by Saleem A. Shareef
The Maryland Comptroller’s Office has provided guidance on filing the 2022 Digital Advertising Gross Revenues Tax Return as well as the safe harbor qualification for estimated tax payments. (Maryland Tax Alert 02-15-2023, Maryland Comptroller’s Office, 02/15/2023.)
New Form 600.
The tax on annual gross revenues derived from digital advertising services in Maryland was enacted in 2021, but 2022 was the first year it was imposed. Generally, the tax must be reported by April 15 following the close of the tax year. For tax year 2022, the Maryland Comptroller’s Office has published new Form 600 (Digital Advertising Gross Revenues Tax Return).
2022 filing and payment of digital advertising gross revenues tax.
Form 600 is due Monday, April 17, 2023 because April 15, 2023 falls on a Saturday. The new form is available on the comptroller’s website. Currently, there is no provision in Maryland law allowing a 6-month filing extension. Interest accrues on unpaid tax from the date the tax is due. Any payment due can be paid by electronic funds transfer (EFT) or mailing a check to the address indicated on the form. Taxpayers should not make payment to a corporate income tax account. Amounts paid by ACH on a corporate income tax account cannot be transferred to a digital advertising gross revenues tax account.
Estimated tax payments.
Interest is imposed on underpayment of estimated taxes unless a taxpayer qualifies for a safe harbor. To qualify, estimated tax payments must be made equal to at least 110% of the prior year tax or 90% of the current year tax. Since the digital advertising gross revenues tax was imposed for the first time in tax year 2022, every taxpayer’s prior year tax equals $0. Therefore, all taxpayers qualify for the safe harbor for tax year 2022, and Form 600UP for calculating underpayment of estimated tax will not be published by the comptroller.
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