State Legislative Summaries

2021 Legislation

House Bill 0421/ Senate Bill 0480 - Income Tax Distribution - Tax Clinics for Low-Income Marylanders

This bill establishes the Tax Clinics for Low-Income Marylanders Fund and requires the Comptroller to distribute, for fiscal years 2022 and 2023, $250,000 of the abandoned property special fund to the Tax Clinics for Low-Income Marylanders Fund, which provides grants for tax clinics at the University of Maryland School of Law, the University of Baltimore School of Law, and the Maryland Volunteer Lawyers Service.

Senate Bill 0294/House Bill 0582 - Cecil County - Sales and Use Tax Exemption - Federal Facilities Redevelopment Areas

This bill provides an exemption from the sales and use tax for construction material or warehousing equipment purchased for use on real property in Cecil County that was previously owned by the federal government, was transferred from the federal government to the State, and is entirely under the environmental management of the State Hazardous Substance Response Plan. The buyer claiming the exemption must provide to the vendor evidence of eligibility issued by the Comptroller.

House Bill 0007 - Venison Donation Expenses - Income Tax Credit and Grant Program

This bill alters the existing venison donation income tax credit by extending eligibility to certain donations made to the Montgomery County Deer Donation Program.

Senate Bill 0019 - Economic Development - Biotechnology Investment Incentive Tax Credit Program - Alterations

This bill alters the biotechnology investment incentive tax credit by reducing the percentage value of the tax credit and altering certain eligibility requirements. The bill also prohibits the Department of Commerce from certifying investments in a single biotechnology company (1) that exceed 10% of the total appropriations to the reserve fund for that fiscal year or (2) whose investors have received $7.0 million in aggregate funding for all fiscal years.

Senate Bill 0102/House Bill 1252 - Income Tax - Credits for Preceptors in Areas With Health Care Workforce Shortages

This bill extends to June 30, 2026, the termination dates of the licensed physician and nurse practitioner preceptor income tax credit, and alters the number of training hours required to qualify for the credit. The bill also establishes a physician assistant preceptor income tax credit.

Senate Bill 0186 - Economic Development - Job Creation Tax Credit - Credit for Hiring Veterans

This bill (1) extends the termination date for the job creation tax credit to January 1, 2027; (2) establishes an enhanced job creation tax credit for the hiring of a qualified veteran; and (3) extends program eligibility to small businesses who hire a qualified veteran. The bill also repeals the Hire Our Veterans Tax Credit.

Senate Bill 0196 - Economic Development - Research and Development Tax Credit - Alterations

This bill extends the termination date for the research and development tax credit to June 30, 2025. The bill also alters the tax credit by (1) eliminating the basic credit; (2) increasing to $12 million the amount of growth tax credits that can be awarded in each tax year; (3) requiring the Department of Commerce to set aside $3.5 million of the total tax credits awarded annually to qualified small businesses; (4) limiting to $250,000 the maximum value of the tax credit; (5) defining net book assets for the purpose of determining small business eligibility; and (6) establishing the purpose of the program.

Senate Bill 0218/House Bill 0143 - Income Tax - Child Tax Credit and Expansion of the Earned Income Credit

This emergency bill expands eligibility of the State and local earned income tax credits and thereby the State and local poverty level credits, by allowing a taxpayer to claim the tax credits notwithstanding certain federal requirements. The bill also creates a refundable credit against the State income tax equal to $500 for each dependent child who is a qualified dependent under Section 152 of the Internal Revenue Code and is under the age of 17 years and has a disability. In order to qualify, a taxpayer must have a federal adjusted gross income of $6,000 or less. The credit is reduced by the amount of any federal child tax credit claimed for the child in the year.

House Bill 0752/Senate Bill 0539 - Income Tax Credit - Food Donation Pilot Program - Extension

This bill extends the food donation income tax credit for qualified farms for two additional tax years through tax year 2023.

House Bill 1017/Senate Bill 0769 - Income Tax Credit for Venison Donation - Reporting Requirement and Testing for Chronic Wasting Disease

This bill requires a venison donation program to report annually to the Comptroller by January 31 of each year the name, address, and number of deer donated by individuals in the preceding tax year. The Department of Natural Resources must report to the General Assembly by December 31, 2021, on the testing of deer brought to deer processors for chronic wasting disease.

