On April 24, 2018, Governor Larry Hogan signed legislation that phases in single sales factor apportionment over a five year period. The law may raise potential constitutional issues, as, after the legislation is fully effective, some Maryland taxpayers will be required to use single sales factor and some will not.
Single sales factor apportionment
In March, we reported that Maryland’s General Assembly was considering two bills that would adopt single sales factor apportionment in Maryland. (See our earlier Client Alert on the proposed legislation.) On April 24, 2018, Maryland’s governor signed two identical bills (S.B. 1090 and H.B. 1794) into law (Chapters 341 and 342 of the Acts of 2018) that will gradually phase in a single sales factor apportionment formula for corporate income tax purposes according to the following schedule: