Recent Estate Tax Legislation

SB396: Estate Tax - Pilot Program for Payment Deferral for Qualified Agricultural Property

This Act adds a new provision to Title 7 of the Tax-General Article relating to alternate payment schedules for Maryland estate tax imposed on agricultural and personal property used for farming purposes. The new Section 7-307(e) provides for a payment deferral of three years from the due date for Maryland estate tax imposed on property passing from a decedent to or for the use of an individual who enters into an agreement to use the property for farming purposes after the decedent's death. The amount that may be deferred is determined by multiplying the percentage of property of the gross estate that is used for farming purposes times the estate tax due. The amount of tax deferred under this section may not exceed $375,000 as to any decedent.

If a payment deferral is allowed, the deferred estate tax shall be paid without interest in accordance with a payment schedule prescribed by the Comptroller over a three-year period beginning in the fourth year after the due date. Interest does not begin on unpaid estate tax until the tax is due under the schedule.

To be eligible for the payment deferral, a qualified recipient must file an application and enter into an agreement in a form specified by the Comptroller to use the qualified agricultural property for farming purposes after the decedent's death and file periodic reports or allow periodic inspections as required by the Comptroller.

The new provision further provides that on or before October 1, 2013, the Comptroller shall submit a report to the General Assembly, in accordance with Section 2-1246 of the State Government Article, and the Maryland Agricultural Land Preservation Foundation concerning:

  • the number of approved applications for Maryland estate tax payment deferral;
  • the number of agricultural acres in which a Maryland estate tax payment deferral was approved under the payment deferral pilot program;
  • the number of qualified agricultural properties approved for Maryland estate tax payment deferral that apply to preserve agricultural land under the Maryland Agricultural Land Preservation Foundation;
  • the aggregate value of Maryland estate tax payment deferrals approved under the payment deferral pilot program;
  • the aggregate amount of Maryland estate taxes paid due to exceeding the maximum amount eligible for payment deferral under the payment deferral pilot program; and
  • recommendations for implementing a Maryland estate tax payment deferral program in the State.

This Act takes effect on July 1, 2010 and will be applicable to decedents dying after December 31, 2010. However, the Act will remain effective only for a period of four years and, at the end of June 30, 2014, with no further action required by the General Assembly, shall be abrogated and of no further force and effect.

SB156: Filing of Maryland Estate Tax Return

Senate Bill 156 (Chapter 202, Acts of 2009)

This Act amends three sections of Title 7 of the Tax-General Article relating to the filing of the Maryland estate tax return.

The amendments to 7-305(a) and (b) change the requirement that the Maryland estate tax return be filed with the local register of wills, to allow the Maryland estate tax return to be filed directly with the Comptroller. Amendments to 7-305(c) and 7-306(c) require that all amended Maryland estate tax returns be filed directly with the Comptroller. Finally, the amendment to 7-232 creates an option concerning the mode of certification of inheritance taxes paid on behalf of each decedent.

Since this Act requires that Maryland estate tax returns be filed with the Register of Wills or with the Comptroller, and that all amended Maryland estate tax returns be filed with the Comptroller, the amendment to 7-232 provides that each register of wills shall certify to the Comptroller the amount of inheritance tax paid on behalf of each decedent for whom a Maryland estate tax return is filed with the register or for whom the register receives a request for the certification from:

  • the Comptroller;
  • the personal representative of the decedent's estate; or
  • any person required to file a Maryland estate tax return with regard to property passing from the decedent.

This Act takes effect July 1, 2009 and will be applicable to all decedents dying after December 31, 2008.

Inheritance Tax Legislation

HB443: Maryland Inheritance Tax - Exemption - Spouses of Predeceasing Descendants

This Act amends Section 7-203(b) of the Tax-General Article to provide an exemption from the inheritance tax for property that passes from a decedent to or for the use of a surviving spouse of a deceased child or of a deceased lineal descendant of a child of the decedent who was married to the child or lineal descendant of the child at the time of the child's or lineal descendant's death. Under the terms of this provision, "surviving spouse" means a surviving spouse who has not remarried.

This Act takes effect July 1, 2010, and will be applicable to decedents dying after July 1, 2010.