EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb0366*
HOUSE BILL 366
Q7 2lr0620
CF 2lr0769
By: Delegate Lierman
Introduced and read first time: January 19, 2022
Assigned to: Ways and Means
A BILL ENTITLED
AN ACT concerning 1
Office of the Comptroller – Legal Division and Private Letter Ruling Procedures 2
FOR the purpose of establishing a Legal Division in the Office of the Comptroller to provide 3
certain guidance to taxpayers and perform other duties relating to private letter 4
rulings as assigned by the Comptroller; requiring the Comptroller to issue certain 5
private letter rulings on the request of a person, except under certain circumstances; 6
authorizing the Comptroller to deny a private letter ruling request under certain 7
circumstances and establishing procedures for the denial; authorizing a person to 8
withdraw a private letter ruling request under certain circumstances; establishing, 9
subject to certain exceptions, the circumstances under which a private letter ruling 10
binds the Comptroller or may be relied on by a person; requiring the Comptroller to 11
publish certain private letter rulings on the Comptroller’s website in a certain 12
manner under certain circumstances; and generally relating to the Office of the 13
Comptroller and private letter rulings. 14
BY adding to 15
Article – Tax – General 16
Section 2–102.1; and 13–1A–01 through 13–1A–05 to be under the new subtitle 17
“Subtitle 1A. Private Letter Rulings” 18
Annotated Code of Maryland 19
(2016 Replacement Volume and 2021 Supplement) 20
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 21
That the Laws of Maryland read as follows: 22
Article – Tax – General 23
2–102.1. 24
(A) THERE IS A LEGAL DIVISION IN THE OFFICE OF THE COMPTROLLER . 25 2 HOUSE BILL 366
(B) (1) THE HEAD OF THE LEGAL DIVISION IS THE DIRECTOR. 1
(2) SUBJECT TO THE SUPERV ISION OF THE COMPTROLLER , THE 2
DIRECTOR HAS ADMINIST RATIVE CONTROL OF TH E LEGAL DIVISION. 3
(C) (1) THE DIRECTOR SHALL APPOIN T OTHER OFFICERS AND 4
EMPLOYEES OF THE LEGAL DIVISION IN ACCORDANC E WITH THE PROVISIONS OF 5
THE STATE PERSONNEL AND PENSIONS ARTICLE, INCLUDING A MINIMUM OF SI X 6
ATTORNEYS. 7
(2) OFFICERS AND EMPLOYEES OF THE LEGAL DIVISION ARE 8
ENTITLED TO A SALARY AS PROVIDED IN THE STATE BUDGET . 9
(D) THE LEGAL DIVISION SHALL: 10
(1) PROVIDE EXPANDED AND DETAILED TAX GUIDANCE TO 11
TAXPAYERS, INCLUDING PRIVATE LE TTER RULINGS; AND 12
(2) PERFORM OTHER RELATED DUTIES AS ASSIGNED B Y THE 13
COMPTROLLER IN ACCORDANCE WITH TITLE 13, SUBTITLE 1A OF THIS ARTICLE. 14