Senate Bill 0160 - Economic Development - Cybersecurity Investment Incentive Tax Credit Program - Expansion, Extension, and Study

This bill extends the duration of the Cybersecurity Investment Incentive Tax Credit Program by two years, through June 30, 2025, and expands the applicability of the program to technology companies, rather than solely cybersecurity companies. The program and its reserve fund are renamed accordingly. The credit will be called the Innovation Investment Incentive Tax Credit.

House Bill 0010/Senate Bill 0048 - Income Tax - Subtraction Modification - Living Organ Donors

This bill increases, from $7,500 to $10,000, the amount of the maximum subtraction modification for certain expenses paid or incurred by an individual that are attributable to the individual's donation of an organ. The bill also alters the definition of "qualified expenses" to include unreimbursed child or elder care expenses, as well as unreimbursed medication expenses.

House Bill 0495/Senate Bill 0578 - Income Tax - Internal Revenue Code Amendments - Decoupling

This bill changes the automatic one-year decoupling provision. Beginning in tax year 2021, automatic decoupling also applies to any taxable year preceding the calendar year in which the amendment is enacted when the Comptroller determines that the federal change will have at least a $5 million impact in the fiscal year preceding the calendar year in which the amendment is enacted.

House Bill 1178 - Income Tax - Subtraction Modification - First-Time Homebuyer Savings Account

This bill allows a subtraction modification for contributions to a first-time homebuyer savings account and certain earnings on the account. The subtraction includes up to $5,000 of the amount contributed by an account holder to a first-time homebuyer savings account, as well as any earnings, including interest. If an individual withdraws funds from such account for a purpose other than eligible costs for the purchase of a home, the funds will be taxed as ordinary income and the account holder will be subject to a 10% penalty.

House Bill 0711/Senate Bill 0622 - Income Tax - Subtraction Modification - Donations to Diaper Banks and Other Charitable Entities

This bill allows an income tax subtraction of up to $1,000 for certain qualifying diaper, hygiene products, or monetary donations to diaper banks or other qualified charitable entities by taxpayers in a given calendar year.

Senate Bill 0885 - Economic and Community Development - Income Tax Credit for Catalytic Revitalization Projects and Historic Revitalization Tax Credit

This bill creates a refundable income tax credit for 20% of rehabilitation and new construction costs for a qualifying catalytic revitalization project. A qualifying catalytic revitalization project is defined as a substantial renovation of a property formerly owned by the state or federal government that was previously used as a college, K-12 school, hospital, mental health facility, or military facility. The Department of Housing and Community Development will administer the credit and may only issue certificates for a limited number of projects in a given period.

House Bill 1279/Senate Bill 0778 - Regional Institution Strategic Enterprise Zone Program - Alterations

This bill changes the existing Regional Institution Strategic Enterprise (RISE) Zone Program by establishing a rental assistance program, establishing a Regional Institution Strategic Enterprise Fund, enhancing biotechnology investment incentive and cybersecurity investment incentive tax credits, limiting the zone size, and limiting existing income and property tax credits to businesses that are located in a RISE zone before January 1, 2023.

Senate Bill 0496/House Bill 0612 - Recovery for the Economy, Livelihoods, Industries, Entrepreneurs, and Families (RELIEF) Act

This bill establishes several enhanced tax benefits for individuals and businesses. For tax years 2020 through 2022, the bill expands the refundable earned income credit. The bill also requires the Comptroller to send economic impact payments to taxpayers who received earned income credits for tax year 2019, and exempts these payments from the State income tax. Additionally, for tax years 2020 and 2021, the bill allows a subtraction under the Maryland income tax for certain unemployment insurance benefits and coronavirus relief payments, and it authorizes eligible vendors to retain an increased vendor tax credit for the three consecutive months following enactment.

Lastly, this bill also made alterations to the elective pass-through entity tax enacted by 2020 Senate Bill 0523. More information about the elective pass-through entity tax can be found in Administrative Release 6.

Senate Bill 0787 - Digital Advertising Gross Revenues, Income, Sales and Use, and Tobacco Taxes - Alterations and Implementation

This bill creates a subtraction modification for certain utility arrearage amounts forgiven in tax year 2021, pursuant to the RELIEF Act. The bill also exempts broadcast and news media entities from the digital gross revenues tax, prohibits a person from directly passing on the cost of the tax to a customer through a separate fee, surcharge, or line-item, and specifies that the digital advertising gross revenues tax applies to taxable years beginning after December 31, 2021. The bill also modifies the definition of a pass-through entity’s taxable income for entities electing to pay the entity-level tax. Additionally, the bill alters the definitions of digital product and digital code. Lastly, the bill specifies the date on which the floor tax on cigarettes and other tobacco products is assessed and required to be remitted to the Comptroller.

House Bill 0712/Senate Bill 0591 - Bureau of Revenue Estimates - Tax Incidence Study - Scope and Intergovernmental Assistance

This bill requires that the tax incidence report prepared by the Bureau of Revenue Estimates measure the burden of taxes and toll charges, including the individual income tax, the motor fuel tax, the real property tax, and the sales and use tax, as well as the aggregate impact of the taxes and charges among taxpayers of different income levels.

House Bill 0804/Senate Bill 0916 - Taxes - Whistleblower Reward Program and Statute of Limitations for Tax Collections

This bill establishes a reward program for whistleblowers who provide information to the Comptroller in a sworn affidavit relating to the violation of state tax law. The whistleblower will be entitled to a monetary award of at least 15% but not exceeding 30% of the taxes, penalties, and interest collected through an enforcement action. The bill also prohibits employers from retaliating against whistleblowers.

House Bill 1086 - Maryland Tax Credit Evaluation Act - Alterations

This bill requires that, within one year after the enactment of an income tax credit, state government units administering such credits report to the Senate and House on the measures the unit has taken to implement the credit.

House Bill 0441/Senate Bill 0366 - Department of Assessments and Taxation - Identification Number for Business - Task Force

This bill requires SDAT to convene a task force to study and make recommendations on the adoption of a unique Maryland Identification Number for registered or licensed businesses.

House Bill 0337/Senate Bill 0257 - Sales and Use Tax - Vendor Collection Credit - Job Training

This bill authorizes certain vendors certified by the Secretary of Labor as qualified job training organizations to claim credits, not to exceed $100,000 for any calendar year, for the expense of collecting and paying sales and use tax.

Senate Bill 0883/House Bill 1234 - Tobacco Tax and Sales and Use Tax - Out-of-State Sales of Premium Cigars and Pipe Tobacco and Tobacco Smoking Devices

This bill requires certain out-of-state tobacco sellers to have a license in order to sell certain products to consumers in the State. The bill also establishes the tax rate for out-of-state sales of certain tobacco products, and imposes certain record-keeping responsibilities on out-of-state tobacco sellers.

Senate Bill 0659/House Bill 0865 - Historic Revitalization Tax Credit - Small Commercial Projects - Alterations

This bill increases from $4 million to $5 million the maximum amount of initial tax credit certificates that the Director of the Maryland Historic Trust may issue for certain small commercial projects.

House Bill 0528 - St. Mary's County - Repeal of Impact Fee - Authorization of Building Excise Tax

This bill authorizes St. Mary's County to impose a building excise tax on any building construction in the county. The county's existing authority to impose a development impact fee is repealed.

House Bill 0732 (Veto Override of 2020 Bill) - Taxation - Tobacco Tax, Sales and Use Tax, and Digital Advertising Gross Revenues Tax

This bill increases tax rates on certain tobacco products and imposes a sales and use tax rate of 12% on electronic smoking devices. The bill also imposes a tax on revenues from certain digital advertising services in the state.

House Bill 0932/Senate Bill 1001 (Veto Override of 2020 Bill) - 21st-Century Economy Fairness Act

This bill applies the sales and use tax to digital products and codes. Such sales are presumed to be made in the state in which the customer tax address, defined in the bill, is located.

Prior Year Legislation

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