Starting in 2011, the Maryland Motor Vehicle Administration (“MVA”) began assisting the Comptroller of Maryland and the Department of Labor, Licensing and Regulation (“DLLR”) in collecting outstanding state tax liabilities and unpaid unemployment insurance contributions by placing a “MVA hold” on a taxpayer’s account, including individual and business taxpayers. While the MVA hold is in place, taxpayers will not be able to renew their driver’s license, receive replacement or substitute tags, and/or renew their vehicle registration.
Why is an MVA hold put in place?
The Comptroller’s Office has discretion whether or not to hold a taxpayer’s driver’s license or vehicle registration if the taxpayer has failed to pay all outstanding taxes, including income tax, sales and use tax, admissions and amusement tax, corporate income tax, withholding tax, pass-through entity tax, alcohol tax, tobacco tax, and motor fuel and motor carrier taxes. Generally, taxpayers that are working with the Comptroller’s Office to pay the liability (i.e., through a payment plan) will not have a hold placed on their account.
How can an MVA hold be released?
If the MVA hold is due to unpaid tax liability, then a taxpayer must contact the Comptroller’s office in order to have the MVA hold removed. The taxpayer must arrange to pay the outstanding tax obligation in order to have the Comptroller remove the hold. If a taxpayer does not act, the license and/or registration will lapse on the expiration date.
If taxpayer can full pay the obligation, the Comptroller will release the hold and the MVA will be clear to issue/renew the license, tag, or registration in about two business days. If a taxpayer cannot full pay the liability, then taxpayers can enter into a payment plan to satisfy the outstanding liability. In order to enter into a payment plan, the Comptroller generally requires that the taxpayer file all unfiled tax returns. And the Comptroller generally requires a down payment in order to establish the payment plan. Once a taxpayer enters into a payment plan, the Comptroller will usually release the MVA hold. It generally takes a couple of business days for the release to process such that MVA issue/renew the license, tag, or registration.
Taxpayers can also contest the underlying tax liability if they believe that the Comptroller has made a mistake.
If an individual has an outstanding unemployment insurance obligation, the individual must work with DLLR to satisfy the debt in order to have the MVA hold released.
Business and Professional License Hold
In addition to placing a hold with the MVA, several state and local agencies must verify with the Comptroller that an applicant does not have any outstanding state taxes due before renewing the license. Applicants must file necessary tax returns and make arrangements to pay their outstanding state tax obligation in order to avoid having their application for renewal denied.
Assistance with MVA Hold Release or License Hold Release
If you have an MVA hold or business/professional license hold, we can assist you in determining what steps must be taken in order to have the Comptroller release the MVA hold or verify that the state tax obligations have been satisfied. We can assist with the filing of unfiled tax returns and negotiate a payment plan to obtain a release.