Franchot Announces BPW Approval of $160 Million Contract to Replace State Tax Processing System

ANNAPOLIS, Md. (December 19, 2018) - Comptroller Franchot announced today that the Board of Public Works has approved a $159.7 million contract to replace and upgrade the state’s tax processing system with a state-of-the-art program that will expand revenue-generating projects, provide enhanced reporting functionality and make it easier for taxpayers to view their accounts with the agency. The contract was unanimously awarded to Pembroke, Massachusetts-based Revenue Solutions Inc.

“I am very excited about our new COMPASS tax system, which will let us process tax returns more quickly and stop tax cheats from stealing Marylanders’ hard-earned money,” said Comptroller Franchot. “For taxpayers, this means an even speedier tax refund and a more user-friendly experience that will eventually let them view and manage their accounts online.”

The COMPASS tax processing system will replace the agency’s State of Maryland Tax (SMART) system, Computer Assisted Collection System and other antiquated tax processing systems that operate on outdated, often-unsupported technology platforms.

Some highlights of the new system include:

  • Improved fraud detection and prevention programs. Compass will provide additional information in a centralized system that will allow the agency to use more complete and complex fraud models, reducing the number of fraudulent refunds issued and streamlining the pursuit and recovery of refunds obtained by fraud.
  • Increased ability for taxpayers to manage their accounts via online self-service applications. Taxpayers will be able to manage accounts online. After an initial learning period, the increase in online services will result in a reduction in call center and correspondence volumes.
  • Maximized compliance with best-practice security standards, internal controls and policies. The new system will improve the agency’s security posture by allowing for the implementation of additional cutting-edge security controls.
  • Maximized audit, collection, reporting and estimating functionality. Applying analytics to processing data will result in more efficient audit selection, targeted collections, flexible reporting and more refined estimating.
  • System stability and security. Maintaining the current system requires tremendous effort from very specialized resources that are increasingly harder to acquire. It is only a matter of time until the current system fails or becomes unable to handle new requirements, such as additional tax types.

The new system will be implemented over the next several years, but there will be no impact for the 2019 tax season. Upon completion, the Comptroller’s Office will be able to make changes to Maryland tax laws more quickly than it can now and be more responsive to taxpayers’ needs.

MEDIA CONTACTS:
Joseph Shapiro -  
jshapiro@comp.state.md.us
410-260-7305 (office); 443-871-2244 (mobile)

Alan Brody -  abrody@comp.state.md.us
410-260-6346 (office); 443-924-1473 (mobile)

Comptroller Franchot’s Statement on New Revenue Estimates

ANNAPOLIS, Md. (December 12, 2018) - The Board of Revenue Estimates voted today to decrease its September 2018 revenue projections for Fiscal Year 2019 by 0.1 percent to $18.07 billion – representing a $18.4 million decrease. Additionally, the board will be revising the September estimates for Fiscal Year 2020 to $18.71 billion, representing a 0.3 percent, or $55 million, decrease from its previous projections.

Following are Comptroller Franchot’s remarks, as prepared for delivery:

“At our September meeting, this Board voted to increase our revenue projections by more than $700 million. Thanks to a more than half-a-billion-dollar surplus after we closed the books on FY 2018, the state finds itself with more than $1 billion in unspent revenue as we approach the 2019 Session.

Included in the revenues is the considerable inflow of revenue resulting from Wayfair Supreme Court ruling and the Tax Cuts and Jobs Act of 2017. And as we chart a course for the state’s fiscal future, it is incumbent upon our policymakers to make thoughtful decisions on the path forward when it comes to how we spend the taxpayers’ hard-earned dollars.

The fact of the matter is that while our state’s economic bones remain strong, we continue to see stagnation in wage growth and permanent, long-term employment, both of which serve as critical indicators for our state’s fiscal and economic outlook.

This is the 113th month of economic expansion since the Great Recession, and the only other expansion to run longer was 119 months, which occurred during the tech boom back in the 1990s. So we’re six months out from that historic benchmark, and we cannot expect that we will defy the laws of economic gravity, and we must plan for the inevitable economic downturn that will occur in the future.

That’s why I have publicly called upon the Governor and the General Assembly to increase the state’s allocation into the Rainy Day Fund, especially now that the state’s bank account is considerably higher thanks to the unexpected injection of revenue from the Wayfair decision and the Federal Tax Cuts.

I took office the year before the Great Recession paralyzed our economy. And I, like many in this room, remember the very difficult choices that we had to make as our state tried to weather through the Great Recession.

Budget cuts, furloughs, tax increases were some of the tough decisions that were made by the previous Administration and the General Assembly to balance our state’s books. Because it is impossible to foresee unexpected and disruptive changes to our economy due to market volatility and trade uncertainty, and given the continued political turmoil that paralyzes Washington, we – here in Maryland – have an obligation to do everything we can to plan for future economic downturns.

We have to show Maryland taxpayers that we learned our lessons from the Great Recession, and that we – like so many working families and small businesses – are going through our budget line-by-line and foregoing the things we want, in order to pay for the things we need.

As the Governor and legislators prepare to convene for the 2019 Legislative Session, let me once again publicly renew my call for fiscal restraint. I know the General Assembly will be considering a number of very worthy and critically important programs and proposals in the upcoming year.

But it is my sincere hope that my colleagues up the street would be mindful of the great need to carefully consider these proposals’ impact on the state’s fiscal health and the financial well-being of hardworking Marylanders across our state.”

View the data here.

MEDIA CONTACTS:
Joseph Shapiro -  
jshapiro@comp.state.md.us
410-260-7305 (office); 443-871-2244 (mobile)

Alan Brody -  abrody@comp.state.md.us
410-260-6346 (office); 443-924-1473 (mobile)

Comptroller Franchot Announces New Cornerstone Award for Local Business Excellence

ANNAPOLIS, Md. (November 26, 2018) - Comptroller Peter Franchot today announced his office is accepting nominations for a new award recognizing businesses that celebrate the guiding values of independence, innovation and investment that define Maryland’s local business community.

The “Cornerstone Award for Local Business Excellence” will celebrate businesses that strengthen Maryland’s economy, generate jobs and tax revenue, develop new ideas that more effectively deliver services and products within the marketplace and lead by example in their local community.

“Maryland has many innovative and diverse businesses that step up, pave the way forward and assume the risk to change and improve how we experience the world and go about our daily lives,” Comptroller Franchot said. “This award will recognize these leaders in all of our communities, large and small, for their contributions to Maryland’s economy.”

Nominations will be accepted through December 31. One business will be selected from each of Maryland’s 23 counties and Baltimore City. Awards will be presented from January through the end of June. Businesses of any sector and any size are eligible for the award.

The nomination form should detail how the business is transforming their industry and/or impacting the world around them through their independence, innovation or investment and what future opportunities may follow.

MEDIA CONTACTS:
Joseph Shapiro - 
 jshapiro@comp.state.md.us
410-260-7305 (office); 443-871-2244 (mobile)

Alan Brody –  abrody@comp.state.md.us
410-260-6346 (office); 443-924-1473 (mobile)

Franchot Announces Seizure of Contraband Alcohol in Baltimore

ANNAPOLIS, Md. (October 22, 2018) - Comptroller Peter Franchot announced that his Enforcement Bureau of the Field Enforcement Division made a significant seizure of contraband alcoholic beverages on October 11 at a Baltimore liquor licensed business with assistance from the Baltimore City Liquor Board Inspector and Baltimore City Vice Detectives.

“My Field Enforcement Division team is ever vigilant in its efforts to make sure all businesses are playing by the same rules,” Comptroller Franchot said. “I applaud their work and the assistance from the city liquor board and Baltimore police. These combined law enforcement efforts level the field for all businesses and protect Maryland’s consumers.”

On October 11, agents and inspectors from the Enforcement Bureau along with Baltimore City Liquor Board and Baltimore Police Department Vice Unit conducted an unannounced liquor inspection at Indulge Gentleman’s Club at 403 E. Baltimore Street, located in an area known as “The Block.” The purpose of this routine liquor inspection was to assure compliance with state laws and regulations. The licensee is Donald Savoy of Don West Management, trading as “Indulge.”

During the inspection, 61 bottles of distilled spirits with a retail value of $1,332.85 were seized as products obtained from a supplier other than a wholesaler. In Maryland, a retailer may not purchase/keep an alcoholic beverage on the licensed premises which was purchased from other than a licensed wholesaler.

All details and evidence will be forwarded to the Baltimore City Liquor License Board located at 231 E. Baltimore Street by the Comptroller’s Enforcement Bureau to be used at the board’s discretion for administrative action and subsequent sanctions.

FED agents and inspectors conduct random routine inspections at licensed retailers  of alcoholic beverages throughout the state to assure that Maryland’s alcoholic beverage laws are being followed. Liquor-licensed retailers can only be in possession of and sell alcoholic beverages that were supplied to them by a licensed Maryland wholesaler to assure that the alcohol excise tax has already been paid by the wholesaler who supplied the product to the retailer.

MEDIA CONTACTS:
Joseph Shapiro -  
jshapiro@comp.state.md.us
410-260-7305 (office); 443-871-2244 (mobile)

Alan Brody -  abrody@comp.state.md.us
410-260-6346 (office); 443-924-1473 (mobile)

Comptroller Agents Confiscate More Than $40K in Tobacco Products

ANNAPOLIS, Md. (October 11, 2018) - Comptroller Peter Franchot today announced that agents from his Field Enforcement Division (FED) made significant seizures of untaxed other tobacco products (OTP) and unstamped cigarettes, and executed an undercover purchase of a single cigarette as a result of a planned operation at Tobacco Heaven, a retail store at 4831 Silver Hill Road in Suitland. 

Following an inspection on October 3, agents seized 38,270 sticks of untaxed OTP with a retail value of $38,270 and representing a tax loss of $26,789 as well as 272 packs of unstamped cigarettes seized with a retail value of $1,754.40 and representing a tax loss of $544.

The two men who face charges are:

  • Mehboob-Ul Haq Chowdhury, 36, of Suitland, owner of Tobacco Heaven, charged with willful possession, sale or offer to sell untaxed other tobacco products; unlawful possession of unstamped cigarettes; and as a Maryland licensed retailer of OTP unlawfully possessing OTP products, excluding premium cigars and pipe tobacco that had not been purchased from a Maryland licensed wholesaler.
  • Mohammed Saiful Islam, 24, of Suitland, clerk at Tobacco Heaven, charged with selling unpackaged cigarettes; willful possession, sale or offer to sell untaxed other tobacco products; and as a Maryland licensed retailer of OTP unlawfully possessing OTP products, excluding premium cigars and pipe tobacco that had not been purchased from a Maryland licensed wholesaler.

“Once again, tax cheats show that they have no regard for the law and no respect for fellow Marylanders who benefit from tobacco tax revenues, ” said Comptroller Franchot. “My FED officers will continue to crack down on criminals who think they are above the law.”

FED Agents and inspectors conduct random routine inspections of retailers of tobacco products throughout the state to ensure that the tobacco excise tax is being paid on all tobacco products sold and all other state laws are followed. Retailers can only be in possession of and sell tobacco products when the tobacco excise tax has already been paid by the licensed Maryland wholesaler that supplied the product to the retailer.

During the inspection, all of the untaxed tobacco products seized were comprised of non-premium cigars. A retailer in Maryland can only lawfully possess and sell non-premium cigars that were purchased from a licensed Maryland wholesaler of OTP. In addition, the retailer must possess invoicing for all OTP inventory they possess from that licensed Maryland wholesaler that must indicate the Maryland excise tax was previously paid to the State by the wholesaler.

To date in fiscal year 2019, FED agents have arrested and charged 28 individuals for various tobacco violations as a result of discovering 31 instances of violations of Maryland’s tobacco laws. These arrests have resulted in the seizure of 4,743 packs of contraband cigarettes and the seizure of 169,712 sticks of OTP. The seized items are valued at $200,297.90 and represent a $128,158.80 tax loss to the State of Maryland.

MEDIA CONTACTS:
Joseph Shapiro - 
 jshapiro@comp.state.md.us
410-260-7305 (office); 443-871-2244 (mobile)

Alan Brody –  abrody@comp.state.md.us
410-260-6346 (office); 443-924-1473 (mobile)

Baltimore Shop Owner Charged Following Comptroller’s Inspection

ANNAPOLIS, Md. (October 11, 2018) - Comptroller Peter Franchot today announced that agents from his Field Enforcement Division (FED) made a significant seizure of untaxed other tobacco products (OTP) as a result of a planned operation at Lombard Liquors, a tobacco retail store located at 1000 West Lombard Street in Baltimore City.

