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State Legislative Summaries

Senate Bill 621 (Chapter 574, Acts of 2009)

This Act expands the definition of "Solar energy equipment" in Tax-General Article §11-230(a)(3)(i) and Tax-Property Article 7-242(a) to include that the sales and use tax and real property tax does not apply to solar energy equipment that uses solar energy to generate electricity that is supplied to the electric grid.

This Act takes effect July 1, 2009.

House Bill 1399 (Chapter 166, Acts of 2009)

This Act amends applicable sections under Title 6 Subtitle 4 of the Housing and Community Development Article providing for the Neighborhood and Community Assistance Program, to expand the Neighborhood and Community Assistance Tax Credit by allowing the credit to be claimed by an individual, as defined under Section 10-101 of the Tax-General Article.

Currently, the Neighborhood and Community Assistance Tax Credit is available only to a business entity. This Act provides that the credit is allowed to either a business entity or an individual for contributions of $500 or more in goods, money or real property to a Department of Housing and Community Development (DHCD) approved project conducted by a nonprofit organization in a priority funding area. The allowable credit is equal to 50 percent of the amount contributed. However, the amount of credit that may be claimed in a taxable year may not exceed the lesser of $250,000 and the contributor's tax liability for the taxable year. Any excess credit may be carried over for up to 5 taxable years after the year in which the contribution was made or until the full amount of the excess credit is used, whichever is earlier.

To be eligible for this tax credit, the contributor is required to submit an application to the DHCD and receive an approval for the contribution.

This Act takes effect July 1, 2009, and shall be applicable to all taxable years beginning after December 31, 2009.

Senate Bill 698 - House Bill 883 (Chapter 593, Acts of 2009)

These Acts are cross-filed and are identical. These Acts add §13-905(f) to the Tax-General Article to require the Comptroller to directly deposit portions of an income tax refund into at least two accounts at one or more financial institutions, if requested by a refund claimant.

These Acts will take effect January 1, 2011.

Senate Bill 44 (Chapter 506, Acts of 2009)

This Act extends by three years the termination date for the sales and use tax exemption for sales to certain veterans' organizations, from June 30, 2009 to June 30, 2012.

This Act takes effect June 1, 2009.

Senate Bill 174 - House Bill 171 (Chapter 209, Acts of 2009)

These Acts are cross-filed and are identical. These Acts amend §17-1902 of the Business Regulation Article to exempt bulk vending machines, as defined in §11-201.1 of the Tax-General Article, from State licensing requirements for vending machines.

These Acts takes effect October 1, 2009.

Senate Bill 909 - House Bill 819 (Chapter 188, Acts of 2009)

This Act establishes a presumption that work performed by an individual paid by an employer creates an employer-employee relationship, unless the employer can show that the individual is an exempt person or an independent contractor, as defined by the statute established under this Act and the classifying regulations that the Commissioner of Labor and Industry (the "Commissioner") of the Department of Labor, Licensing, and Regulation (DLLR) shall issue.

This Act specifically prohibits an employer in the construction services and landscaping services industries from:

  • improperly misclassifying an employee; or
  • knowingly misclassifying an employee.

This Act sets forth the procedures and penalties for employer noncompliance that three areas of State government-labor and industry, workers' compensation, and unemployment insurance-may enforce. Any one of these three government units may impose civil penalties on an employer who is found to have improperly or knowingly misclassified employees. But only one set of penalties may be assessed against an employer who violates any of the Act's provisions. Penalties are more severe for an employer who is guilty of knowingly misclassifying an employee.

The Commissioner is authorized to investigate and enforce compliance with this Act and the regulations thereunder. To overcome the presumption of an employer-employee relationship, an employer may show that an individual is an "independent contractor" pursuant to the DLLR's "ABC" test, which is found under § 8-205 of the Labor and Employment Article, and Code of Maryland Regulations 09.32.01.18. If the Commissioner determines that the employer is in violation for failing to properly classify an employee, the Commissioner shall notify the Comptroller, the Office of Unemployment Insurance, the Maryland Insurance Administration, and the Workers' Compensation Commission to enable these agencies to assure the employer's compliance with the agencies' laws, utilizing their own definitions, standards, and procedures.

Upon notice, the Comptroller shall take its own actions pursuant to its authorities under the Tax-General Article to ensure that income tax withholdings for wages, as defined under Tax-General Article § 10-905(f), are recovered and credited to the affected employees, and that appropriate interest and penalties are assessed and collected.

A person who knowingly advises an employer to take action for the purpose of violating this Act is subject to a civil penalty of not more than $20,000. Under the provisions set forth for the DLLR's Labor and Industry Division, a person who holds a professional license as a lawyer or an accountant who commits such a violation is not subject to civil fines, but is subject to sanctions by the regulatory bodies in the State responsible for oversight of these professions. However, the penalty provisions for the DLLR's Division of Unemployment Insurance and the State Workers' Compensation Commission do not make this distinction, and thus a person who holds a professional license as a lawyer or an accountant and who commits such a violation may still be subject to civil fines.

This Act takes effect October 1, 2009.

House Bill 193 (Chapter 661, Acts of 2009)

This Act adds new §4-801 to a new subtitle in the Economic Development Article. This new subtitle, "Subtitle 8. Special Fund for Preservation of the Cultural Arts in Maryland," provides for this special fund. This new fund is for the purpose of providing emergency grants to cultural arts organizations, including museums, or similar entities in the State. The Act provides that the Comptroller must account for the fund.

The Act also amends Tax-General Article §2-202 to provide for a new revenue distribution. The Act adds §2-202(1)(i) and (ii) to provide that after making the required distribution in §2-201 of the Tax-General Article, the Comptroller shall distribute specified amounts from the revenue from admissions and amusement tax on electronic bingo and electronic tip jars under §4-102(d). First, the Comptroller must distribute the revenue attributable to a tax rate of 20 percent to the General Fund and then the revenue attributable to a tax rate in excess of 20 percent to the Special Fund for Preservation of the Cultural Arts in Maryland. The remaining distribution schedule in §2-202(2) remains unchanged.

The Act also amends §4-105(a-1) of the Tax-General Article to provide that except as provided in new §4-105(a-1)(2), the rate of admissions and amusement tax imposed on electronic bingo or electronic tip jars under §4-102(d) is increased to 30 percent of the net proceeds subject to tax.

The Act adds new §4-105(a-1)(2) to the Tax-General Article, which provides that if net proceeds subject to the state admissions and amusement tax are also subject to a county or municipal corporation admissions and amusement tax, the total tax cannot exceed a rate of 35 percent when added together. The new §4-105(a-1)(2) also provides that the county or municipal corporation admissions and amusement tax that is applicable to net proceeds may not exceed the rate of the admission and amusement tax imposed by the county or municipal corporation as of January 1, 2009.

This Act also extends the termination date for the authority for the operating of certain instant bingo games using electronic machines from July 1, 2009 to July 1, 2012 provided that the machines have been in operation for a one-year period ending December 31, 2007 or that the machines were in operation under a commercial bingo license as of December 31, 2007. The Act also mandates that on or before July 1, 2012, a county or municipal corporation may not impose a fee or tax on electronic bingo in addition to any tax or fee imposed by the county as of January 1, 2009.

This Act takes effect June 1, 2009.

House Bill 1171 (Chapter 444, Acts of 2009)

This Act expands Tax-General Article §11-230 and Tax-Property Article 7-242 to provide an exemption from sales and use tax and real property tax on the sale of residential wind energy equipment installed on residential property that uses wind energy to generate electricity for use in a residential structure on the property.

This Act takes effect July 1, 2009.

Senate Bill 554 - House bill 176 (Chapter 280, Acts of 2009)

This Act adds §9-1108 to the Environment Article to prohibit a person from installing, or having installed, on property a person owns in the State in the Chesapeake and Atlantic Coastal Bays Critical Area, an on-site sewage disposal system to service a newly constructed building, unless the on-site sewage disposal system utilizes nitrogen removal technology. The Act also prohibits a person from replacing or having replaced, an existing on-site sewage disposal system on property a person owns in the State in the Chesapeake and Atlantic Coastal Bays Critical Area, unless the replacement on-site sewage disposal system utilizes nitrogen removal technology. The Act defines "nitrogen removal technology" as the best available technology for nitrogen removal. The Act also defines "on-site sewage disposal system" as a sewage treatment unit, collection system, disposal area, and related appurtenances.

