Maryland has become the first state to partner with the federal government to collect back taxes from vendors, Comptroller Peter Franchot announced Wednesday.

“We know we will collect $2 million” this year, Franchot said. “We believe ultimately we will collect tens of millions.”

Maryland shares files with the federal government. When the U.S. treasury makes a payment for goods or services to a vendor that owes back taxes to Maryland, the feds will deduct those taxes from the federal payment.

The program started June 11, and last week it brought in close to $50,000 from 69 vendors for Maryland, hence the $2 million estimate on an annual basis.

This story continues below
Advertisement

The state will reciprocate, withholding payments to contractors who still owe federal taxes.

Franchot’s office said that netted the federal government $42,000 from 38 state vendors last week.

Christine Duray from Franchot’s staff said they could not name any of the vendors since they are not charged with any crimes, but they range from cleaning contractors to construction companies.

“We were already doing tax refunds,” Duray said, deducting back taxes from any federal income tax refunds due to individuals or companies. That program brought in almost $20 million so far this year from 27,000 taxpayers.

The new federal program “increases the scope of our reach,” Duray said, adding “another tool in our arsenal for going after delinquent taxpayers.”

llazarick@baltimoreexaminer.com