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.
Italics indicate opposite chamber/conference committee amendments.
*sb0477*
SENATE BILL 477
Q7 (2lr0769)
ENROLLED BILL
— Budget and Taxation/Ways and Means —
Introduced by Senators Hester and Rosapepe
Read and Examined by Proofreaders:
_______________________________________________
Proofreader.
_______________________________________________
Proofreader.
Sealed with the Great Seal and presented to the Governor, for his approval this
_______ day of _______________ at _________________ _______ o’clock, ________M.
______________________________________________
President.
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
2 SENATE BILL 477
BY adding to 1
Article – Tax – General 2
Section 2–102.1; and 13–1A–01 through 13–1A–05 to be under the new subtitle 3
“Subtitle 1A. Private Letter Rulings” 4
Annotated Code of Maryland 5
(2016 Replacement Volume and 2021 Supplement) 6
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 7
That the Laws of Maryland read as follows: 8
Article – Tax – General 9
2–102.1. 10
(A) THERE IS A LEGAL DIVISION IN THE OFFICE OF THE COMPTROLLER . 11
(B) (1) THE HEAD OF THE LEGAL DIVISION IS THE DIRECTOR. 12
(2) SUBJECT TO THE SUPERV ISION OF THE COMPTROLLER , THE 13
DIRECTOR HAS ADMINISTRATIVE CONTR OL OF THE LEGAL DIVISION. 14
(C) (1) THE DIRECTOR SHALL APPOIN T OTHER OFFICERS AND 15
EMPLOYEES OF THE LEGAL DIVISION IN ACCORDANC E WITH THE PROVISION S OF 16
THE STATE PERSONNEL AND PENSIONS ARTICLE, INCLUDING A MINIMUM OF SIX 17
ATTORNEYS. 18
(2) OFFICERS AND EMPLOYEE S OF THE LEGAL DIVISION ARE 19
ENTITLED TO A SALARY AS PROVIDED IN THE STATE BUDGET . 20
(D) THE LEGAL DIVISION SHALL: 21
(1) PROVIDE EXPANDED AND DETAILED TAX GUIDANC E TO 22
TAXPAYERS, INCLUDING PRIVATE LE TTER RULINGS; AND 23
(2) PERFORM O THER RELATED DUTIES AS ASSIGNED BY THE 24
COMPTROLLER IN ACCORD ANCE WITH TITLE 13, SUBTITLE 1A OF THIS ARTICLE . 25
SUBTITLE 1A. PRIVATE LETTER RULINGS. 26
13–1A–01. 27
IN THIS SUBTITLE , “PRIVATE LETTER RULIN G” MEANS A WRITTEN 28
DETERMINATION ISSUED BY THE COMPTROLLER ON THE AP PLICATION OF TAX LAW S 29
AND REGULATIONS UNDE R THIS ARTICLE TO A SPECIFIC SET OF FACT S THAT IS 30
INTENDED TO APPLY ON LY TO THAT SPECIFIC SET OF FACTS. 31 SENATE BILL 477 3
13–1A–02. 1
(A) (1) EXCEPT AS PROVIDED IN SUBSECTION (C) OF THIS SECTION, THE 2
COMPTROLLE R SHALL ISSUE A PRIV ATE LETTER RULING ON THE WRITTEN REQUEST 3
OF A PERSON AS SOON AS PRACTICABLE AFTER THE DATE ON WHICH TH E 4
COMPTROLLER RECEIVED THE WRITTEN REQUEST . 5
(2) (I) A PERSON REQUESTING A PRIVATE LETTER RULIN G SHALL 6
INCLUDE IN THE WRITT EN REQUEST A STATEME NT AS TO WHETHER THE PERSON IS 7