The Act provides that the Department of the Environment shall assist homeowners in paying the cost difference between a conventional on-site sewage disposal system and a system that utilizes nitrogen removal technology with money from the Bay Restoration Fund if sufficient funds are available. This must be done in accordance with §9-1605.2(h) of the Environment Article.

The Act also provides that a person who installs or replaces a system not utilizing nitrogen removal technology is subject to civil and administrative penalties and enforcement mechanisms provided in §§9-334 through 9-342 of the Environment Article. The penalties cannot exceed $8,000.

The Act also provides that the Department of the Environment must adopt regulations and that the regulations shall include provisions to ensure that appropriate management measures are provided for the operation and maintenance of nitrogen removal technology.

The Act also provides for a new subtraction modification, codified as Tax-General Article §10-208(q). An individual will be allowed a subtraction for the amount by which the cost difference between a conventional on-site sewage disposal system and a system that utilizes nitrogen removal technology exceeds the amount of assistance the individual receives from the Department of the Environment under §9-1108 of the Environment Article.

This Act takes effect October 1, 2009, but the subtraction modification in Tax-General Article §10-208(q) will be applicable to all taxable years beginning after December 31, 2009.

Senate Bill 552 (Chapter 277, Acts of 2009)

This Act requires the Comptroller to declare an amnesty period from September 1, 2009 to October 30, 2009, both inclusive, during which the Comptroller shall waive all civil penalties (except previously assessed fraud penalties) and one-half of the interest that would have been imposed on certain delinquent taxpayers for nonreporting of tax liability, underreporting of tax liability, and nonpayment of tax liability.

The waiver of civil penalties and interest under this amnesty program generally applies to a delinquent taxpayer who:

  1. on or before December 31, 2008, failed to file a return required or pay the tax imposed for individual income tax, corporate income tax, withholding tax, sales and use tax, or admissions and amusement tax; and
  2. during the tax amnesty period, files a delinquent return, pays the tax due under the return or has an agreement with the Comptroller to pay the tax due in accordance with the terms and schedules established in the agreement.

The Comptroller has the discretion as to whether the Comptroller is to enter into an agreement. The Comptroller further has the full discretion as to the terms and schedule for payment set forth under the agreement, provided that the delinquent tax under the agreement shall be paid in full on or before December 31, 2010. The waiver of civil penalties and interest under the agreement does not apply to interest accrued for periods after October 30, 2009. The waiver of civil penalties and interest under the agreement is void if the taxpayer fails to comply strictly with the terms and schedule for payment under the agreement.

This amnesty program does not apply to:

  • any taxpayer that, as of September 1, 2009, has more than 500 employees in the United States or is a member of a corporate group that has more than 500 employees in the United States;
  • any tax for which a taxpayer was granted amnesty under the 2001 Maryland tax amnesty program; or
  • any taxpayer who was eligible for the July 1, 2004, through November 1, 2004, Settlement Period, as provided in Chapter 557 of the Acts of 2004, regardless whether or not the taxpayer participated in the Settlement Period.

A taxpayer will not be charged with a criminal tax offense arising out of any return filed and tax paid during the amnesty period, except for:

  • any criminal charges pending in the courts of the State; or
  • any criminal charges under investigation by an office with the constitutional authority to prosecute a person for violation of criminal laws.

The Comptroller, on or before March 15, 2010, shall report to the Governor the revenues raised under this amnesty program.

This Act takes effect June 1, 2009.

Senate Bill 604 (Chapter 290, Acts of 2009)

This Act extends by one year the termination provision and dates of applicability of the tax credit that an employer may claim, pursuant to §10-704.7 of the Tax-General Article, for wages, child care and transportation expenses for qualified employees with disabilities The new termination date for this Qualifying Employees with Disability Tax Credit is June 30, 2010.

This Act takes effect on June 1, 2009.

Senate Bill 800 - House Bill 493 (Chapter 605, Acts of 2009)

These Acts were cross-filed bills and are identical. The Acts amend the Biotechnology Investment Incentive Tax Credit, found in §10-725 of the Tax-General Article. These Acts first clarify that a qualified investor includes both an individual and entity. Second, these Acts provide that a tax credit under this section must be claimed for the taxable year in which the investment in a qualified Maryland biotechnology company is made. Following this change, the Acts delete obsolete language from the statute regarding when the investor could redeem a final credit certificate.

The Acts change the language of the recapture found in §10-725(f) to conform with the timing of the credit. The language is changed from the taxable year in which the credit is approved to the taxable year for which the credit is claimed.

Finally, the Acts make a change to enacted Chapter 518 of the Acts of 2008. The Acts provide that Chapter 518 remains effective as of July 1, 2008, but removes the language that the Chapter applies to all taxable years after December 31, 2008. The Acts provide that for Chapter 518, a tax credit for an investment under §10-725 of the Tax-General Article as amended by these Acts shall be claimed for the taxable year in which the investments were made.

This Act takes effect July 1, 2009.

House Bill 101 (Chapter 487, Acts of 2009)

This Act contains multiple provisions related to balancing the State budget. There are a few provisions that directly impact the Comptroller.

This Act amends Tax-General Article §8-406(b)(2)(iv) to reduce the money appropriated for the Maryland-mined Coal tax credit. The total amount of credits approved by the State Department of Assessments and Taxation (the "Department") for a calendar year beginning after December 31, 2008, but before January 1, 2013 may not exceed $4,500,000. The total amount of credits approved by the Department for a calendar year beginning after December 31, 2012, but before January 1, 2015 may not exceed $6,000,000. The total amount of credits approved by the Department for a calendar year beginning after December 31, 2014, but before January 1, 2021 did not change and that amount may not exceed $3,000,000.

This Act amends Tax-General Article §10-210.1(b)(2) to provide that in addition to the modifications under §§10-204 through 10-210 of Subtitle 2, to determine the Maryland adjusted gross income of an individual, an amount is added to or subtracted from federal adjusted gross income to determine the net operating loss deduction allowed under §172 of the Internal Revenue Code without regard to an election under §172(b)(1)(H) of the Internal Revenue Code for a carryback period of up to five years.

The Act also adds Tax-General Article §10-210.1(b)(4) to provide that in addition to the modifications under §§10-204 through 10-210 of Subtitle 2, to determine the Maryland adjusted gross income of an individual, an amount is added to or subtracted from federal adjusted gross income to reflect the recognition of income from discharge of indebtedness and the allowance of any deduction with respect to original issue discount without regard to §108(i) of the Internal Revenue Code.

The provisions of §10-210.1(b) of the Tax-General Article as amended by this Act shall be applicable to any taxable year to which §108(i), §168(k), §172(b)(1)(H), or §179 of the Internal Revenue Code, as amended by the American Recovery and Reinvestment Act of 2009 (P.L. 111-5), apply.

The Act also provides that, notwithstanding the changes to §10-210.1(b)(2) of the Tax-General Article as enacted by this Act, the provisions of former §10-210.1(b)(2) of the Tax-General Article as in effect prior to the July 1, 2009 effective date of Section 2 of this Act shall continue to apply to net operating loss carryovers in the case of net operating losses for taxable years ending during 2001 or 2002, to which the provisions of former §172(b)(1)(H) as in effect prior to the amendment of that section by the American Recovery and Reinvestment Act of 2009 (P.L. 111-5) applied.

The Act provides in Section 24 of the Act that notwithstanding any other provision of law, §10-108(a) of the Tax-General Article does not apply to any amendment of the Internal Revenue Code that was enacted by the American Recovery and Reinvestment Act of 2009 ("ARRA") (P.L. 111-5). This provision means that Maryland's automatic decoupling provisions do not apply to any change included in the ARRA. This means that Maryland is coupled to any amendment of the Internal Revenue Code provided for in the ARRA unless Maryland has specifically decoupled from an amendment by statute. The effect of this provision is that Maryland is coupled with three provisions in the ARRA that would flow through to the Maryland tax calculation. Those three provisions are the federal Earned Income Credit (EIC) increase, the unemployment insurance benefits exclusion, and the sales and use tax deduction for new vehicle purchases.

The ARRA provides for an increase in the federal EIC for families with three or more children and for married individuals filing a joint return. Since Maryland's nonrefundable EIC is up to one-half the federal EIC, and the state's refundable EIC one quarter of the federal EIC, there will be an increased credit at the state level. This will increase the local refundable EIC as well. This increase is only valid for tax years 2009 and 2010. It sunsets at the end of the 2010 tax year.

