FROM THE DESK OF THE COMPTROLLER

2008

It is my honor to once again communicate with you and wish you all a happy and healthy 2008. Throughout my recently completed, and very active, first year in office, I have emphasized the importance of continuing the strong partnerships my Agency has made over the decades. It remains a high priority for me to work with professionals and organizations from across the state for the benefit of all Marylanders. With the new taxes and changes due to the recent Special Session, it is more important than ever for the residents of Maryland to be informed and engaged.

As I mentioned, this past year has been a very active and gratifying one for me. We have worked aggressively to reward those of you who faithfully pay your taxes by finding - and collecting - from those who do not. For example, last June, we launched a unique partnership with the U.S. Treasury Department that allows us to intercept federal vendor payments to satisfy state income tax liabilities...and vice-versa. This new "federal vendor offset" program - the very first of its kind in the nation - will bring in more than $20 million in the first year alone, and will ultimately allow us to recover millions in unpaid taxes owed to the State of Maryland, and level the playing field for those vendors who are currently playing by the rules.

Other highlights from the past year include:

• Led the successful effort to disallow the 'captive' Real Estate Investment Trusts (REITs) deduction while working aggressively to identify and eliminate other tax avoidance efforts.
• Fought to expand opportunity for minority and women owned businesses through the State of Maryland's Minority Business Enterprise (MBE) program.
• Partnered with the Maryland Department of Agriculture in a year-long study to verify that gas is being stored at proper temperatures, as required by law. These quality controls will ensure that consumers will get a true gallon of gasoline for the dollar.
• Worked vigorously to keep more than 50,000 packs of untaxed cigarettes and almost $175,000 worth of illegal beer, wine and distilled spirits off of our streets.
• Collected over $1.4 million in delinquent sales and use taxes.
• Streamlined the tax payment process through new online customer service innovations, such as Bill Pay.
• Established an Economic Advisory Panel, consisting of business leaders across the State, to advise the Board of Revenue Estimates on economic conditions that will affect revenue performance in the near-term future.
• Spearheaded successful effort to diversify the State Retirement Agency's investment portfolio in order to maximize investment returns and reduce risk exposure.

Looking forward to 2008 and beyond, I have asked Governor O'Malley and our legislative leaders to support one of the most comprehensive tax compliance initiatives of recent years. Through our 'Tax Fairness Initiative,' we will bring our current tax collection technology into the 21st century, and make it harder for tax evaders to undermine our State's financing system. We will place additional auditors in the field and will be able to attract and retain capable professionals by offering them a reasonable salary.

Over the next four years, the Tax Fairness Initiative will generate $200 million in revenue, and once fully in place it will generate as much as $100 million every year. This is revenue that is currently owed the State, but is being sheltered or otherwise not being paid, a situation which hurts every Marylander because of the fundamental lack of fairness and the stress it puts on our State's finances.

Finally, let me remind everyone that the tax filing season is upon us and I urge all Maryland residents to take advantage of all the services that my office provides, specifically online electronic filing. E-filing makes filing your taxes faster, safer, and more convenient; while also allowing you to receive your refund quicker. In addition, our all of our offices offer other services to make this season as stress-free as possible, including free tax preparation. Taxpayers can e-mail questions regarding their state taxes to taxhelp@comp.state.md.us or contact a representative at (410) 260-7980 or 1-800-MD-TAXES.

Let me again wish you all a happy 2008 and thank you for your help in making the Comptroller's Office as effective, efficient and responsive as possible.