EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*sb0724*
SENATE BILL 724
Q8 2lr2787
CF HB 795
By: Senator King
Introduced and read first time: February 7, 2022
Assigned to: Budget and Taxation
A BILL ENTITLED
AN ACT concerning 1
Gross Receipts Tax on Short–Term Lease or Rental of Heavy Equipment 2
– Alterations 3
FOR the purpose of exempting governments from the tax on gross receipts from the 4
short–term lease or rental of heavy equipment property; repealing a requirement 5
that a person with gross receipts subject to tax to report certain information to the 6
county or municipal corporation where the heavy equipment rental business is 7
located; and generally relating to the taxation of short–term leases and rentals of 8
heavy equipment. 9
BY repealing and reenacting, with amendments, 10
Article – Local Government 11
Section 20–609 12
Annotated Code of Maryland 13
(2013 Volume and 2021 Supplement) 14
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 15
That the Laws of Maryland read as follows: 16
Article – Local Government 17
20–609. 18
(a) (1) In this section the following words have the meanings indicated. 19
[(2) “Gross receipts shortage” means the amount by which the property tax 20
calculated under subsection (e)(2) of this section that would have been due exceeds the total 21
gross receipts tax remitted under subsection (d) of this section. 22
(3) “Gross receipts surplus” means the amount by which the total gross 23 2 SENATE BILL 724
receipts tax remitted under subsection (d) of this section exceeds the amount of property 1
tax calculated under subsection (e)(2) of this section that would have been due.] 2
[(4)] (2) (i) “Heavy equipment property” means construction, 3
earthmoving, or industrial equipment that is mobile, including any attachment for the 4
heavy equipment. 5
(ii) “Heavy equipment property” includes: 6
1. a self–propelled vehicle that is not designed to be driven 7
on a highway; and 8
2. industrial electrical generation equipment, industrial lift 9
equipment, industrial material handling equipment, or other similar industrial equipment. 10
[(5)] (3) “Short–term lease or rental” means the lease or rental of heavy 11
equipment property for a period of 365 days or less. 12
(b) (1) Except as provided in subsection (c) of this section, there is a tax at a 13
rate of 2% on the gross receipts from the short–term lease or rental of heavy equipment 14
property by a person whose principal business is the short–term lease or rental of heavy 15
equipment property at retail. 16
(2) A person is in the principal business of short–term lease or rental of 17
heavy equipment property if: 18
(i) the largest segment of total rental receipts of the business is from 19
the short–term lease or rental of heavy equipment property; and 20
(ii) the business is described under Code 532412 of the North 21
American Industry Classification System as published by the United States Census 22
Bureau. 23
(c) The tax imposed under this section does not apply to: 24
(1) a business located in a county or municipality that does not impose a 25
personal property tax; OR 26
(2) A SHORT–TERM LEASE OR RENTAL OF HEAVY EQUIPMENT 27
PROPERTY TO THE FEDE RAL GOVERNMENT , THE STATE, A COUNTY, OR A 28
MUNICIPALITY . 29
(d) (1) A person who owns a business with gross receipts subject to the tax 30
under this section shall collect the tax from the rental customer and remit the tax as 31
provided in this subsection. 32
SENATE BILL 724 3
(2) The tax is payable quarterly and due by the last day of the month after 1
the end of the quarter. 2
(3) A person who owns a business with gross receipts subject to the tax 3
under this section shall remit the tax collected to: 4
(i) the county in which the business is located, if that location is not 5
within a municipality; or 6
(ii) the county and municipality in which the business is located in 7
proportion to the personal property tax rate of the county and municipality, if that location 8
is within a municipality. 9
(4) Notwithstanding any other law and except as otherwise provided in this 10
section, the gross receipts tax imposed under this section shall be administered and 11
collected according to the laws applicable to the personal property tax under the 12
Tax – Property Article. 13
(e) [(1)] A person who owns a business with gross receipts subject to the tax 14
under subsection (b) of this section shall submit[: 15
(i)] to the Department of Assessments and Taxation a report on 16
personal property as required under § 11–101 of the Tax – Property Article[; and 17
(ii) to the county or municipality where the heavy equipment rental 18
business is located a list of all personal property, including the original cost and date of 19
acquisition of the property, that: 20
1. is subject to the gross receipts tax under this section; and 21
2. is exempt from the property tax under § 7–243 of the Tax 22
– Property Article]. 23
[(2) For each person that submits a list under paragraph (1)(ii) of this 24
subsection, a county or municipality shall calculate the amount of property tax that would 25
have been due for all property that is exempt under § 7–243 of the Tax – Property Article. 26
(3) A county or municipality shall calculate the difference between: 27
(i) the total gross receipts tax remitted under subsection (d) of this 28
section by the person during the previous calendar year; and 29
(ii) the amount of property tax calculated under paragraph (2) of this 30
subsection that would have been due. 31
(4) (i) On or before February 28 of each year, a county or municipality 32 4 SENATE BILL 724
shall provide a statement to each person who owns a business with gross receipts subject 1
to the tax under subsection (b) of this section that includes: 2
1. the total gross receipts tax remitted under subsection (d) 3
of this section during the previous calendar year; 4
2. the total property tax calculated under paragraph (2) of 5
this subsection that would have been due; and 6
3. the gross receipts shortage or gross receipts surplus. 7
(ii) If the statement includes a gross receipts shortage, the county or 8
municipality shall include with the statement a bill for the amount of the gross receipts 9
shortage payable on or before March 31 of each year. 10
(5) The list required under paragraph (1)(ii) of this subsection shall be 11
submitted with the second quarterly payment required under subsection (d)(2) of this 12
section.] 13
SECTION 2. AND BE IT FURTHER ENACTED, That th is Act shall take effect July 14
1, 2022. 15