The ARRA also excludes up to $2,400 of unemployment insurance benefits from federal adjusted gross income for tax year 2009. While this change would normally be automatically decoupled, it will not be due to the provision in this Act. It will flow through to the Maryland tax calculation.

Finally, the ARRA provides for a one-time deduction for the sales or excise tax paid on the purchase of a new vehicle, claimed as either as an addition to the federal standard deduction or as an itemized deduction. For taxpayers who claim the exemption as an additional federal standard deduction, the exemption will not flow through to Maryland tax. In addition, this provision will not affect taxpayers who already deduct the sales tax instead of state income taxes as an itemized deduction, since the sales tax paid on a car is already included in that deduction. A taxpayer, who normally takes the standard deduction at the federal and state level, may switch from the standard deduction to itemized deductions at the federal level in order to take advantage of this deduction at the state level. A taxpayer would have to itemize at the federal level to be able to itemize at the state level and receive the benefit of the deduction for sales or excise tax paid on the purchase of a new vehicle through this method.

The ARRA allows income recognized from the cancellation of debt (CODI) in 2009 and 2010 to be deferred for five years. However, House Bill 101 explicitly decouples Maryland income tax law from this change. Therefore, this amendment will not affect Maryland income tax calculations.

This Act takes effect June 1, 2009 (except for the changes to Tax-General Article §10-210.1(b) enacted by this Act, which take effect July 1, 2009) and Tax-General Article §8-406(b)(2)(iv) as enacted by this Act shall be applicable to all taxable years beginning after December 31, 2008.

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.

Senate Bill 621 (Chapter 574, Acts of 2009)

This Act expands the definition of "Solar energy equipment" in Tax-General Article §11-230(a)(3)(i) and Tax-Property Article 7-242(a) to include that the sales and use tax and real property tax does not apply to solar energy equipment that uses solar energy to generate electricity that is supplied to the electric grid.

This Act takes effect July 1, 2009.

House Bill 810 (Chapter 422, Acts of 2009)

This Act adds §10-824 to the Tax-General Article, which provides the mandatory requirements for filing income tax returns by electronic means. This Acts also adds Tax-General Article §13-717 to provide the circumstances under which penalty would apply for failure to comply with Tax-General Article §10-824.

This Act requires income tax return preparers who have prepared, for compensation, more than a certain number of qualified State income tax returns in the prior taxable year to file all qualified State income tax returns electronically. An income tax return preparer does not include a person who merely performs those acts described under Section 7701(a)(36)(B) of the Internal Revenue Code. A qualified State income tax return is any original return of individual income tax imposed by Title 10 of the Tax-General Article, regardless of whether a tax is due or a refund is claimed. For a taxable year beginning after December 31, 2008 but before January 1, 2010, a preparer who has prepared more than 300 qualified returns in the prior taxable year is required to file the returns electronically. For a taxable year beginning after December 31, 2009 but before January 1, 2011, it is more than 200 qualified returns in the prior taxable year. For any taxable year beginning after December 31, 2010, it is more than 100.

This Act authorizes the Comptroller to impose on a preparer a $50 penalty for each return that is not filed electronically in compliance with this Act, unless the preparer is able to show that the failure to comply is due to reasonable cause and not due to willful neglect. The total penalties assessed may not exceed $500 for all returns filed by the preparer in a taxable year. The penalty does not apply if a taxpayer does not want the taxpayer's return filed by electronic means or if the preparer has sought by written request, and received, a waiver from the Comptroller. The written waiver request must establish to the satisfaction of the Comptroller either reasonable cause for not filing returns by electronic means or undue hardship due to lack of feasible means to file returns electronically.

This Act takes effect July 1, 2009, and shall be applicable to all taxable years beginning after December 31, 2008.

House Bill 1505 (Chapter 477, Acts of 2010)

This Act authorizes the Central Collection Unit (CCU) in the Department of Budget and Management to certify to the Comptroller and the State Lottery Agency certain debts or claims owed to the State. This Act authorizes the Agency to follow certain procedures when a certain debtor wins a certain prize and authorizes prize interception by adding new subsection 3-304(a)(4) to the State Finance and Procurement Article.

The Act also adds new Section 3-307 to the State Finance and Procurement Article. Section 3-307 provides for procedures under which the Central Collection Unit may certify a debt to the Maryland State Lottery Agency.

The Act also amends Section 13-918 of the Tax-General Article to provide that the Comptroller shall honor interception requests from Central Collection Unit in fourth priority.

This Act takes effect July 1, 2010 and applies to every debt or claim owed to the State on or after this effective date.

Senate Bill 145 (Chapter 31, Acts of 2011)

This Act establishes personal liability for unpaid motor fuel tax, interest, and penalties for members of limited liability companies and partners of a limited liability partnership. Personal liability for the unpaid motor fuel taxes extends to any person who exercises direct control over the fiscal management of the company or partnership

Effective Date: This Act will take effect October 1, 2011.

Senate Bill 141 (Chapter 484, Acts of 2010)

This Act repeals the requirement that the Comptroller establish a tax add-on system that allows contributions to the Fair Campaign Financing Fund.

This Act was effective June 1, 2010.

This Act creates programs focused on creating, enhancing, supporting and revitalizing sustainable communities consistent with the Obama Administration's interagency partnership announced in June 2009.

This Act creates the Smart Growth Subcabinet (Subcabinet) in Section 9-1406 of the State Government Article. The Subcabinet shall work together to create, enhance, support, and revitalize sustainable communities across the State. The Subcabinet will make recommendations to the Department of Business and Economic Development, the Department of Housing and Community Development and the Department of Planning.

The Act makes changes to the Heritage Structure Rehabilitation Tax Credit found in Title 5A of the State Finance and Procurement Article. The Act replaces the word "heritage" with "historic" and amends the definition of "certified rehabilitation" to include a qualified rehabilitated structure as well as the existing certified historic structure.

The Act adds many new definitions such as Financial Assistance, High Performance Building, Historic Property, Main Street Maryland Community, Main Street Maryland Program, Qualified Rehabilitated Structure, and Smart Growth Subcabinet.

The Act amends the definition of "substantial rehabilitation" to mean rehabilitation of a structure for which qualified rehabilitation expenditures, during the 24-month period selected by the individual or entity ending with or within the taxable year, exceed:

  • $5,000 for the rehabilitation of a single-family, owner-occupied residential structure;
  • the greater of $25,000 or 50 percent of the adjusted basis for a qualified rehabilitated structure located in a Main Street Maryland Community; and
  • for all other property the greater of the adjusted basis or $25,000.

The Act requires the Director of the Maryland Historical Trust, in connection with the Smart Growth Subcabinet, to adopt regulations that establish procedures and standards for certifying structures and to establish an application process for initial credit certificates for Maryland Sustainable Communities Tax Credits. The application process shall favor the award of tax credits for rehabilitation projects that are located the areas as set forth in Section 5A-303(b)(1)(iv).

Not more than 10 percent of the total credit amounts under initial credit certificates in any fiscal year may be issued for the rehabilitation of qualified rehabilitation structures.

The Act provides that if a fee charged for a commercial rehabilitation is not received by the Trust within 120 days after the Trust sends notice that the fee is due, the initial credit certificate shall expire.

For a building to be a qualified rehabilitated structure, after rehabilitation:

  • 50 percent of the existing external walls must be remaining external walls;
  • 75 percent or more of the existing external walls must be external or internal walls; and
  • 75 percent or more of the existing internal framework must remain.

The Act provides that for the taxable year in which a certified rehabilitation is completed, an individual or business entity may claim a tax credit as follows:

  • an amount equal to 20 percent of the individual's or business entity's qualified rehabilitation expenditures for the rehabilitation;
  • an amount equal to 25 percent of the individual's or business entity's qualified rehabilitation expenditures for a rehabilitation that is a qualified historic structure and high performance building;
  • an amount equal to 10 percent of the individual's or business entity's qualified rehabilitation expenditures for the rehabilitation if the building is a qualified rehabilitated structure.

The Act provides that the Director may not issue any initial credit certificates for any fiscal year after fiscal year 2014. The Act also provides for recapture based on the structure and time disqualifying work was performed or the structure was disposed. Disposal means to transfer legal title and includes, but is not limited to, a sale, gift, or foreclosure.

This Act takes effect June 1, 2010.

Senate Bill 336 (Chapter 543, Acts of 2010)

This Act provides that the Commission must present its final report of findings and recommendations to the Governor on or before December 15, 2010.

This Act takes effect July 1, 2010.

Senate Bill 891 (Chapter 303, Acts of 2011)

For purposes of the One Maryland Economic Development Tax Credit, the Act amends Section 1-101 of the Economic Development Article to amend the definition of a "qualified distressed county" to provide that the definition includes a county that has met at least one of the criteria at some time during the preceding 24-month period.

Effective Date: This Act will take effect July 1, 2011.

Senate Bill 1081 (Chapter 650, Acts of 2010)

This Act provides that before a State agency issues a rebate or similar instrument or authorizes a rebate or similar instrument to be issued by a nongovernment entity to reduce the cost of a retail sale of household appliances under a program to promote energy efficiency, the State agency or nongovernment entity must require the buyer of a household appliance to certify that:

  • the household appliance was purchased at a retail sale in the State; or
  • the buyer paid the applicable State sales and use tax.

This Act takes effect July 1, 2010.

Senate Bill 237 and House Bill 203 (Chapters 509 and 510, Acts of 2010)

These Acts were cross-filed and provide a permanent sales and use tax exemption for veterans organizations organized under Section 501(c)(4) of the Internal Revenue Code.

These Acts take effect July 1, 2010.

House Bill 499 (Chapter 125, Acts of 2011)

This Act amends Section 4-103 of the Tax-General Article to provide that the admissions and amusement tax may not be imposed by a county or municipal corporation on gross receipts of a nontethered hot air balloon.

Effective Date: This Act will take effect July 1, 2011

 

This Act provides that, for fiscal years 2012 and 2013 only, a biotechnology company that has been in active business for up to 15 years can qualify as a biotechnology company and be eligible to receive investments for which the Biotechnology Investment Tax Credits can be awarded. Currently, a qualifying biotechnology company may not have been in active business for more than 10 years (or 12 years if the Department of Business and Economic Development determines that the company requires additional time to complete the process of regulatory approval).

Effective Date: This Act will take effect June 1, 2011, and shall be applicable to initial tax credit certificates issued for fiscal years beginning on or after July 1, 2011.

House Bill 601 (Chapter 133, Acts of 2011)

This Act expands the eligibility for the Sustainable Communities Tax Credit to allow the Maryland Historic Trust (MHT) to accept an application for a proposed commercial rehabilitation for which a substantial part of the proposed rehabilitation work has begun if the rehabilitation work has been approved under the federal historic tax credit.

Effective Date: This Act will take effect July 1, 2011.

Senate Bill 398 (Chapter 461, Acts of 2011) and House Bill 502 (Chapter 462, Acts of 2011)

These Acts expand the sales and use tax exemption for the sale of electricity for residential use. The Acts provide that the sales and use tax does not apply to the sale of electricity generated by solar energy equipment or residential wind energy equipment, as defined under Section 11-230 of the Tax-General Article, for use in residential property owned by an eligible customer-generator under Section 7-306 of the Public Utilities Article.

Effective Date: This Act will take effect July 1, 2011.

House Bill 632 (Chapter 352, Acts of 2011)

This Act requires the Comptroller to publish the maximum income eligibility for the State earned income tax credit (EIC) on or before January 1 of each calendar year. This Act also requires the Comptroller to notify all employers in Maryland by mail the information on the State EIC.

This notice must include the following statements, which each employer must provide electronically or in written form to each employee who may be eligible for the credit: (1) the employee may be eligible for the federal and State earned income tax credits; and (2) the employee may be eligible for the State earned income tax credit.

Effective Date: This Act will take effect January 1, 2012.

House Bill 72 (Chapter 397, Acts of 2011)

This Act prohibits the Motor Vehicle Administration (MVA) from renewing or transferring registration of a vehicle until the applicant has paid all undisputed taxes and unemployment insurance contributions payable to the Comptroller or the Secretary of Labor, Licensing, and Regulation (DLLR), in a manner satisfactory to the Comptroller or the Secretary of DLLR.

This Act prohibits the Motor Vehicle Administration (MVA) from renewing a driver's license until the applicant has paid all undisputed taxes and unemployment insurance contributions payable to the Comptroller or the Secretary of Labor, Licensing, and Regulation (DLLR), in a manner satisfactory to the Comptroller or the Secretary of DLLR.

MVA shall coordinate with the Comptroller and DLLR to develop procedures and adopt regulations to implement this new legislation.

Effective Date: This Act will take effect June 1, 2011.

House Bill 39 (Chapter 314, Acts of 2011)

This Act adds Worcester County to the list of Eastern Shore counties in which eligible nonprofit fraternal, religious, and war veterans' organizations may own and operate up to five slot machines at its principal meeting hall. At least one-half of the gross proceeds must go to charity and the remainder to further the purposes of the organization.

This Act also requires the Comptroller's Office to assume the responsibility to license and regulate slot machines operated by eligible organizations located in Eastern Shore counties. However, the Comptroller may not initiate any audit or reporting requirements until July 1, 2012.

Effective Date: This Act will take effect June 1, 2011.

This Act establishes the Job Creation and Recovery Tax Credit to encourage qualified employers conducting or operating a trade or business in Maryland to hire qualified employees for newly-created or certain vacant positions in the State. The amount of the tax credit is based on the number of employees hired and the number of months that they were employed during the tax credit period. An individual, corporation or organization exempt under Section 501(c) of the Internal Revenue Code may claim the credit.

Qualified employees must be Maryland residents hired between March 25, 2010 and December 31, 2010 to fill positions that are full-time, for 12 months or more, located in the State, and newly created or have been vacant for at least six months. At the time of hire, the individuals must be receiving unemployment insurance benefits or have exhausted their benefits in the previous 12 months and not working full-time immediately preceding the date of hire.

A qualified employer must be certified by the Department of Labor, Licensing, and Regulation to claim up to a total credit of $5,000 per qualified employee multiplied by the number of qualified employees hired, but not to exceed $250,000. The credit amount for each qualified employee is $5,000 for a 12-month period or $416.67 for each month that the qualified employee was in the position. A qualified employer must claim the credit on the employer's tax return for each calendar month of 2010 as that month corresponds to the qualified employer's taxable year. If the credit allowed in a year exceeds the total tax otherwise payable by the qualified employer for the taxable year, the employer may claim a refund for the excess.

This Act became effective March 25, 2010.

Senate Bill 513 (Chapter 241, Acts of 2011)

This Act amends §7-307 of the Tax-General Article by adding a new subsection which authorizes the Comptroller to grant an extension of the deferred payment period for payment of estate tax imposed on qualified agricultural property.

For decedents dying in 2011, Tax-General Article §7-307 currently directs the Comptroller to allow a payment deferral for up to 3 years from the due date, for Maryland estate tax imposed on qualified agricultural property that passes from the decedent to or for the use of a qualified recipient. If a payment deferral is allowed, the qualified recipient shall pay the deferred Maryland estate tax, without interest, in accordance with a payment schedule prescribed by the Comptroller over a 3 year period beginning in the 4th year after the due date.

This Act authorizes the Comptroller to grant an extension of the deferred payment period if the qualified recipient has a pending application to put the land on which the deferred estate tax is due under a permanent land conservation easement with the Maryland Agricultural Land Preservation Foundation, the Rural Legacy Board, or a similar easement purchase program.

Effective Date: This Act will take effect October 1, 2011, and shall be applicable to decedents dying after December 31, 2010.

This Act repeals the Film Production Rebate Program and creates the Film Production Activity Credit.

The Act defines most relevant terms, using the definitions contained in the former Subtitle 4 of the Economic Development Article. The Act defines "department" and "secretary" to be the Department of Business and Economic Development and its Secretary. The Act adds two more activities to what "film production activity" does not include. "Film production activity" does not include a video, computer, or social networking game or pornography. The Act defines pornography to mean any production for which records are required to be maintained under Section 2257 of Title 18, U.S.C. The Act also deletes the provision that "film production activity" does not include any other activity not necessary to or directly related to the making of a master film, tape, or image.

The definition for "total direct costs" provides that the costs are the total costs incurred in the State that are necessary to carry out the production activity. The Act expands the list of costs that are included in "total direct costs." These new additions include set construction and operation; wardrobe, makeup, and related services; editing and related services; travel; food and lodging, and legal and accounting services performed by attorneys or accountants licensed in Maryland.

The Act adds to the definition of "total direct costs" to provide that it does not include any salary, wages, or other compensation for personal services of an individual who receives more than $500,000 in salary, wages, or other compensation for personal services in connection with any film production activity.

In order to claim the credit, a film production entity must submit an application to DBED before beginning any film production activity. This application should describe the anticipated film production activity and must include a list provided for in §10-729(c)(2). To qualify as a film production entity for this credit, the estimated total direct costs incurred in the State must exceed $500,000.

After receiving the application, the Secretary shall determine if the entity qualifies for the credit under this section and then must notify the Comptroller of the estimated amount of total direct costs and taxable year the credit will be claimed. After the production activity is completed, the entity must apply to DBED for a tax credit certificate on the form required by DBED and include required information. The Secretary shall determine the total direct costs that qualify for the tax credit and issue a tax credit certificate. The tax credit certificate for a television series will be issued for 27% of the total direct costs that qualify. For all other activities, the tax credit certificate will be issued for 25% of the total direct costs that qualify for the tax credit. The Secretary must then notify the Comptroller of the amount of the tax credit certificate issued under this subsection.

The tax credit is capped at $7,500,000 for each fiscal year and the Secretary may not issue credit certificates exceeding this amount in the aggregate. However, if the Secretary issues less than the cap in any fiscal year, the excess amount may be carried forward and issued under tax credit certificates in a subsequent fiscal year.

The Act provides that a qualified film production entity may claim a tax credit against State income tax for film production activities in the state in an amount equal to the amount in the final tax credit certificate approved by the Secretary. The Act provides that this credit is refundable if the tax credit allowed exceeds the total tax otherwise payable by a qualified film production entity for that taxable year.

Effective Date: This Act shall take effect July 1, 2011 and be applicable to all taxable years beginning after December 31, 2010. This Act shall abrogate on July 1, 2014 without any further action required by the General Assembly.

House Bill 855 (Chapter 706, Acts of 2010)

This Act exempts from the State sales and use tax the sale of a right to occupy a room or lodgings as a transient guest at a dormitory or other lodging facility that:

  • is operated solely in support of a corporate or any other headquarters, training, conference, or awards facility campus;
  • provides lodging solely for employees, contractors, vendors, and other invitees of the corporation that owns the dormitory or lodging facility; and
  • does not offer lodging services to the general public.

This Act takes effect July 1, 2010.

This Act expands the sales and use tax exemption for sales of food by nonprofit food vendors at a youth sporting event or 4-H event for individuals under 18 years old if there are no facilities for food consumption on the premises, unless the sale is within an enclosure where a charge is made for admission. The exemption includes sales of food, bottled water, soft drinks or carbonated beverages, or candy or confectionary.

Effective Date: This Act will take effect July 1, 2011.

These Acts were cross-filed and provide that the State Board of Individual Tax Preparers shall give the examination prepared by the Internal Revenue Service or an equivalent examination by an independent national or state regulatory authority as determined by the Board.

These Acts take effect July 1, 2010

House Bill 464 (Chapter 493, Acts of 2010)

This Act extends the termination date of the Maryland Clean Energy Incentive Tax Credit under Section 10-720 of the Tax-General Article by five years to December 31, 2015. A qualified Maryland facility must begin producing qualified energy on or after January 1, 2006, but before January 1, 2016, in order to claim the credit.

This Act further provides that in each of the tax years for which the credit may be claimed, the credit is now refundable if the credit allowed for the taxable year exceeds the State income tax.

The Maryland Energy Administration may no longer issue initial credit certificates for amounts less than $1,000.

This Act takes effect July 1, 2010.

House Bill 1196 (Chapter 383, Acts of 2011)

This Act makes several changes to the Sustainable Communities Tax Credit program. This was a departmental bill introduced by the Maryland Department of Planning. The Act amends Section 5A-303 of the State Finance and Procurement Article.

The Act clarifies that the tax credits for high-performance buildings and certified rehabilitation structures apply to commercial rehabilitations only.

The Act increases the fee that the Maryland Historic Trust (MHT) can charge for certifying these structures from 1% to 3%. The Act also provides that if the fees paid in any fiscal year are less than the directly related administrative costs of operating the tax credit program, the funds in the reserve fund shall be used for the directly related administrative costs of the program. The Act further provides for how the fees are to be used and funds are to be estimated. The Act also expands MHT's reporting requirement to the Governor.

Effective Date: This Act will take effect July 1, 2011.

These Acts establish a check-off elective on the Maryland individual income tax returns to give taxpayers an option to contribute to the Waiting List Equity Fund which is administered by the Department of Health and Mental Hygiene to provide certain community-based services for individuals with developmental disabilities. The check-off elective shall be designed to allow each spouse on a joint return to separately designate the spouse's contribution. The contribution will first be deducted from the amount of refund that the taxpayer is to receive, if any, and then added to the amount of tax liability that the taxpayer owes.

These Acts take effect July 1, 2010, and shall be applicable to taxable years beginning after December 31, 2009.

House Bill 443 (Chapter 674, Acts of 2010)

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.

Senate Bill 830 (Chapter 558, Acts of 2011)

The Act extends, by one year, to June 30, 2012, the termination date of the Qualifying Employees with Disabilities Tax Credit under § 10-704.7 of the Tax-General Article, for employees hired on or after October 1, 1997 but before July 1, 2012.

Effective Date: The Act will take effect June 1, 2011.

The Act expands the Quality Teacher Incentive Credit to allow teachers at a state or local correctional facility or a juvenile facility listed in Section 9-226 of the Human Services Article to claim the credit that was originally only allowed for public school teachers.

The Act allows an individual who is a teacher at a state or local correctional facility or a juvenile facility listed in Section 9-226 of the Human Services Article to qualify for the credit if they meet the same criteria that applied for teachers who are employed by a county board of education and teach in a public school.

Tax-General Article, Section 10-717 provides that an individual who is a classroom teacher holding a standard professional certificate or an advanced professional certificate may claim a credit against the State income tax for up to $1,500 of tuition paid by the individual during the taxable year for graduate level courses required to maintain certification if the individual:

  1. successfully completes the courses with a grade of B or better;
  2. is employed by a county board of education;
  3. teaches in a public school and receives a satisfactory performance evaluation for that teaching; and
  4. has not been reimbursed by the county for the tuition paid.

Effective Date: This Act shall take effect July 1, 2011 and be applicable to all taxable years after December 31, 20

House Bill 121 (Chapter 393, Acts of 2010)

This Act adds new Section 16-210(b)(3) to the Criminal Procedure Article. This Act authorizes the Office of the Public Defender to submit requests to the Comptroller and the Department of Labor, Licensing, and Regulation for information regarding the income and employment status of applicants for services of the Office relating to eligibility for services.

Each request must be accompanied by an authorization for release of information in a format acceptable to the agency to which the request is submitted and signed by the applicant. Requests and responses may be exchanged via facsimile transmission.

This Act will take effect October 1, 2010.

These Acts repeal the direct wine seller's permit and establish a direct wine shipper's permit and a common carrier permit to be issued by the Comptroller.

A person permitted as a direct wine shipper may engage in shipping wine directly to a resident in the State, for wines ordered or purchased for personal consumption through a computer network. To qualify, the applicant must be (1) a person licensed outside of the State to engage in the manufacture of wine; or (2) a holder of a Class 3 or Class 4 manufacturer's license.

A direct wine shipper must ship by a common carrier holding a common carrier permit. A direct wine shipper must ensure that all containers of wine shipped directly to a consumer in the State are conspicuously labeled with: (1) the name of the direct wine shipper; (2) the name and address of the consumer who is the intended recipient; and (3) the words "Contains Alcohol: Signature of Person at Least 21 Years of Age Required for Delivery." To complete delivery, the common carrier must require the signature of the consumer or another individual at the address, and the government-issued photo ID showing that the individual is at least 21 years old. A direct wine shipper is prohibited from shipping more than 18 9-liter cases of wine annually to a single delivery address or delivering wine on Sunday to an address in the State.

A direct wine shipper must also (1) report quarterly to the Comptroller's Office the total amount of wine, by type, shipped in the State, the price charged, and the name and address of each purchaser; (2) file a quarterly alcoholic beverage tax return; (3) pay quarterly to the Comptroller's Office all sales and excise taxes due on sales to personal consumers in the State, calculating the amount of the taxes as if the sale was made in the State; (4) maintain for three years complete and accurate records of all information needed to verify compliance; (5) allow the Comptroller's Office to audit the direct wine shipper's records on request; and (6) consent to the jurisdiction of the Comptroller's Office or other State unit and the State courts concerning enforcement.

The initial and renewal fee for the direct wine shipper permit is $200; and for the common carrier permit fee, $100. The permits have a term of one year that begins on July 1.

The Comptroller must submit a specified report on the impact of direct wine shipping by December 31, 2012.

Effective Date: The Acts will take effect July 1, 2011.

Senate Bill 958 (Chapter 565, Acts of 2011)

The Act expands the energy resources that can qualify for the Maryland clean energy incentive tax credit by allowing any nonhazardous waste material that is segregated from other waste materials to qualify as a qualified energy resource. Currently, the Maryland Energy Administration (MEA) can only approve facilities that use waste materials that are solid and cellulosic.

Effective Date: The Act will take effect July 1, 2011.

Senate Bill 346 and House Bill 11 (Chapters 221 and 222 Acts of 2011)

The Acts expand the scope of the Honorable Louis L. Goldstein Volunteer Police, Fire, Rescue and Emergency Medical Services Personnel Subtraction Modification Program under § 10-208(i-1) of the Tax-General Article, to include active members of the Maryland Defense Force, who may qualify for an income subtraction modification of $3,500.

Effective Date: The Acts will take effect July 1, 2011, and shall be applicable to taxable years beginning after December 31, 2011.

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.

Senate Bill 959 (Chapter 566, Acts of 2011)

The Act expands the credit for bio-heating oil and extends the termination dates for the credit. The Act amends Section 10-727(a)(3) to provide that bio-heating oil means a heating oil derived from the U.S. Environmental Protection Agency approved feedstocks, or accepted under 42 U.S.C. 7545(O) as per the U.S. EPA Renewable Fuel Standard 2 (RFS2) and the accompanying regulations under 40 C.F.R. Part 80 for diesel fuel replacement.

The Act further extends the credit until December 31, 2017. The credit now abrogates without further action on June 30, 2018.

Effective Date: This Act shall take effect June 1, 2011, and is applicable to all tax years 2008 through 2017.

This Act creates Subtitle 38 of the Commercial Law Article to provide for new refund anticipation loan and refund anticipation check requirements for individual tax preparers.

This Act requires any facilitator of refund anticipation loans and checks to comply with the requirements of this section. If a facilitator fails to comply with the requirements, they are prohibited from soliciting the execution of, processing, receiving or accepting an application or agreement for a refund anticipation loan or check or facilitating the making of such a loan or check.

The Act defines facilitator as a person who, individually or in conjunction or cooperation with another person, processes, receives, or accepts an application or agreement for a refund anticipation loan or refund anticipation check, services or collects on a refund anticipation loan or refund anticipation check, or facilitates the making of a refund anticipation loan or refund anticipation check. A facilitator does not include certain financial institutions such as a bank, savings and loan association or credit union; an affiliate or subsidiary of a bank, savings and loan association, or credit union that, in connection with refund anticipation loans or refund anticipation checks acts solely as a servicer for the financial institution with which it is affiliated or of which it is a subsidiary; or a person who acts solely as an intermediary and does not interact with the public in the making of a refund anticipation loan or refund anticipation check.

The Act defines a "refund anticipation loan" as:

  • a loan arranged to be paid directly or indirectly from the proceeds of a consumer's tax refund; and
  • includes the sale, assignment, or purchase of a consumer's tax refund at a discount or for a fee, whether or not the consumer must repay the buyer or assignee if the Internal Revenue Service denies or reduces the consumer's tax refund.

This Act requires a facilitator to display certain disclosures. The Act provides that a facilitator must display a schedule of fees charged for facilitating refund anticipation loans and checks along with interest rates charged for certain loan and check amounts.

The Act also provides that a facilitator must display a notice that explains to consumers that a refund anticipation loan or check is a loan against their income tax refund. The notice also explains that a consumer may receive their refund in the normal course and direct deposited into their account without paying for a loan or other product. The Act provides that this notice must be at least 14 point type on a sign not less than 16 x 20 inches. The Act also provides that a facilitator may not charge any fee other than those disclosed on the schedules.

The Act provides that if a consumer does apply through a facilitator for a refund anticipation loan, the facilitator must disclose on a separate form, the fee, applicable interest rate percentage, the time in which the loan will be paid, and the notice as mentioned above. For a refund anticipation check, the notice is very similar but tailored to the check process.

The Act provides that the disclosures must be provided in English and the language in which the facilitator and consumer orally communicate. Under the Act, a facilitator may not require a consumer to enter into a refund anticipation loan in order to complete a tax return among other prohibitions. This subsection does not preclude a facilitator from charging a fee to complete an income tax return.

The Act provides for multiple violations and penalties that a facilitator will face including violations under Title 13 of the Commercial Law Article and actual and consequential damages.

This Act will take effect October 1, 2010.

House Bill 1375 (Chapter 734, Acts of 2010)

This Act extends the Kids First Act of 2008 (Ch. 692, Acts of 2008) by three years through 2012.

This Act adds a new provision to require the Comptroller and the Secretary of Health and Mental Hygiene to enter into an interagency agreement that allows the sharing of information from the income tax return of a taxpayer for the sole purpose of identifying children who may be eligible for the Maryland Medical Assistance Program or the Maryland Children's Health Program, and enrolling eligible children in these programs. However, the Act prohibits the Comptroller from sharing information if a taxpayer fails to opt-in to the information sharing. This limited exception to the Comptroller's requirement to keep tax information confidential is further subject to the federal Children's Health Insurance Program Reauthorization Act of 2009.

This Act takes effect July 1, 2010.

Senate Bill 221 (Chapter 252, Acts of 2010)

This Act extends the termination date of the Maryland Tax Credits for Qualifying Employees with Disabilities under Section 21-309 of the Education Article and Section 10-704.7 of the Tax-General Article by one year to June 30, 2011. The tax credit is applicable to all taxable years beginning after December 31, 1996 but before January 1, 2014, for qualified employees hired on or after October 1, 1997 but before July 1, 2011. Excess tax credits may be carried forward and applied as a credit for taxable years beginning on or after January 1, 2014.

This Act was effective June 1, 2010.

This Act creates a new tax credit for electric vehicle recharging equipment. The Maryland Energy Administration (MEA) will administer the tax credit. An individual or a corporation that receives an initial credit certificate from MEA may claim a credit in the amount equal to 20% of the cost of any qualified electric vehicle recharging equipment placed in service by the taxpayer during the taxable year in which they are claiming the credit.

The Act provides that "qualified electric vehicle recharging equipment" means property used for the recharging of motor vehicles propelled by electricity that meets the definition of "qualified alternative fuel vehicle refueling property" in § 30C of the Internal Revenue Code.

The Act provides that the credit cannot exceed the lesser of $400 for each individual recharging system or the State income tax for that taxable year. This credit cannot be carried over to any other taxable year.

The Act provides for the application process with MEA and the annual limits for amounts of the credit certificates that MEA may issue for each year. The Act also provides that on January 1, 2012, and each year authorized, MEA must provide to the Comptroller a list of all taxpayers in the prior tax year that have been issued an initial credit certificate and the maximum credit allowed for each taxpayer.

Effective Date: This Act shall take effect July 1, 2011, and is applicable to all tax years 2011 through 2013.

Senate Bill 145 (Chapter 31, Acts of 2011)

This Act establishes personal liability for unpaid motor fuel tax, interest, and penalties for members of limited liability companies and partners of a limited liability partnership. Personal liability for the unpaid motor fuel taxes extends to any person who exercises direct control over the fiscal management of the company or partnership

Effective Date: This Act will take effect October 1, 2011.

Senate Bill 891 (Chapter 303, Acts of 2011)

For purposes of the One Maryland Economic Development Tax Credit, the Act amends Section 1-101 of the Economic Development Article to amend the definition of a "qualified distressed county" to provide that the definition includes a county that has met at least one of the criteria at some time during the preceding 24-month period.

Effective Date: This Act will take effect July 1, 2011.