THE SUBJECT OF AN ON GOING TAXATION MATTE R, INCLUDING AN AUDIT , A CLAIM 8
FOR REFUND , A TAX PROTEST , OR AN APPEAL TO THE TAX COURT OR ANY OTHER 9
COURT WITH JURISDICT ION OVER THE MATTER . 10
(II) IF THE PERSON IS THE SUBJECT OF AN ONGOIN G TAXATION 11
MATTER, THE STATEMENT REQUIR ED UNDER THIS PARAGR APH SHALL INCLUDE AN Y 12
RELEVANT CASE NUMBER S OR OTHER IDENTIFYI NG INFORMATION . 13
(B) (1) THE COMPTROLLER , AS APPROPRIATE , MAY REQUEST 14
ADDITIONAL INFORMATI ON FROM THE PERSON R EQUESTING THE PRIVAT E LETTER 15
RULING. 16
(2) THE PERSON SHALL SUBM IT THE INFORMATION T O THE 17
COMPTROLLER WITHIN 30 DAYS AFTER THE DATE ON WHICH THE PERSON RECEIVES 18
THE COMPTROLL ER’S REQUEST UNDER THIS SUBSECTION. 19
(C) (1) THE COMPTROLLER MAY DENY A REQUEST FOR A PRIV ATE 20
LETTER RULING FOR GO OD CAUSE, INCLUDING: 21
(I) THE ISSUE IS THE SUB JECT OF EXISTING GUI DANCE TO 22
TAXPAYERS PUBLISHED BY THE COMPTROLLER ; 23
(II) THE PERSON DID NOT TIMELY SUBMIT TH E ADDITIONAL 24
INFORMATION REQUESTE D BY THE COMPTROLLER IN ACCORD ANCE WITH 25
SUBSECTION (B) OF THIS SECTION; 26
(III) THE ISSUE IDENTIFIED IN THE REQUEST : 27
1. IS UNDER EXTENSIVE S TUDY OR REVIEW ; OR 28
2. IS CURRENTLY BEING C ONSIDERED IN A RULEMAKING 29
PROCEDURE , CONTESTED CASE , OR ANY OTHER AGENCY OR JUDICIAL PROCEEDI NG 30
THAT MAY RESOLVE THE ISSUE; 31
4 SENATE BILL 477
(IV) THE REQUEST INVOLVES A HYPOTHETICAL SITUA TION OR 1
ALTERNATIVE PLANS ; 2
(V) THE TRANSACTION FOR WHICH THE PRIVATE LE TTER 3
RULING IS REQUESTED IS DESIGNE D TO AVOID TAXATION ; 4
(VI) THE FACTS OR ISSUES IDENTIFIED IN THE RE QUEST ARE 5
UNCLEAR, OVERBROAD , INSUFFICIENT, OR OTHERWISE INAPPRO PRIATE AS A BASIS 6
ON WHICH TO ISSUE A PRIVATE LETTER RULIN G; OR 7
(VII) THE REQUEST IS TO DE TERMINE WHETHER A STATUTE IS 8
CONSTITUTIONAL UNDER THE MARYLAND CONSTITUTION OR THE UNITED STATES 9
CONSTITUTION; 10
(VIII) THE ISSUE IS CLEARLY AND ADEQUATELY ADDRE SSED BY 11
STATUTE, REGULATION, OR COURT DECISION ; OR 12
(IX) THE ISSUE INVOLVES T HE TAX CONSEQUENCE O F ANY 13
PROPOSED BUT NOT YET ENACTED FEDERAL , STATE, OR LOCAL LEGISLATION . 14
(2) IF THE COMPTROLLER DENIES A REQUEST FOR A PRIVAT E 15
LETTER RULING UNDER THIS SECTION, THE COMPTROLLER SHALL NOT IFY THE 16
PERSON IN WRITING : 17
(I) OF THE REASONS FOR T HE DENIAL AND WHY THOSE 18
REASONS CONSTITUTE G OOD CAUSE; AND 19
(II) WITHIN 60 DAYS AFTER THE DATE ON WHICH THE REQUEST 20
WAS SUBMITTED TO THE COMPTROLLER . 21
(D) A PERSON MAY WITHDRAW , IN WRITING, THE REQUEST FOR A PR IVATE 22
LETTER RULING AT ANY TIME BEFORE THE ISSU ANCE OF THE PRIVATE LETTER 23
RULING UNDER THIS SE CTION. 24
13–1A–03. 25
(A) A PRIVATE LETTER RULIN G ISSUED UNDER THIS SUBTITLE MAY BE 26
