This isn’t exactly mortgage-related, but it’s in the ballpark, so I didn’t want to miss an opportunity to lambast “Premiere” Martin O’Malley for what amounts to yet another attack on Maryland business. Again I ask, how business “unfriendly” must The People’s Republic of Maryland become before all the businesses simply pick up and leave?

In his latest tax and spend move, O’Malley actually wants to close a loophole that allows LLCs to sell properties without paying the state transfer tax. Nevermind that you won’t get anything in return for those “transfer” (read: standard additional overcharge) tax dollars. What Marty may not realize is that many property owners will hold real estate in LLCs for no other reason than to avoid transfer taxes when they sell (and for liability limitation). OK, so far it sounds like O’Malley might be on to something.

However, the state of Maryland also charges $300 per annum for the luxury of filing a tax return for all Maryland corporations, LLPs and LLCs. So if folks stop buying their real estate in LLCs because one of the primary benefits has been removed, how much revenue with the state lose? Well, at least $300 per year, per aborted LLC, plus the cost of registering the LLC in the first place. Side story, and this is no joke - Maryland charges you to change the address of your company - if you don’t, they’ll send all your important tax bills to the wrong address, no matter how nicely you ask them not to.

Moral to the story? If you’re thinking about doing business in Maryland, and you have a choice to operate elsewhere…choose “elsewhere.” If you’re thinking of moving to Maryland and will start a business, consider someplace else, cause Marty’s on the warpath and no business is safe while this know-nothing lifetime politician tries to butt in where he is least qualified, i.e. - in the world of business.

Tags: llc, Martin OMalley, maryland taxes, peoples republic of maryland, real estate taxes

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