House Bill 499 (Chapter 125, Acts of 2011)

This Act amends Section 4-103 of the Tax-General Article to provide that the admissions and amusement tax may not be imposed by a county or municipal corporation on gross receipts of a nontethered hot air balloon.

Effective Date: This Act will take effect July 1, 2011

 

This Act provides that, for fiscal years 2012 and 2013 only, a biotechnology company that has been in active business for up to 15 years can qualify as a biotechnology company and be eligible to receive investments for which the Biotechnology Investment Tax Credits can be awarded. Currently, a qualifying biotechnology company may not have been in active business for more than 10 years (or 12 years if the Department of Business and Economic Development determines that the company requires additional time to complete the process of regulatory approval).

Effective Date: This Act will take effect June 1, 2011, and shall be applicable to initial tax credit certificates issued for fiscal years beginning on or after July 1, 2011.

House Bill 601 (Chapter 133, Acts of 2011)

This Act expands the eligibility for the Sustainable Communities Tax Credit to allow the Maryland Historic Trust (MHT) to accept an application for a proposed commercial rehabilitation for which a substantial part of the proposed rehabilitation work has begun if the rehabilitation work has been approved under the federal historic tax credit.

Effective Date: This Act will take effect July 1, 2011.

Senate Bill 398 (Chapter 461, Acts of 2011) and House Bill 502 (Chapter 462, Acts of 2011)

These Acts expand the sales and use tax exemption for the sale of electricity for residential use. The Acts provide that the sales and use tax does not apply to the sale of electricity generated by solar energy equipment or residential wind energy equipment, as defined under Section 11-230 of the Tax-General Article, for use in residential property owned by an eligible customer-generator under Section 7-306 of the Public Utilities Article.

Effective Date: This Act will take effect July 1, 2011.

House Bill 632 (Chapter 352, Acts of 2011)

This Act requires the Comptroller to publish the maximum income eligibility for the State earned income tax credit (EIC) on or before January 1 of each calendar year. This Act also requires the Comptroller to notify all employers in Maryland by mail the information on the State EIC.

This notice must include the following statements, which each employer must provide electronically or in written form to each employee who may be eligible for the credit: (1) the employee may be eligible for the federal and State earned income tax credits; and (2) the employee may be eligible for the State earned income tax credit.

Effective Date: This Act will take effect January 1, 2012.

House Bill 72 (Chapter 397, Acts of 2011)

This Act prohibits the Motor Vehicle Administration (MVA) from renewing or transferring registration of a vehicle until the applicant has paid all undisputed taxes and unemployment insurance contributions payable to the Comptroller or the Secretary of Labor, Licensing, and Regulation (DLLR), in a manner satisfactory to the Comptroller or the Secretary of DLLR.

This Act prohibits the Motor Vehicle Administration (MVA) from renewing a driver's license until the applicant has paid all undisputed taxes and unemployment insurance contributions payable to the Comptroller or the Secretary of Labor, Licensing, and Regulation (DLLR), in a manner satisfactory to the Comptroller or the Secretary of DLLR.

MVA shall coordinate with the Comptroller and DLLR to develop procedures and adopt regulations to implement this new legislation.

Effective Date: This Act will take effect June 1, 2011.

House Bill 39 (Chapter 314, Acts of 2011)

This Act adds Worcester County to the list of Eastern Shore counties in which eligible nonprofit fraternal, religious, and war veterans' organizations may own and operate up to five slot machines at its principal meeting hall. At least one-half of the gross proceeds must go to charity and the remainder to further the purposes of the organization.

This Act also requires the Comptroller's Office to assume the responsibility to license and regulate slot machines operated by eligible organizations located in Eastern Shore counties. However, the Comptroller may not initiate any audit or reporting requirements until July 1, 2012.

Effective Date: This Act will take effect June 1, 2011.

Senate Bill 513 (Chapter 241, Acts of 2011)

This Act amends §7-307 of the Tax-General Article by adding a new subsection which authorizes the Comptroller to grant an extension of the deferred payment period for payment of estate tax imposed on qualified agricultural property.

For decedents dying in 2011, Tax-General Article §7-307 currently directs the Comptroller to allow a payment deferral for up to 3 years from the due date, for Maryland estate tax imposed on qualified agricultural property that passes from the decedent to or for the use of a qualified recipient. If a payment deferral is allowed, the qualified recipient shall pay the deferred Maryland estate tax, without interest, in accordance with a payment schedule prescribed by the Comptroller over a 3 year period beginning in the 4th year after the due date.

This Act authorizes the Comptroller to grant an extension of the deferred payment period if the qualified recipient has a pending application to put the land on which the deferred estate tax is due under a permanent land conservation easement with the Maryland Agricultural Land Preservation Foundation, the Rural Legacy Board, or a similar easement purchase program.

Effective Date: This Act will take effect October 1, 2011, and shall be applicable to decedents dying after December 31, 2010.

This Act repeals the Film Production Rebate Program and creates the Film Production Activity Credit.

The Act defines most relevant terms, using the definitions contained in the former Subtitle 4 of the Economic Development Article. The Act defines "department" and "secretary" to be the Department of Business and Economic Development and its Secretary. The Act adds two more activities to what "film production activity" does not include. "Film production activity" does not include a video, computer, or social networking game or pornography. The Act defines pornography to mean any production for which records are required to be maintained under Section 2257 of Title 18, U.S.C. The Act also deletes the provision that "film production activity" does not include any other activity not necessary to or directly related to the making of a master film, tape, or image.

The definition for "total direct costs" provides that the costs are the total costs incurred in the State that are necessary to carry out the production activity. The Act expands the list of costs that are included in "total direct costs." These new additions include set construction and operation; wardrobe, makeup, and related services; editing and related services; travel; food and lodging, and legal and accounting services performed by attorneys or accountants licensed in Maryland.

The Act adds to the definition of "total direct costs" to provide that it does not include any salary, wages, or other compensation for personal services of an individual who receives more than $500,000 in salary, wages, or other compensation for personal services in connection with any film production activity.

In order to claim the credit, a film production entity must submit an application to DBED before beginning any film production activity. This application should describe the anticipated film production activity and must include a list provided for in §10-729(c)(2). To qualify as a film production entity for this credit, the estimated total direct costs incurred in the State must exceed $500,000.

After receiving the application, the Secretary shall determine if the entity qualifies for the credit under this section and then must notify the Comptroller of the estimated amount of total direct costs and taxable year the credit will be claimed. After the production activity is completed, the entity must apply to DBED for a tax credit certificate on the form required by DBED and include required information. The Secretary shall determine the total direct costs that qualify for the tax credit and issue a tax credit certificate. The tax credit certificate for a television series will be issued for 27% of the total direct costs that qualify. For all other activities, the tax credit certificate will be issued for 25% of the total direct costs that qualify for the tax credit. The Secretary must then notify the Comptroller of the amount of the tax credit certificate issued under this subsection.

The tax credit is capped at $7,500,000 for each fiscal year and the Secretary may not issue credit certificates exceeding this amount in the aggregate. However, if the Secretary issues less than the cap in any fiscal year, the excess amount may be carried forward and issued under tax credit certificates in a subsequent fiscal year.

The Act provides that a qualified film production entity may claim a tax credit against State income tax for film production activities in the state in an amount equal to the amount in the final tax credit certificate approved by the Secretary. The Act provides that this credit is refundable if the tax credit allowed exceeds the total tax otherwise payable by a qualified film production entity for that taxable year.

Effective Date: This Act shall take effect July 1, 2011 and be applicable to all taxable years beginning after December 31, 2010. This Act shall abrogate on July 1, 2014 without any further action required by the General Assembly.

This Act expands the sales and use tax exemption for sales of food by nonprofit food vendors at a youth sporting event or 4-H event for individuals under 18 years old if there are no facilities for food consumption on the premises, unless the sale is within an enclosure where a charge is made for admission. The exemption includes sales of food, bottled water, soft drinks or carbonated beverages, or candy or confectionary.

Effective Date: This Act will take effect July 1, 2011.

House Bill 1196 (Chapter 383, Acts of 2011)

This Act makes several changes to the Sustainable Communities Tax Credit program. This was a departmental bill introduced by the Maryland Department of Planning. The Act amends Section 5A-303 of the State Finance and Procurement Article.

The Act clarifies that the tax credits for high-performance buildings and certified rehabilitation structures apply to commercial rehabilitations only.

