LAWRENCE J. HOGAN, JR., Governor Ch. 481
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Chapter 481
(Senate Bill 477)
AN ACT concerning
Office of the Comptroller – Legal Division and Private Letter Ruling Procedures
FOR the purpose of establishing a Legal Division in the Office of the Comptroller to provide
certain guidance to taxpayers and perform other duties relating to private letter
rulings as assigned by the Comptroller; requiring the Comptroller to issue certain
private letter rulings on the request of a person, except under certain circumstances;
authorizing the Comptroller to deny a private letter ruling request under certain
circumstances and establishing procedures for the denial; authorizing a person to
withdraw a private letter ruling request under certain circumstances; establishing,
subject to certain exceptions, the circumstances under which a private letter ruling
binds the Comptroller or may be relied on by a person; requiring the Comptroller to
publish certain private letter rulings on the Comptroller’s website in a certain
manner under certain circumstances; and generally relating to the Office of the
Comptroller and private letter rulings.
BY adding to
Article – Tax – General
Section 2–102.1; and 13–1A–01 through 13–1A–05 to be under the new subtitle
“Subtitle 1A. Private Letter Rulings”
Annotated Code of Maryland
(2016 Replacement Volume and 2021 Supplement)
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
That the Laws of Maryland read as follows:
Article – Tax – General
2–102.1.
(A) THERE IS A LEGAL DIVISION IN THE OFFICE OF THE COMPTROLLER .
(B) (1) THE HEAD OF THE LEGAL DIVISION IS THE DIRECTOR.
(2) SUBJECT TO THE SUPERV ISION OF THE COMPTROLLER , THE
DIRECTOR HAS ADMINIST RATIVE CONTROL OF TH E LEGAL DIVISION.
(C) (1) THE DIRECTOR SHALL APPOIN T OTHER OFFICERS AND
EMPLOYEES OF THE LEGAL DIVISION IN ACCORDANC E WITH THE PROVISION S OF
THE STATE PERSONNEL AND PENSIONS ARTICLE, INCLUDING A MINIMUM OF SIX
ATTORNEYS. Ch. 481 2022 LAWS OF MARYLAND
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(2) OFFICERS AND EMPLOYEE S OF THE LEGAL DIVISION ARE
ENTITLED TO A SALARY AS PROVIDED IN THE STATE BUDGET .
(D) THE LEGAL DIVISION SHALL:
(1) PROVIDE EXPANDED AND DETAILED TAX GUIDANC E TO
TAXPAYERS, INCLUDING PRIVATE LE TTER RULINGS; AND
(2) PERFORM OTHER RELATE D DUTIES AS ASSIGNED BY THE
COMPTROLLER IN ACCORDANCE WITH TITLE 13, SUBTITLE 1A OF THIS ARTICLE .
SUBTITLE 1A. PRIVATE LETTER RULINGS.
13–1A–01.
IN THIS SUBTITLE , “PRIVATE LETTER RULIN G” MEANS A WRITTEN
DETERMINATION ISSUED BY THE COMPTROLLER ON THE AP PLICATION OF TAX LAW S
AND REGULATIONS UN DER THIS ARTICLE TO A SPECIFIC SET OF FA CTS THAT IS
INTENDED TO APPLY ON LY TO THAT SPECIFIC SET OF FACTS.
13–1A–02.
(A) (1) EXCEPT AS PROVIDED IN SUBSECTION (C) OF THIS SECTION, THE
COMPTROLLER SHALL ISS UE A PRIVATE LETTER RULING ON THE WRITTE N REQUEST
OF A PERSON AS SOON AS PRACTICABLE AFTER THE DATE ON WHICH TH E
COMPTROLLER RECEIVED THE WRITTEN REQUEST .
(2) (I) A PERSON REQUESTING A PRIVATE LETTER RULIN G SHALL
INCLUDE IN THE WRITT EN REQUEST A STATEME NT AS TO WHETHER THE PERSON IS
THE SUBJECT OF AN O NGOING TAXATION MATT ER, INCLUDING AN AUDIT , A CLAIM
FOR REFUND , A TAX PROTEST , OR AN APPEAL TO THE TAX COURT OR ANY OTHER
COURT WITH JURISDICT ION OVER THE MATTER .
