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S.B. 38
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VETOES
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(b) The final decision shall identify any changes, modifications, or
amendments to the proposed decision and the reasons for the changes, modifications,
or amendments.
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall apply to
any proposed decision issued in a contested case under Title 10, Subtitle 2 of the State
Government Article after the effective date of this Act.
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect
October 1, 2002.
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May 15, 2002
The Honorable Thomas V. Mike Miller, Jr.
President of the Senate
State House
Annapolis MD 21401
Dear Mr. President:
In accordance with Article II, Section 17 of the Maryland Constitution, I have today
vetoed Senate Bill 38 - Income Tax - Claims for Refunds.
Senate Bill 38 allows a claim for refund or credit for overpayment of income tax
attributable to a right to a reduction in a person's Maryland income tax that is
established by a decision of an administrative board, or by an appeal of such a
decision. The claim must be filed within one year after the date of a final decision of
the administrative board or a final decision of the highest court to which an appeal of
a final decision of the administrative board is taken. The bill also makes this tax
change retroactive to cover the claim filed between January 1, 2000 and July 1, 2002,
provided the claim is filed within 18 months after the date of a final decision of the
administrative board or court. Following the 2001 Session of the General Assembly, I
vetoed identical legislation, Senate Bill 344. The reasons for my veto are restated
below.
According to the Office of the Comptroller, Senate Bill 38 is likely to impact one or two
taxpayers a year. While I understand that in these extremely rare cases, some
taxpayers may be justified in requesting a refund, I have two concerns with the
legislation which prevent me from signing it into law. The first concern relates to the
congruity of federal and State filing limitations and the second pertains to the
retroactive application of the Act.
Like so many aspects of the State's individual income tax system, Maryland's statute
of limitation for filing a claim for refund or credit for overpayment closely parallels
federal tax law. Under State law, a taxpayer may only file a claim for a refund within
three years from the date the tax was paid. Under federal IRS rules, a taxpayer may
file a claim for a credit or refund of a tax overpayment within the later of three years
from the date the return was filed or two years from the date the tax was paid. Given
that the State's existing filing limit impacts only a few cases a year, I do not believe
that justifies decoupling the State's three-year limit on claims for refunds with the
federal government's three-year rule.
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- 4398 -
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