in Maryland, the Maryland Society of Accounting and Tax Professionals (MSATP) strongly opposes any legislation proposing a sales and use tax on professional services. Such a tax would have far-reaching negative consequences for Maryland businesses, consumers, and the professionals who serve them, including CPAs, accountants, tax professionals, and bookkeepers.

Key Concerns
A sales tax on professional services would:

1. Burden Small Businesses: Small businesses that rely on outsourced services, such as accounting and consulting, would face higher costs, reducing profits and forcing difficult decisions about reallocating resources. On the other side, small firms providing these services would need to absorb additional administrative costs to collect and remit sales taxes, limiting their ability to grow.
2. Create Complex Compliance Challenges: Taxing services would introduce administrative difficulties for both the state and service providers. Determining where a service takes place, particularly in multi-state client engagements, is inherently complex. For instance, a CPA providing tax or consulting services to a client operating across multiple states would face uncertainty in determining where the taxable value of their services lies.
3. Increase Costs for Consumers: Taxing services leads to pyramiding—where taxes are applied multiple times during the production and delivery of goods and services—ultimately driving up costs for end consumers.
4. Harm Maryland’s Competitiveness: States that have implemented sales taxes on services, such as Florida and Michigan, have faced economic backlash and repealed the laws. Maryland would face similar challenges, risking its appeal to businesses looking to relocate or expand.
5. Disproportionately Affect Lower-Income Residents: Sales taxes are inherently regressive, disproportionately impacting those with lower incomes, who would see a larger share of their disposable income consumed by these taxes.

Our Position
MSATP firmly believes that a sales tax on professional services would harm Maryland’s small businesses, inhibit economic growth, and place an undue burden on citizens. This proposal would create unnecessary complexity, increase costs for all parties involved, and stifle the entrepreneurial spirit vital to Maryland’s economy.

Guidance for Members
Tax professionals, CPAs, accountants, and bookkeepers can help by:

• Educating clients on the potential impacts of such legislation.
• Staying informed about legislative developments.
• Sharing your professional expertise with policymakers to advocate against the tax.

Call to Action
MSATP is actively working to defeat any proposed sales tax on services. We urge our members to join us in opposing this harmful legislation. Together, we can protect Maryland’s businesses and citizens from unnecessary taxation and complexity.

For additional updates and resources, visit the MSATP website or contact us directly.

As an MSATP member, you have the opportunity to actively participate in shaping Maryland’s tax and accounting legislation by joining the MSATP Advocacy Committee. This committee plays a crucial role in:

• Reviewing proposed bills
• Providing insights and recommendations
• Representing the interests of tax and accounting professionals and their clients

By joining the Advocacy Committee, you can contribute your expertise to help MSATP develop positions on key legislative issues, draft testimony, and engage with lawmakers and other stakeholders.