SUBTITLE 1A. PRIVATE LETTER RULINGS. 15
13–1A–01. 16
IN THIS SUBTITLE , “PRIVATE LETTER RULIN G” MEANS A WRITTEN 17
DETERMINATION ISSUED BY THE COMPTROLLER ON THE AP PLICATION OF TAX LAW S 18
AND REGULATIONS UNDE R THIS ARTICLE TO A SPECIFIC SET OF FACT S THAT IS 19
INTENDED TO APPLY ON LY TO THAT SPEC IFIC SET OF FACTS. 20
13–1A–02. 21
(A) EXCEPT AS PROVIDED IN SUBSECTION (C) OF THIS SECTION , THE 22
COMPTROLLER SHALL ISS UE A PRIVATE LETTER RULING ON THE WRITTE N REQUEST 23
OF A PERSON AS SOON AS PRACTICAB LE AFTER THE DATE ON WH ICH THE 24
COMPTROLLER RECEIVED THE WRITTEN REQUEST . 25
(B) (1) THE COMPTROLLER , AS APPROPRIATE , MAY REQUEST 26
ADDITIONAL INFORMATI ON FROM THE PERSON R EQUESTING THE PRIVAT E LETTER 27
RULING. 28
(2) THE PERSON SHALL SUBM IT THE INFORMATION T O THE 29 HOUSE BILL 366 3
COMPTROLLER WITHIN 30 DAYS AFTER THE DATE ON WHICH THE P ERSON RECEIVES 1
THE COMPTROLLER ’S REQUEST UNDER THIS SUBSECTION. 2
(C) (1) THE COMPTROLLER MAY DENY A REQUEST FOR A PRIV ATE 3
LETTER RULING FOR GO OD CAUSE, INCLUDING: 4
(I) THE ISSUE IS THE SUB JECT OF EXISTING GUIDANCE TO 5
TAXPAYERS PUBLISHED BY THE COMPTROL LER; 6
(II) THE PERSON DID NOT TIMEL Y SUBMIT THE ADDITIO NAL 7
INFORMATION REQUESTE D BY THE COMPTROLLER IN ACCORD ANCE WITH 8
SUBSECTION (B) OF THIS SECTION; 9
(III) THE ISSUE IDENTIFIED IN THE REQUEST : 10
1. IS UNDER EXTENSIVE S TUDY OR REVIEW ; OR 11
2. IS CURRENTLY BEING C ONSIDERED IN A RULEM AKING 12
PROCEDURE , CONTESTED CASE , OR ANY OTHER AGENCY OR JUDICIAL PROCEEDI NG 13
THAT MAY RESOLVE THE ISSUE; 14
(IV) THE REQUEST INVOLVES A HYPOTHETICAL SITUA TION OR 15
ALTERNATIVE PLANS ; 16
(V) THE TRANSACTION FOR WHICH T HE PRIVATE LETTER 17
RULING IS REQUESTED IS DESIGNED TO AVOID TAXATION; 18
(VI) THE FACTS OR ISSUES IDENTIFIED IN THE RE QUEST ARE 19
UNCLEAR, OVERBROAD , INSUFFICIENT, OR OTHERWISE INAPPRO PRIATE AS A BASIS 20
ON WHICH TO ISSUE A PRIVATE LETTER RULING ; OR 21
(VII) THE REQUEST IS TO DE TERMINE WHETHER A ST ATUTE IS 22
CONSTITUTIONAL UNDER THE MARYLAND CONSTITUTION OR THE UNITED STATES 23
CONSTITUTION. 24
(2) IF THE COMPTROLLER DENIES A REQUEST FOR A PRIVAT E 25
LETTER RULING UNDER THIS SECTION, THE COMPTROLLER SHALL NOT IFY THE 26
PERSON IN WRITING : 27
(I) OF THE REASONS FOR T HE DENIAL AND WHY TH OSE 28
REASONS CONSTITUTE G OOD CAUSE; AND 29
(II) WITHIN 60 DAYS AFTER THE DATE ON WHICH THE REQUEST 30 4 HOUSE BILL 366
WAS SUBMITTED TO THE COMPTROLLER . 1
(D) A PERSON MAY WITHDRAW , IN WRITING, THE REQUEST FOR A PRIVATE 2
LETTER RULING AT ANY TIME BEFORE THE ISSU ANCE OF THE PRIVATE LETTER 3
