LAWRENCE J. HOGAN, JR., Governor Ch. 635
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Chapter 635
(Senate Bill 724)
AN ACT concerning
Gross Receipts Tax on Short–Term Lease or Rental of Heavy Equipment
– Alterations
FOR the purpose of exempting governments from the tax on gross receipts from the
short–term lease or rental of heavy equipment property; repealing a requirement
that a person with gross receipts subject to tax to report certain information to the
county or municipal corporation where the heavy equipment rental business is
located; and generally relating to the taxation of short–term leases and rentals of
heavy equipment.
BY repealing and reenacting, with amendments,
Article – Local Government
Section 20–609
Annotated Code of Maryland
(2013 Volume and 2021 Supplement)
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
That the Laws of Maryland read as follows:
Article – Local Government
20–609.
(a) (1) In this section the following words have the meanings indicated.
[(2) “Gross receipts shortage” means the amount by which the property tax
calculated under subsection (e)(2) of this section that would have been due exceeds the total
gross receipts tax remitted under subsection (d) of this section.
(3) “Gross receipts surplus” means the amount by which the total gross
receipts tax remitted under subsection (d) of this section exceeds the amount of property
tax calculated under subsection (e)(2) of this section that would have been due.]
[(4)] (2) (i) “Heavy equipment property” means construction,
earthmoving, or industrial equipment that is mobile, including any attachment for the
heavy equipment.
(ii) “Heavy equipment property” includes:
1. a self–propelled vehicle that is not designed to be driven Ch. 635 2022 LAWS OF MARYLAND
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on a highway; and
2. industrial electrical generation equipment, industrial lift
equipment, industrial material handling equipment, or other similar industrial equipment.
[(5)] (3) “Short–term lease or rental” means the lease or rental of heavy
equipment property for a period of 365 days or less.
(b) (1) Except as provided in subsection (c) of this section, there is a tax at a
rate of 2% on the gross receipts from the short–term lease or rental of heavy equipment
property by a person whose principal business is the short–term lease or rental of heavy
equipment property at retail.
(2) A person is in the principal business of short–term lease or rental of
heavy equipment property if:
(i) the largest segment of total rental receipts of the business is from
the short–term lease or rental of heavy equipment property; and
(ii) the business is described under Code 532412 of the North
American Industry Classification System as published by the United States Census
Bureau.
(c) The tax imposed under this section does not apply to:
(1) a business located in a county or municipality that does not impose a
personal property tax; OR
(2) A SHORT–TERM LEASE OR RENTAL OF HEAVY EQUIPMENT
PROPERTY TO THE FEDE RAL GOVERNMEN T, THE STATE, A COUNTY, OR A
MUNICIPALITY .
(d) (1) A person who owns a business with gross receipts subject to the tax
under this section shall collect the tax from the rental customer and remit the tax as
provided in this subsection.
(2) The tax is payable quarterly and due by the last day of the month after
the end of the quarter.
(3) A person who owns a business with gross receipts subject to the tax
under this section shall remit the tax collected to:
(i) the county in which the business is located, if that location is not
within a municipality; or
LAWRENCE J. HOGAN, JR., Governor Ch. 635
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(ii) the county and municipality in which the business is located in
proportion to the personal property tax rate of the county and municipality, if that location
is within a municipality.
(4) Notwithstanding any other law and except as otherwise provided in this
section, the gross receipts tax imposed under this section shall be administered and
collected according to the laws applicable to the personal property tax under the
Tax – Property Article.
(e) [(1)] A person who owns a business with gross receipts subject to the tax
under subsection (b) of this section shall submit[:
(i)] to the Department of Assessments and Taxation a report on
personal property as required under § 11–101 of the Tax – Property Article[; and
(ii) to the county or municipality where the heavy equipment rental
business is located a list of all personal property, including the original cost and date of
acquisition of the property, that:
1. is subject to the gross receipts tax under this section; and
2. is exempt from the property tax under § 7–243 of the Tax
– Property Article].
[(2) For each person that submits a list under paragraph (1)(ii) of this
subsection, a county or municipality shall calculate the amount of property tax that would
have been due for all property that is exempt under § 7–243 of the Tax – Property Article.
(3) A county or municipality shall calculate the difference between:
(i) the total gross receipts tax remitted under subsection (d) of this
section by the person during the previous calendar year; and
(ii) the amount of property tax calculated under paragraph (2) of this
subsection that would have been due.
(4) (i) On or before February 28 of each year, a county or municipality
shall provide a statement to each person who owns a business with gross receipts subject
to the tax under subsection (b) of this section that includes:
1. the total gross receipts tax remitted under subsection (d)
of this section during the previous calendar year;
2. the total property tax calculated under paragraph (2) of
this subsection that would have been due; and
Ch. 635 2022 LAWS OF MARYLAND
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3. the gross receipts shortage or gross receipts surplus.
(ii) If the statement includes a gross receipts shortage, the county or
municipality shall include with the statement a bill for the amount of the gross receipts
shortage payable on or before March 31 of each year.
(5) The list required under paragraph (1)(ii) of this subsection shall be
submitted with the second quarterly payment required under subsection (d)(2) of this
section.]
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July
1, 2022.
Enacted under Article II, § 17(c) of the Maryland Constitution, May 29, 2022.