It is well-known that the consequences of having a tax debt when it comes to federal taxes can be substantial. However, it is important to note that owing back taxes to a state is also a gravely serious matter.
Here in Maryland, individuals can face significant collection actions if they are found to have unpaid state taxes. Also, such a finding can lead to a person having their ability to practice their profession or operate their business in the state impaired, given state policies regarding professional/business license holds for tax delinquency.
Many individuals here in Maryland have a business or professional license with one of the following agencies: the Department of Labor, Licensing and Regulation, the Motor Vehicles Administration, the Department of Health and Mental Hygiene, the offices of the Clerks of the Circuit Court, the office of the Comptroller of Maryland, the Department of the Environment and the Department of Natural Resources.
When a person is in the process of getting a professional or business license renewed by one of these agencies, one of the things the agencies will look at is if the individual has any unpaid tax debt with the state of Maryland. If a person has such a tax debt and does not currently have a payment arrangement in place regarding the debt, they will not be granted the renewal. One could understand how not receiving such a renewal could have substantial professional consequences for an individual.
Given the major impacts having an unpaid tax debt with Maryland can have on an individual, it can be vital for an individual to take prompt action when they are facing state claims of owing back taxes. Tax attorneys can help a person determine what actions are best suited for their specific situation.
Source: Comptroller of Maryland, "Business and Professional License Hold," Accessed July 17, 2014