EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*hb0366*
HOUSE BILL 366
Q7 2lr0620
CF SB 477
By: Delegate Lierman
Introduced and read first time: January 19, 2022
Assigned to: Ways and Means
Committee Report: Favorable with amendments
House action: Adopted
Read second time: February 22, 2022
CHAPTER ______
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
2 HOUSE BILL 366
Article – Tax – General 1
2–102.1. 2
(A) THERE IS A LEGAL DIVISION IN THE OFFICE OF THE COMPTROLLER . 3
(B) (1) THE HEAD OF THE LEGAL DIVISION IS THE DIRECTOR. 4
(2) SUBJECT TO THE SUPERV ISION OF THE COMPTROLLER , THE 5
DIRECTOR HAS ADMINIST RATIVE CONTROL OF TH E LEGAL DIVISION. 6
(C) (1) THE DIRECTOR SHALL APPOIN T OTHER OFFICERS AND 7
EMPLOYEES OF THE LEGAL DIVISION IN ACCORDANC E WITH THE PROVISION S OF 8
THE STATE PERSONNEL AND PENSIONS ARTICLE, INCLUDING A MINIMUM OF SIX 9
ATTORNEYS. 10
(2) OFFICERS AND EMPLOYEE S OF THE LEGAL DIVISION ARE 11
ENTITLED TO A SALARY AS PROVIDED IN THE STATE BUDGET . 12
(D) THE LEGAL DIVISION SHALL: 13
(1) PROVIDE EXPANDED AND DETAILED TAX GUIDANC E TO 14
TAXPAYERS, INCLUDING PRIVATE LE TTER RULINGS; AND 15
(2) PERFORM OTHER RELATE D DUTIES AS ASSIGNED BY THE 16
COMPTROLLER I N ACCORDANCE WITH TITLE 13, SUBTITLE 1A OF THIS ARTICLE . 17
SUBTITLE 1A. PRIVATE LETTER RULINGS. 18
13–1A–01. 19
IN THIS SUBTITLE , “PRIVATE LETTER RULIN G” MEANS A WRITTEN 20
DETERMINATION ISSUED BY THE COMPTROLLER ON THE AP PLICATION OF TAX LAW S 21
AND REGULATIONS UND ER THIS ARTICLE TO A SPECIFIC SET OF FACT S THAT IS 22
INTENDED TO APPLY ON LY TO THAT SPECIFIC SET OF FACTS. 23
13–1A–02. 24
(A) (1) EXCEPT AS PROVIDED IN SUBSECTION (C) OF THIS SECTION, THE 25
COMPTROLLER SHALL ISS UE A PRIVATE LETTER RULING ON THE WRITTE N REQUEST 26
OF A PERSON AS SOON AS PRACTICABLE AFTER THE DATE ON WHICH TH E 27
COMPTROLLER RECEIVED THE WRITTEN REQUEST . 28
(2) (I) A PERSON REQUESTING A PRIVATE LETTER RULIN G SHALL 29
INCLUDE IN THE WRITT EN REQUEST A STATEME NT AS TO WHETHER THE PERSON IS 30 HOUSE BILL 366 3
THE SUBJECT OF AN O NGOING TAXATION MATT ER, INCLUDING AN AUDIT , A CLAIM 1
FOR REFUND , A TAX PROTEST , OR AN APPEAL TO THE TAX COURT OR ANY OTHER 2
COURT WITH JURISDICT ION OVER THE MATTER . 3
(II) IF THE PERSON IS THE SUBJECT OF AN ONGOIN G TAXATION 4
MATTER, THE STATEMENT REQUIR ED UNDER THIS PARAGRAPH SHALL INCLUDE ANY 5
RELEVANT CASE NUMBER S OR OTHER IDENTIFYI NG INFORMATION . 6
(B) (1) THE COMPTROLLER , AS APPROPRIATE , MAY REQUEST 7