Following an inspection on October 10, agents seized 8,636 sticks of untaxed OTP with a retail value of $8,636 and representing a tax loss of $6,045.20.Store owner Harpal Badwal, 44, of White Marsh, was charged with willful possession, sale or offer to sell untaxed other tobacco products and as a Maryland licensed retailer of OTP unlawfully possessing OTP products, excluding premium cigars and pipe tobacco that had not been purchased from a Maryland licensed wholesaler. 

“My FED officers should be commended once again for stopping cigarette smugglers who are trying to cheat Maryland and its citizens,” Comptroller Franchot said.

FED agents and inspectors conduct random routine inspections of retailers of tobacco products throughout the state to ensure that the tobacco excise tax is being paid on all tobacco products sold and all other state laws are followed. Retailers can only be in possession of and sell tobacco products when the tobacco excise tax has already been paid by the licensed Maryland wholesaler that supplied the product to the retailer.

During the inspection, all of the untaxed tobacco products seized were comprised of non-premium cigars. A retailer in Maryland can only lawfully possess and sell non-premium cigars that were purchased from a licensed Maryland wholesaler of OTP. In addition, the retailer must possess invoicing for all OTP inventory they possess from that licensed Maryland wholesaler that must indicate the Maryland excise tax was previously paid to the State by the wholesaler.

To date in fiscal year 2019, FED agents have arrested and charged 28 individuals for various tobacco violations as a result of discovering 31 instances of violations of Maryland’s tobacco laws. These arrests have resulted in the seizure of 4,743 packs of contraband cigarettes and the seizure of 169,712 sticks of OTP. The seized items are valued at $200,297.90 and represent a $128,158.80 tax loss to the State of Maryland.

MEDIA CONTACTS:
Joseph Shapiro - 
 jshapiro@comp.state.md.us
410-260-7305 (office); 443-871-2244 (mobile)

Alan Brody -  abrody@comp.state.md.us
410-260-6346 (office); 443-924-1473 (mobile)

Comptroller’s FED Director Led NJ Conference on Alcoholic Beverages

ANNAPOLIS, Md. (September 28, 2018) – Comptroller Peter Franchot is proud to announce that Jeff Kelly, director of his agency’s Field Enforcement Division, presided over the 2018 Northern-Southern Regional three-day conference of the New Jersey Division of Alcoholic Beverage Control at the Borgata Hotel Casino & Spa in Atlantic City, NJ.

Kelly is president of the National Conference of State Liquor Administrators (NCSLA). After serving as first vice president, he was elected to a one-year term in June by his peers at NCSLA.

“Maryland has been a member of the NCSLA since the organization’s inception in 1934,” Director Kelly said. “The NCSLA exists to be an educational resource to regulators and beverage alcohol industry members. I am honored to be serving this year as president and very proud to be the fourth NCSLA president from Maryland.”

The conference’s agenda focused on alcohol regulation in the United States, including APPs, Bitcoin and Tech Factor; bringing the regulator and regulated together to find common ground and solutions; how opioids and human trafficking affect the alcohol industry; the rise of the craft industry and its impact; and enforcement of direct-to-consumer alcohol shipments.

“I am proud of the work my Field Enforcement Division agents do each day protecting Marylanders by investigating unscrupulous business practices involving alcohol sales and enforcing the state’s regulatory statutes,” Comptroller Franchot said. “Hats off to Director Kelly for taking the lead of this national group of administrators and to Mr. Foxwell for participating as a panelist.”

Joining Kelly as one of the conference presenters was Len Foxwell, chief of staff for the Comptroller of Maryland. Foxwell took part in a panel with members from Virginia and Kentucky to talk about taskforces or study commissions charged with comprehensive review of liquor regulations in their states. The discussion included the process, composition, procedures and timelines in group settings, results and implementation efforts. In Maryland, the Comptroller Franchot created a Reform on Tap taskforce to study Maryland’s craft beer industry.

The Field Enforcement Division is Maryland’s regulatory and enforcement agency for the State’s alcohol, tobacco and motor fuel industries. Prior to being appointed director in 2008 by Comptroller Franchot, Kelly worked as deputy director and as a field supervisor.

MEDIA CONTACTS:
Joseph Shapiro -  
jshapiro@comp.state.md.us
410-260-7305 (office); 443-871-2244 (mobile)

Alan Brody -  abrody@comp.state.md.us
410-260-6346 (office); 443-924-1473 (mobile)