The Act increases the fee that the Maryland Historic Trust (MHT) can charge for certifying these structures from 1% to 3%. The Act also provides that if the fees paid in any fiscal year are less than the directly related administrative costs of operating the tax credit program, the funds in the reserve fund shall be used for the directly related administrative costs of the program. The Act further provides for how the fees are to be used and funds are to be estimated. The Act also expands MHT's reporting requirement to the Governor.

Effective Date: This Act will take effect July 1, 2011.

House Bill 1196 (Chapter 383, Acts of 2011)

This Act makes several changes to the Sustainable Communities Tax Credit program. This was a departmental bill introduced by the Maryland Department of Planning. The Act amends Section 5A-303 of the State Finance and Procurement Article.

The Act clarifies that the tax credits for high-performance buildings and certified rehabilitation structures apply to commercial rehabilitations only.

The Act increases the fee that the Maryland Historic Trust (MHT) can charge for certifying these structures from 1% to 3%. The Act also provides that if the fees paid in any fiscal year are less than the directly related administrative costs of operating the tax credit program, the funds in the reserve fund shall be used for the directly related administrative costs of the program. The Act further provides for how the fees are to be used and funds are to be estimated. The Act also expands MHT's reporting requirement to the Governor.

Effective Date: This Act will take effect July 1, 2011.

Senate Bill 830 (Chapter 558, Acts of 2011)

The Act extends, by one year, to June 30, 2012, the termination date of the Qualifying Employees with Disabilities Tax Credit under § 10-704.7 of the Tax-General Article, for employees hired on or after October 1, 1997 but before July 1, 2012.

Effective Date: The Act will take effect June 1, 2011.

The Act expands the Quality Teacher Incentive Credit to allow teachers at a state or local correctional facility or a juvenile facility listed in Section 9-226 of the Human Services Article to claim the credit that was originally only allowed for public school teachers.

The Act allows an individual who is a teacher at a state or local correctional facility or a juvenile facility listed in Section 9-226 of the Human Services Article to qualify for the credit if they meet the same criteria that applied for teachers who are employed by a county board of education and teach in a public school.

Tax-General Article, Section 10-717 provides that an individual who is a classroom teacher holding a standard professional certificate or an advanced professional certificate may claim a credit against the State income tax for up to $1,500 of tuition paid by the individual during the taxable year for graduate level courses required to maintain certification if the individual:

  1. successfully completes the courses with a grade of B or better;
  2. is employed by a county board of education;
  3. teaches in a public school and receives a satisfactory performance evaluation for that teaching; and
  4. has not been reimbursed by the county for the tuition paid.

Effective Date: This Act shall take effect July 1, 2011 and be applicable to all taxable years after December 31, 20

These Acts repeal the direct wine seller's permit and establish a direct wine shipper's permit and a common carrier permit to be issued by the Comptroller.

A person permitted as a direct wine shipper may engage in shipping wine directly to a resident in the State, for wines ordered or purchased for personal consumption through a computer network. To qualify, the applicant must be (1) a person licensed outside of the State to engage in the manufacture of wine; or (2) a holder of a Class 3 or Class 4 manufacturer's license.

A direct wine shipper must ship by a common carrier holding a common carrier permit. A direct wine shipper must ensure that all containers of wine shipped directly to a consumer in the State are conspicuously labeled with: (1) the name of the direct wine shipper; (2) the name and address of the consumer who is the intended recipient; and (3) the words "Contains Alcohol: Signature of Person at Least 21 Years of Age Required for Delivery." To complete delivery, the common carrier must require the signature of the consumer or another individual at the address, and the government-issued photo ID showing that the individual is at least 21 years old. A direct wine shipper is prohibited from shipping more than 18 9-liter cases of wine annually to a single delivery address or delivering wine on Sunday to an address in the State.

A direct wine shipper must also (1) report quarterly to the Comptroller's Office the total amount of wine, by type, shipped in the State, the price charged, and the name and address of each purchaser; (2) file a quarterly alcoholic beverage tax return; (3) pay quarterly to the Comptroller's Office all sales and excise taxes due on sales to personal consumers in the State, calculating the amount of the taxes as if the sale was made in the State; (4) maintain for three years complete and accurate records of all information needed to verify compliance; (5) allow the Comptroller's Office to audit the direct wine shipper's records on request; and (6) consent to the jurisdiction of the Comptroller's Office or other State unit and the State courts concerning enforcement.

The initial and renewal fee for the direct wine shipper permit is $200; and for the common carrier permit fee, $100. The permits have a term of one year that begins on July 1.

The Comptroller must submit a specified report on the impact of direct wine shipping by December 31, 2012.

Effective Date: The Acts will take effect July 1, 2011.

Senate Bill 958 (Chapter 565, Acts of 2011)

The Act expands the energy resources that can qualify for the Maryland clean energy incentive tax credit by allowing any nonhazardous waste material that is segregated from other waste materials to qualify as a qualified energy resource. Currently, the Maryland Energy Administration (MEA) can only approve facilities that use waste materials that are solid and cellulosic.

Effective Date: The Act will take effect July 1, 2011.

Senate Bill 958 (Chapter 565, Acts of 2011)

The Act expands the energy resources that can qualify for the Maryland clean energy incentive tax credit by allowing any nonhazardous waste material that is segregated from other waste materials to qualify as a qualified energy resource. Currently, the Maryland Energy Administration (MEA) can only approve facilities that use waste materials that are solid and cellulosic.

Effective Date: The Act will take effect July 1, 2011.

Senate Bill 346 and House Bill 11 (Chapters 221 and 222 Acts of 2011)

The Acts expand the scope of the Honorable Louis L. Goldstein Volunteer Police, Fire, Rescue and Emergency Medical Services Personnel Subtraction Modification Program under § 10-208(i-1) of the Tax-General Article, to include active members of the Maryland Defense Force, who may qualify for an income subtraction modification of $3,500.

Effective Date: The Acts will take effect July 1, 2011, and shall be applicable to taxable years beginning after December 31, 2011.

Senate Bill 959 (Chapter 566, Acts of 2011)

The Act expands the credit for bio-heating oil and extends the termination dates for the credit. The Act amends Section 10-727(a)(3) to provide that bio-heating oil means a heating oil derived from the U.S. Environmental Protection Agency approved feedstocks, or accepted under 42 U.S.C. 7545(O) as per the U.S. EPA Renewable Fuel Standard 2 (RFS2) and the accompanying regulations under 40 C.F.R. Part 80 for diesel fuel replacement.

The Act further extends the credit until December 31, 2017. The credit now abrogates without further action on June 30, 2018.

Effective Date: This Act shall take effect June 1, 2011, and is applicable to all tax years 2008 through 2017.

This Act creates a new tax credit for electric vehicle recharging equipment. The Maryland Energy Administration (MEA) will administer the tax credit. An individual or a corporation that receives an initial credit certificate from MEA may claim a credit in the amount equal to 20% of the cost of any qualified electric vehicle recharging equipment placed in service by the taxpayer during the taxable year in which they are claiming the credit.

The Act provides that "qualified electric vehicle recharging equipment" means property used for the recharging of motor vehicles propelled by electricity that meets the definition of "qualified alternative fuel vehicle refueling property" in § 30C of the Internal Revenue Code.

The Act provides that the credit cannot exceed the lesser of $400 for each individual recharging system or the State income tax for that taxable year. This credit cannot be carried over to any other taxable year.

The Act provides for the application process with MEA and the annual limits for amounts of the credit certificates that MEA may issue for each year. The Act also provides that on January 1, 2012, and each year authorized, MEA must provide to the Comptroller a list of all taxpayers in the prior tax year that have been issued an initial credit certificate and the maximum credit allowed for each taxpayer.

Effective Date: This Act shall take effect July 1, 2011, and is applicable to all tax years 2011 through 2013.

Bill Number Chapter (Acts of 2012) Bill Title
Senate Bill 8 Chapter 451 Maryland Income Tax Refund - Anne Arundel County - Warrants
Senate Bill 234 Chapter 3 Maryland Health Improvement and Disparities Reduction Act of 2012
Senate Bill 1086/ House Bill 1456 Chapter 344/ Chapter 345 Electronic Filing Requirements
Senate Bill 1302/ House Bill 1802 Chapter 2 (Special Session 1) State and Local Revenue Financing Act of 2012
House Bill 438 Chapter 2 Civil Marriage Protection Act