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.
*sb0477*
SENATE BILL 477
Q7 2lr0769
CF HB 366
By: Senators Hester and Rosapepe
Introduced and read first time: January 27, 2022
Assigned to: Budget and Taxation
Committee Report: Favorable with amendments
Senate action: Adopted
Read second time: February 17, 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 SENATE BILL 477
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 THE 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 AS SIGNED BY THE 16
COMPTROLLER IN ACCORD ANCE 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 LAWS 21
AND REGULATIONS UNDE R 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) 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
SENATE BILL 477 3
(B) (1) THE COMPTROL LER, AS APPROPRIATE , MAY REQUEST 1
ADDITIONAL INFORMATI ON FROM THE PERSON R EQUESTING THE PRIVAT E LETTER 2
RULING. 3
(2) THE PERSON SHALL SUBM IT THE INFORMATION T O THE 4
COMPTROLLER WITHIN 30 DAYS AFTER THE DATE ON WHICH THE PERSON RECEIVES 5
THE COMPTROLLER ’S REQUEST UNDER THIS SUBS ECTION. 6
(C) (1) THE COMPTROLLER MAY DENY A REQUEST FOR A PRIV ATE 7
LETTER RULING FOR GO OD CAUSE, INCLUDING: 8
(I) THE ISSUE IS THE SUB JECT OF EXISTING GUI DANCE TO 9
TAXPAYERS PUBLISHED BY THE COMPTROLLER ; 10
(II) THE PERSON DID NOT TIMELY SUBMIT THE AD DITIONAL 11
INFORMATION REQUESTE D BY THE COMPTROLLER IN ACCORD ANCE WITH 12
SUBSECTION (B) OF THIS SECTION; 13
(III) THE ISSUE IDENTIFIED IN THE REQUEST : 14
1. IS UNDER EXTENSIVE S TUDY OR REVIEW ; OR 15
2. IS CURRENTLY BEING C ONSIDERED IN A RULEMAKING 16
PROCEDURE , CONTESTED CASE , OR ANY OTHER AGENCY OR JUDICIAL PROCEEDI NG 17
THAT MAY RESOLVE THE ISSUE; 18
(IV) THE REQUEST INVOLVES A HYPOTHETICAL SITUA TION OR 19
ALTERNATIVE PLANS ; 20
(V) THE TRANSACTION FOR WHICH THE PRIVATE LE TTER 21
RULING IS REQUE STED IS DESIGNED TO AVOID TAXATION ; 22
(VI) THE FACTS OR ISSUES IDENTIFIED IN THE RE QUEST ARE 23
UNCLEAR, OVERBROAD , INSUFFICIENT, OR OTHERWISE INAPPRO PRIATE AS A BASIS 24
ON WHICH TO ISSUE A PRIVATE LETTER RULIN G; OR 25
(VII) THE REQUEST IS TO DE TERMINE WHETH ER A STATUTE IS 26
CONSTITUTIONAL UNDER THE MARYLAND CONSTITUTION OR THE UNITED STATES 27
CONSTITUTION. 28
(2) IF THE COMPTROLLER DENIES A REQUEST FOR A PRIVAT E 29
LETTER RULING UNDER THIS SECTION, THE COMPTROLLER SHALL NOT IFY THE 30
PERSON IN WRITING : 31
4 SENATE BILL 477
(I) OF THE REASONS FOR THE DENI AL AND WHY THOSE 1
REASONS CONSTITUTE G OOD CAUSE; AND 2
(II) WITHIN 60 DAYS AFTER THE DATE ON WHICH THE REQUEST 3
WAS SUBMITTED TO THE COMPTROLLER . 4
(D) A PERSON MAY WITHDRAW , IN WRITING, THE REQUEST FOR A PR IVATE 5