RULING UNDER THIS SE CTION. 4
13–1A–03. 5
(A) A PRIVATE LETTER RULIN G ISSUED UNDER THIS SUBTITLE MAY BE 6
RELIED ON SOLELY AND PROSPECTIVELY BY THE PERSON FOR WHOM THE PRIVATE 7
LETTER RULING IS REQUESTED UNLESS THERE IS AN I NTERVENING STATUTORY OR 8
REGULATORY CHANGE OR THE PRIVATE LETTER R ULING IS REVOKED BY THE 9
COMPTROLLER . 10
(B) A PRIVATE LETTER RULIN G IS BINDING ON THE COMPTROLLER FOR A 11
PERIOD OF 3 YEARS UNLESS: 12
(1) THERE HAS BEEN A MIS STATEMENT OR OMISSIO N OF MATERIAL 13
FACTS IN THE REQUEST ; 14
(2) THE ACTUAL FACTS ARE DETERMINED TO BE MAT ERIALLY 15
DIFFERENT FROM THE F ACTS ON WHICH THE PR IVATE LETTER RULING WAS BASED; 16
(3) THERE HAS BEEN A CHA NGE IN LAW OR A FINA L DECISION IN A 17
CONTESTED CASE THAT THE COMPTROLLER DETERMINE S AFFECTS THE VALIDI TY 18
OF THE PRIVATE LETTE R RULING; OR 19
(4) THE COMPTROLLER HAS MODIF IED OR REVOKED THE P RIVATE 20
LETTER RULING . 21
(C) AN UNFAVORABLE PRIVAT E LETTER RULING DOES NOT BIND THE 22
PERSON FOR WHOM THE PRIVATE LETTER RULING WAS RE QUESTED. 23
(D) THE MODIFICATION OR R EVOCATION OF A PRIVA TE LETTER RULING BY 24
THE COMPTROLLER MAY NOT B E APPLIED RETROACTIV ELY TO TAXABLE PERIO DS 25
OR TAXABLE YEARS BEF ORE THE EFFECTIVE DA TE OF THE MODIFICATI ON OR 26
REVOCATION. 27
13–1A–04. 28
(A) SUBJECT TO SUBSECTION (B) OF THIS SECTION , THE COMPTROLLER 29
SHALL PUBLISH PERIOD ICALLY ON THE COMPTROLLER ’S WEBSITE COPIES OF 30
PRIVATE LETTER RULIN GS THAT THE COMPTROLLER DETERMINE S TO BE OF 31
INTEREST TO THE GENE RAL PUBLIC. 32 HOUSE BILL 366 5
(B) THE COMPTROLLER SHALL RED ACT PERSONALLY IDENT IFIABLE 1
INFORMATION IN A PUB LISHED PRIVATE LETTE R RULING IN ORDER TO ENSURE THE 2
CONFIDENTIALITY OF A NY PERSON THAT IS TH E SUBJECT OF THE PRI VATE LETTER 3
RULING. 4
13–1A–05. 5
THE COMPTROLLER SHALL ADO PT REGULATIONS N ECESSARY TO CARRY OU T 6
THE PROVISIONS OF TH IS SUBTITLE, INCLUDING REGULATION S THAT ESTABLISH : 7
(1) THE PROCEDURE , FORM, AND TIME PERIODS FOR SUBMITTING A 8
REQUEST FOR A PRIVAT E LETTER RULING ; 9
(2) THE TERMS AND CONDIT IONS UNDER WHICH A P RIVATE LETTER 10
RULING MAY BE REVOKED O R MODIFIED; 11
(3) THE LIMITATIONS ON T HE APPLICABILITY OF A PRIVATE LETTER 12
RULING TO SPECIFIC P ERSONS, TRANSACTIONS , FACTUAL CIRCUMSTANCE S, AND 13
TIME PERIODS; 14
(4) THE CIRCUMSTANCES UN DER WHICH A REQUEST FOR A PRIVATE 15
LETTER RULING MAY BE DENIED BY THE COMPTROLLER FOR GOOD CAUSE; AND 16
(5) GUIDELINES FOR THE PUBLICATION OF PRIVA TE LETTER 17
RULINGS. 18
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 19
1, 2022. 20