ADDITIONAL INFORMATI ON FROM THE PERSON R EQUESTING THE PRIVAT E LETTER 8
RULING. 9
(2) THE PERSON SHALL SUBM IT THE INFORMATION T O THE 10
COMPTROLLER WITHIN 30 DAYS AFTER THE DATE ON WHICH THE PERSON RECEIVES 11
THE COMPTROLLER ’S REQUEST UNDER THIS SUBSECTION. 12
(C) (1) THE COMPTROLLER MAY DENY A REQUEST FOR A PRIV ATE 13
LETTER RULING FOR GO OD CAUSE, INCLUDING: 14
(I) THE ISSUE IS THE SUBJE CT OF EXISTING GUIDA NCE TO 15
TAXPAYERS PUBLISHED BY THE COMPTROLLER ; 16
(II) THE PERSON DID NOT T IMELY SUBMIT THE ADD ITIONAL 17
INFORMATION REQUESTE D BY THE COMPTROLLER IN ACCORD ANCE WITH 18
SUBSECTION (B) OF THIS SECTION; 19
(III) THE ISSUE IDENTIFIED IN THE RE QUEST: 20
1. IS UNDER EXTENSIVE S TUDY OR REVIEW ; OR 21
2. IS CURRENTLY BEING C ONSIDERED IN A RULEM AKING 22
PROCEDURE , CONTESTED CASE , OR ANY OTHER AGENCY OR JUDICIAL PROCEEDI NG 23
THAT MAY RESOLVE THE ISSUE; 24
(IV) THE REQUEST INVOLVES A HYPOTHETICAL SITUA TION OR 25
ALTERNATIVE PLANS ; 26
(V) THE TRANSACTION FOR WHICH THE PRIVATE LE TTER 27
RULING IS REQUESTED IS DESIGNED TO AVOID TAXATION; 28
(VI) THE FACTS OR ISSUES IDENTIFIED IN THE RE QUEST ARE 29
UNCLEAR, OVERBROAD , INSUFFICIENT, OR OTHERWISE INAPPRO PRIATE AS A BASIS 30
ON WHICH TO ISSUE A PRIVATE LETTER RULIN G; OR 31
4 HOUSE BILL 366
(VII) THE REQUEST IS TO DE TERMINE WHETHER A ST ATUTE IS 1
CONSTITUTIONAL UNDER THE MARYLAND CONSTITUTION OR THE UNITED STATES 2
CONSTITUTION; 3
(VIII) THE ISSUE IS CLEARLY AND ADEQUATELY ADDRE SSED BY 4
STATUTE, REGULATION , OR COURT DECISION ; OR 5
(IX) THE ISSUE INVOLVES T HE TAX CONSEQUENCE O F ANY 6
PROPOSED BUT NOT YET ENACTED FEDERAL , STATE, OR LOCAL LEGISLATION . 7
(2) IF THE COMPTROLLER DENIES A REQUEST FOR A PRIVAT E 8
LETTER RULING UNDER THIS SECTION, THE COMPTROLLER SHALL NOT IFY THE 9
PERSON IN WRITING : 10
(I) OF THE REASONS FOR T HE DENIAL AND WHY TH OSE 11
REASONS CONSTITUTE G OOD CAUSE; AND 12
(II) WITHIN 60 DAYS AFTER THE DATE ON WHICH THE REQUEST 13
WAS SUBMITTED TO THE COMPTROLLER . 14
(D) A PERSON MAY WITHDRAW , IN WRITING, THE REQUEST FOR A PR IVATE 15
LETTER RULING AT ANY TIME BEFORE THE ISSU ANCE OF THE PRIVATE LETTER 16
RULING UNDER THIS SE CTION. 17
13–1A–03. 18
(A) A PRIVATE LETTER RULIN G ISSUED UNDER THIS SUBTITLE MAY BE 19
RELIED ON SOLELY AND PROSPECTIVELY BY THE PERSON FOR WHOM THE PRIVATE 20
LETTER RULING IS REQ UESTED UNLESS THERE IS AN INTERVENING ST ATUTORY OR 21
REGULATORY CHANGE OR THE PRIVATE LETTER R ULING IS REVOKED BY THE 22
COMPTROLLER . 23