RELIED ON SOLELY AND PROSPECTIVELY BY THE PERSON FOR WHOM THE PRIVATE 27
LETTER RULING IS REQ UESTED UNLESS THERE IS AN INTERVENING ST ATUTORY OR 28
REGULATORY CHANGE OR THE PRIVATE LETTER R ULING IS REVOKED BY THE 29
COMPTROLLER . 30
(B) A PRIVATE LETTER RULIN G IS BINDING ON THE COMPTROLLER FOR A 31
PERIOD OF 3 7 YEARS UNLESS : 32 SENATE BILL 477 5
(1) THERE HAS BEEN A MIS STATEMENT OR OMISSIO N OF MATERIAL 1
FACTS IN THE REQ UEST; 2
(2) THE ACTUAL FACTS ARE DETERMINED TO BE MAT ERIALLY 3
DIFFERENT FROM THE F ACTS ON WHICH THE PR IVATE LETTER RULING WAS BASED; 4
(3) THERE HAS BEEN A CHA NGE IN LAW OR A FINA L DECISION IN A 5
CONTESTED CASE THAT THE COMPTROLLER DETERMINE S AFFECTS THE VALIDITY 6
OF THE PRIVATE LETTE R RULING; OR 7
(4) THE COMPTROLLER HAS MODIF IED OR REVOKED THE P RIVATE 8
LETTER RULING . 9
(C) AN UNFAVORABLE PRIVAT E LETTER RULING DOES NOT BIND THE 10
PERSON FOR WHOM THE PRIVATE LETTER RULIN G WAS REQUESTED . 11
(D) THE MODIFICATION OR R EVOCATION OF A PRIVA TE LETTER RULING BY 12
THE COMPTROLLER MAY NOT B E APPLIED RETROACTIV ELY TO TAXABLE PERIO DS 13
OR TAXABLE YEARS BEF ORE THE EFFECTIVE DA TE OF THE MODIFICATI ON OR 14
REVOCATION . 15
13–1A–04. 16
(A) SUBJECT TO SUBSECTION (B) OF THIS SECTION, THE COMPTROLLER 17
SHALL PUBLISH PERIOD ICALLY ON THE COMPTROLLER ’S WEBSITE COPIES OF 18
PRIVATE LETTER RULIN GS THAT THE COMPTROLLER DETERMINE S TO BE OF 19
INTEREST TO THE GENE RAL PUBLIC. 20
(B) THE COMPTROLLER SHALL RED ACT PERSONALLY IDENT IFIABLE 21
INFORMATION IN A PUBLISHED PRIVATE LETTER RULIN G IN ORDER TO ENSURE THE 22
CONFIDENTIALITY OF A NY PERSON THAT IS TH E SUBJECT OF THE PRI VATE LETTER 23
RULING. 24
13–1A–05. 25
THE COMPTROLLER SHALL ADO PT REGULATIONS NECES SARY TO CARRY OUT 26
THE PROVISIONS OF TH IS SUBTITLE, INCLUDING REGULATIONS THAT ESTABLISH : 27
(1) THE PROCEDURE , FORM, AND TIME PERIODS FOR SUBMITTING A 28
REQUEST FOR A PRIVAT E LETTER RULING ; 29
(2) THE TERMS AND CONDIT IONS UNDER WHICH A P RIVATE LETTER 30
RULING MAY BE REVOKE D OR MODIFIED; 31 6 SENATE BILL 477
(3) THE LIMITATIONS O N THE APPLICABILITY OF A PRIVATE LETTER 1
RULING TO SPECIFIC P ERSONS, TRANSACTIONS , FACTUAL CIRCUMSTANCE S, AND 2
TIME PERIODS; 3
(4) THE CIRCUMSTANCES UN DER WHICH A REQUEST FOR A PRIVATE 4
LETTER RULING MAY BE DENIED BY THE COMPTROLLER FOR GOOD CAUSE; AND 5
(5) GUIDELINES FOR THE P UBLICATION OF PRIVAT E LETTER 6
RULINGS. 7
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 8
1, 2022. 9
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
President of the Senate.
________________________________________________________________________________
Speaker of the House of Delegates.