(II) IF THE PERSON IS THE SUBJECT OF AN ONGOIN G TAXATION
MATTER, THE STATEMENT REQUIR ED UNDER THIS PARAGRAPH SHALL INCLUDE ANY
RELEVANT CASE NUMBER S OR OTHER IDENTIFYI NG INFORMATION .
(B) (1) THE COMPTROLLER , AS APPROPRIATE , MAY REQUEST
ADDITIONAL INFORMATI ON FROM THE PERSON R EQUESTING THE PRIVAT E LETTER
RULING.
LAWRENCE J. HOGAN, JR., Governor Ch. 481
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(2) THE PERSON SHALL SUBMIT THE INFORMATI ON TO THE
COMPTROLLER WITHIN 30 DAYS AFTER THE DATE ON WHICH THE PERSON RECEIVES
THE COMPTROLLER ’S REQUEST UNDER THIS SUBSECTION.
(C) (1) THE COMPTROLLER MAY DENY A REQUEST FOR A PRIV ATE
LETTER RULING FOR GO OD CAUSE, INCLUDING:
(I) THE ISSUE IS THE SUB JECT OF EXISTING GUI DANCE TO
TAXPAYERS PUBLISHED BY THE COMPTROLLER ;
(II) THE PERSON DID NOT T IMELY SUBMIT THE ADD ITIONAL
INFORMATION REQUESTE D BY THE COMPTROLLER IN ACCORD ANCE WITH
SUBSECTION (B) OF THIS SECTION;
(III) THE ISSUE IDENTIFIED IN THE REQUEST :
1. IS UNDER EXTENSIVE S TUDY OR REVIEW ; OR
2. IS CURRENTLY BEING C ONSIDERED IN A RULEM AKING
PROCEDURE , CONTESTED CASE , OR ANY OTHER AGENCY OR JUDICIAL PROCEEDI NG
THAT MAY RESOLVE THE ISSUE;
(IV) THE REQUEST INV OLVES A HYPOTHETICAL SITUATION OR
ALTERNATIVE PLANS ;
(V) THE TRANSACTION FOR WHICH THE PRIVATE LE TTER
RULING IS REQUESTED IS DESIGNED TO AVOID TAXATION;
(VI) THE FACTS OR ISSUES IDENTIFIED IN THE RE QUEST ARE
UNCLEAR, OVERBROAD , INSUFFICIENT, OR OTHERWISE INAPPROPRIATE AS A BASIS
ON WHICH TO ISSUE A PRIVATE LETTER RULIN G; OR
(VII) THE REQUEST IS TO DE TERMINE WHETHER A ST ATUTE IS
CONSTITUTIONAL UNDER THE MARYLAND CONSTITUTION OR THE UNITED STATES
CONSTITUTION;
(VIII) THE ISSUE IS CLEARLY AND ADEQUATELY ADDRESSED BY
STATUTE, REGULATION, OR COURT DECISION ; OR
(IX) THE ISSUE INVOLVES T HE TAX CONSEQUENCE O F ANY
PROPOSED BUT NOT YET ENACTED FEDERAL , STATE, OR LOCAL LEGISLATION .
Ch. 481 2022 LAWS OF MARYLAND
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(2) IF THE COMPTROLLER DENIES A REQUEST FOR A PRIVAT E
LETTER RUL ING UNDER THIS SECTI ON, THE COMPTROLLER SHALL NOT IFY THE
PERSON IN WRITING :
(I) OF THE REASONS FOR T HE DENIAL AND WHY TH OSE
REASONS CONSTITUTE G OOD CAUSE; AND
(II) WITHIN 60 DAYS AFTER THE DATE ON WHICH THE REQUEST
WAS SUBMITTED TO THE COMPTROLLER .
(D) A PERSON MAY WITHDRAW , IN WRITING, THE REQUEST FOR A PR IVATE
LETTER RULING AT ANY TIME BEFORE THE ISSU ANCE OF THE PRIVATE LETTER
RULING UNDER THIS SE CTION.