(B) A PRIVATE LETTER RULIN G IS BINDING ON THE COMPTROLLER FOR A 24
PERIOD OF 3 7 YEARS UNLESS : 25
(1) THERE HAS BEEN A MIS STATEMENT OR OMISSIO N OF MATERIAL 26
FACTS IN THE REQUEST ; 27
(2) THE ACTUAL FACTS ARE DETERMINED TO B E MATERIALLY 28
DIFFERENT FROM THE F ACTS ON WHICH THE PR IVATE LETTER RULING WAS BASED; 29
(3) THERE HAS BEEN A CHA NGE IN LAW OR A FINA L DECISION IN A 30
CONTESTED CASE THAT THE COMPTROLLER DETERMINE S AFFECTS THE VALIDI TY 31
OF THE PRIVATE LETTE R RULING; OR 32 HOUSE BILL 366 5
(4) THE COMPTROLLER HAS MODIF IED OR REVOKED THE P RIVATE 1
LETTER RULING . 2
(C) AN UNFAVORABLE PRIVAT E LETTER RULING DOES NOT BIND THE 3
PERSON FOR WHOM THE PRIVATE LETTER RULIN G WAS REQUESTED . 4
(D) THE MODIFICATION OR R EVOCATION OF A PRIVA TE LETTER RULING BY 5
THE COMPTROLLER MAY NOT B E APPLIED RETROACTIV ELY TO TAXABLE PERIO DS 6
OR TAXABLE YEARS BEF ORE THE EFFECTIVE DA TE OF THE MODIFICATI ON OR 7
REVOCATION . 8
13–1A–04. 9
(A) SUBJECT TO SUBSECTION (B) OF THIS SECTION , THE COMPTROLLER 10
SHALL PUBLISH PERIOD ICALLY ON THE COMPTROLLER ’S WEBSITE COPIES OF 11
PRIVATE LETTER RULIN GS THAT THE COMPTROLLER DETERMINE S TO BE OF 12
INTEREST TO THE GENE RAL PUBLIC. 13
(B) THE COMPTROLLER SHALL RED ACT PERSONALLY IDENTIFIA BLE 14
INFORMATION IN A PUB LISHED PRIVATE LETTE R RULING IN ORDER TO ENSURE THE 15
CONFIDENTIALITY OF A NY PERSON THAT IS TH E SUBJECT OF THE PRI VATE LETTER 16
RULING. 17
13–1A–05. 18
THE COMPTROLLER SHALL ADO PT REGULATIONS NECES SARY TO CARRY OUT 19
THE PROVISIONS OF THIS S UBTITLE, INCLUDING REGULATION S THAT ESTABLISH : 20
(1) THE PROCEDURE , FORM, AND TIME PERIODS FOR SUBMITTING A 21
REQUEST FOR A PRIVAT E LETTER RULING ; 22
(2) THE TERMS AND CONDIT IONS UNDER WHICH A P RIVATE LETTER 23
RULING MAY BE REVOKE D OR MODIFIED; 24
(3) THE LIMITATIONS ON T HE APPLICABILITY OF A PRIVATE LETTER 25
RULING TO SPECIFIC P ERSONS, TRANSACTIONS , FACTUAL CIRCUMSTANCE S, AND 26
TIME PERIODS; 27
(4) THE CIRCUMSTANCES UN DER WHICH A REQUEST FOR A PRIVATE 28
LETTER RULING MAY BE DENIED BY THE COMPTROLLER FOR GOOD CAUS E; AND 29
(5) GUIDELINES FOR THE P UBLICATION OF PRIVAT E LETTER 30
RULINGS. 31 6 HOUSE BILL 366
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 1
1, 2022. 2
Approved:
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Governor.
________________________________________________________________________________
Speaker of the House of Delegates.
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President of the Senate.