LETTER RULING AT ANY TIME BEFORE THE ISSUAN CE OF THE PRIVATE LE TTER 6
RULING UNDER THIS SE CTION. 7
13–1A–03. 8
(A) A PRIVATE LETTER RULIN G ISSUED UNDER THIS SUBTITLE MAY BE 9
RELIED ON SOLELY AND PROSPECTIVELY BY THE PERSON FOR WHOM THE PRIVATE 10
LETTER RULING IS REQ UESTED UNLESS THERE IS AN INTERVENING ST ATUTORY OR 11
REGULATORY CHANGE OR THE PRIVATE LETTER R ULING IS REVOKED BY THE 12
COMPTROLLER . 13
(B) A PRIVATE LETTER RULIN G IS BINDING ON THE COMPTROLLER FOR A 14
PERIOD OF 3 7 YEARS UNLESS : 15
(1) THERE HAS BEEN A MIS STATEMENT OR OMISSIO N OF MATERIAL 16
FACTS IN THE REQUEST ; 17
(2) THE ACTUAL FACTS ARE DETERMINED TO BE MAT ERIALLY 18
DIFFERENT FROM THE F ACTS ON WHICH THE PR IVATE LETTER RULING WAS BASED; 19
(3) THERE HAS BEEN A CHA NGE IN LAW OR A FINA L DECISION IN A 20
CONTESTED CASE THAT THE COMPTROLLER DETERMINE S AFFECTS THE VALIDI TY 21
OF THE PRIVATE LETTE R RULING; OR 22
(4) THE COMPTROLLER HAS MODIF IED OR REVOKED THE P RIVATE 23
LETTER RULING . 24
(C) AN UNFAVORABLE PRIVAT E LETTER RULING DOES NOT BIND THE 25
PERSON FOR WHOM THE PRIVATE LETTER RULING WAS RE QUESTED. 26
(D) THE MODIFICATION OR R EVOCATION OF A PRIVA TE LETTER RULING BY 27
THE COMPTROLLER MAY NOT B E APPLIED RETROACTIV ELY TO TAXABLE PERIO DS 28
OR TAXABLE YEARS BEF ORE THE EFFECTIVE DA TE OF THE MODIFICATI ON OR 29
REVOCATION. 30
13–1A–04. 31
SENATE BILL 477 5
(A) SUBJECT TO SUBSECTION (B) OF THIS SECTION , THE COMPTROLLER 1
SHALL PUBLISH PERIOD ICALLY ON THE COMPTROLLER ’S WEBSITE COPIES OF 2
PRIVATE LETTER RULIN GS THAT THE COMPTROLLER DETERMINE S TO BE OF 3
INTEREST TO THE GENE RAL PUBLIC. 4
(B) THE COMPTROLLER SHALL RED ACT PERSONALLY IDENT IFIABLE 5
INFORMATION IN A PUB LISHED PRIVATE LETTE R RULING IN ORDER TO ENSURE THE 6
CONFIDENTIALITY OF A NY PERSON THAT IS TH E SUBJECT OF THE PRI VATE LETTER 7
RULING. 8
13–1A–05. 9
THE COMPTROLLER SHALL ADO PT REGULATIONS NE CESSARY TO CARRY OUT 10
THE PROVISIONS OF TH IS SUBTITLE, INCLUDING REGULATION S THAT ESTABLISH : 11
(1) THE PROCEDURE , FORM, AND TIME PERIODS FOR SUBMITTING A 12
REQUEST FOR A PRIVAT E LETTER RULING ; 13
(2) THE TERMS AND CONDIT IONS UNDER WHICH A P RIVATE LETTER 14
RULING MAY BE REVOKED OR MODIFIED; 15
(3) THE LIMITATIONS ON T HE APPLICABILITY OF A PRIVATE LETTER 16
RULING TO SPECIFIC P ERSONS, TRANSACTIONS , FACTUAL CIRCUMSTANCE S, AND 17
TIME PERIODS; 18
(4) THE CIRCUMSTANCES UN DER WHICH A REQUEST FOR A PRIVATE 19
LETTER RULING MAY BE DENIED BY THE COMPTROLLER FOR GOOD CAUSE; AND 20
(5) GUIDELINES FOR THE P UBLICATION OF PRIVAT E LETTER 21
RULINGS. 22
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 23
1, 2022. 24