13–1A–03.
(A) A PRIVATE LETTER RULIN G ISSUED UNDER THIS SUBTITLE MAY BE
RELIED ON SOLELY AND PROSPECTIVELY BY THE PERSON FOR WHOM THE PRIVATE
LETTER RULING IS REQ UESTED UNLESS THERE IS AN INTERVENING ST ATUTORY OR
REGULATORY CHANGE OR THE PRIVATE LETTER R ULING IS REVOKED BY THE
COMPTROLLER .
(B) A PRIVATE LETTER RULIN G IS BINDING ON THE COMPTROLLER FOR A
PERIOD OF 3 7 YEARS UNLESS :
(1) THERE HAS BEEN A MIS STATEMENT OR OMISSIO N OF MATERIAL
FACTS IN THE REQUEST ;
(2) THE ACTUAL FACTS ARE DETERMINED TO BE MAT ERIALLY
DIFFERENT FROM THE F ACTS ON WHICH THE PR IVATE LETTER RULING WAS BASED;
(3) THERE HAS BEEN A CHA NGE IN LAW OR A FINA L DECISION IN A
CONTESTED CASE THAT THE COMPTROLLER DETERMINE S AFFECTS THE VALIDI TY
OF THE PRIVATE LETTE R RULING; OR
(4) THE COMPTROLL ER HAS MODIFIED OR R EVOKED THE PRIVATE
LETTER RULING .
(C) AN UNFAVORABLE PRIVAT E LETTER RULING DOES NOT BIND THE
PERSON FOR WHOM THE PRIVATE LETTER RULIN G WAS REQUESTED .
(D) THE MODIFICATION OR R EVOCATION OF A PRIVA TE LETTER RULING BY
THE COMPTROLLER M AY NOT BE APPLIED RE TROACTIVELY TO TAXAB LE PERIODS LAWRENCE J. HOGAN, JR., Governor Ch. 481
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OR TAXABLE YEARS BEF ORE THE EFFECTIVE DA TE OF THE MODIFICATI ON OR
REVOCATION .
13–1A–04.
(A) SUBJECT TO SUBSECTION (B) OF THIS SECTION , THE COMPTROLLER
SHALL PUBLISH PERIOD ICALLY ON THE COMPTROLLER ’S WEBSITE COPIES OF
PRIVATE LETTER RULIN GS THAT THE COMPTROLLER DETERMINE S TO BE OF
INTEREST TO THE GENE RAL PUBLIC.
(B) THE COMPTROLLER SHALL RED ACT PERSONALLY IDENTIFIA BLE
INFORMATION IN A PUB LISHED PRIVATE LETTE R RULING IN ORDER TO ENSURE THE
CONFIDENTIALITY OF A NY PERSON THAT IS TH E SUBJECT OF THE PRI VATE LETTER
RULING.
13–1A–05.
THE COMPTROLLER SHALL ADO PT REGULATIONS NECES SARY TO CARRY OUT
THE PROVISIONS OF THIS S UBTITLE, INCLUDING REGULATION S THAT ESTABLISH :
(1) THE PROCEDURE , FORM, AND TIME PERIODS FOR SUBMITTING A
REQUEST FOR A PRIVAT E LETTER RULING ;
(2) THE TERMS AND CONDIT IONS UNDER WHICH A P RIVATE LETTER
RULING MAY BE REVOKE D OR MODIFIED;
(3) THE LIMITATIONS ON T HE APPLICABILITY OF A PRIVATE LETTER
RULING TO SPECIFIC P ERSONS, TRANSACTIONS , FACTUAL CIRCUMSTANCE S, AND
TIME PERIODS;
(4) THE CIRCUMSTANCES UN DER WHICH A REQUEST FOR A PRIVATE
LETTER RULING MAY BE DENIED BY THE COMPTROLLER FOR GOOD C AUSE; AND
(5) GUIDELINES FOR THE P UBLICATION OF PRIVAT E LETTER
RULINGS.
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July
1, 2022.
Approved by the Governor, May 16, 2022.