MD
Maryland Senate Bill SB724

Maryland 2022 Regular Session

Maryland Senate Bill SB724 Compare Versions

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1- LAWRENCE J. HOGAN, JR., Governor Ch. 635
21
3-– 1 –
4-Chapter 635
5-(Senate Bill 724)
62
7-AN ACT concerning
3+EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
4+ [Brackets] indicate matter deleted from existing law.
5+ Underlining indicates amendments to bill.
6+ Strike out indicates matter stricken from the bill by amendment or deleted from the law by
7+amendment.
8+ *sb0724*
89
9-Gross Receipts Tax on Short–Term Lease or Rental of Heavy Equipment
10-– Alterations
10+SENATE BILL 724
11+Q8 2lr2787
12+ CF HB 795
13+By: Senator King
14+Introduced and read first time: February 7, 2022
15+Assigned to: Budget and Taxation
16+Committee Report: Favorable
17+Senate action: Adopted
18+Read second time: March 18, 2022
1119
12-FOR the purpose of exempting governments from the tax on gross receipts from the
13-short–term lease or rental of heavy equipment property; repealing a requirement
14-that a person with gross receipts subject to tax to report certain information to the
15-county or municipal corporation where the heavy equipment rental business is
16-located; and generally relating to the taxation of short–term leases and rentals of
17-heavy equipment.
20+CHAPTER ______
1821
19-BY repealing and reenacting, with amendments,
20- Article – Local Government
21-Section 20–609
22- Annotated Code of Maryland
23- (2013 Volume and 2021 Supplement)
22+AN ACT concerning 1
2423
25- SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
26-That the Laws of Maryland read as follows:
24+Gross Receipts Tax on Short–Term Lease or Rental of Heavy Equipment 2
25+– Alterations 3
2726
28-Article – Local Government
27+FOR the purpose of exempting governments from the tax on gross receipts from the 4
28+short–term lease or rental of heavy equipment property; repealing a requirement 5
29+that a person with gross receipts subject to tax to report certain information to the 6
30+county or municipal corporation where the heavy equipment rental business is 7
31+located; and generally relating to the taxation of short–term leases and rentals of 8
32+heavy equipment. 9
2933
30-20–609.
34+BY repealing and reenacting, with amendments, 10
35+ Article – Local Government 11
36+Section 20–609 12
37+ Annotated Code of Maryland 13
38+ (2013 Volume and 2021 Supplement) 14
3139
32- (a) (1) In this section the following words have the meanings indicated.
40+ SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 15
41+That the Laws of Maryland read as follows: 16
3342
34- [(2) “Gross receipts shortage” means the amount by which the property tax
35-calculated under subsection (e)(2) of this section that would have been due exceeds the total
36-gross receipts tax remitted under subsection (d) of this section.
43+Article – Local Government 17
3744
38- (3) “Gross receipts surplus” means the amount by which the total gross
39-receipts tax remitted under subsection (d) of this section exceeds the amount of property
40-tax calculated under subsection (e)(2) of this section that would have been due.]
45+20–609. 18
4146
42- [(4)] (2) (i) “Heavy equipment property” means construction,
43-earthmoving, or industrial equipment that is mobile, including any attachment for the
44-heavy equipment.
47+ (a) (1) In this section the following words have the meanings indicated. 19
48+ 2 SENATE BILL 724
4549
46- (ii) “Heavy equipment property” includes:
4750
48- 1. a self–propelled vehicle that is not designed to be driven Ch. 635 2022 LAWS OF MARYLAND
51+ [(2) “Gross receipts shortage” means the amount by which the property tax 1
52+calculated under subsection (e)(2) of this section that would have been due exceeds the total 2
53+gross receipts tax remitted under subsection (d) of this section. 3
4954
50-– 2 –
51-on a highway; and
55+ (3) “Gross receipts surplus” means the amount by which the total gross 4
56+receipts tax remitted under subsection (d) of this section exceeds the amount of property 5
57+tax calculated under subsection (e)(2) of this section that would have been due.] 6
5258
53- 2. industrial electrical generation equipment, industrial lift
54-equipment, industrial material handling equipment, or other similar industrial equipment.
59+ [(4)] (2) (i) “Heavy equipment property” means construction, 7
60+earthmoving, or industrial equipment that is mobile, including any attachment for the 8
61+heavy equipment. 9
5562
56- [(5)] (3) “Short–term lease or rental” means the lease or rental of heavy
57-equipment property for a period of 365 days or less.
63+ (ii) “Heavy equipment property” includes: 10
5864
59- (b) (1) Except as provided in subsection (c) of this section, there is a tax at a
60-rate of 2% on the gross receipts from the short–term lease or rental of heavy equipment
61-property by a person whose principal business is the short–term lease or rental of heavy
62-equipment property at retail.
65+ 1. a self–propelled vehicle that is not designed to be driven 11
66+on a highway; and 12
6367
64- (2) A person is in the principal business of short–term lease or rental of
65-heavy equipment property if:
68+ 2. industrial electrical generation equipment, industrial lift 13
69+equipment, industrial material handling equipment, or other similar industrial equipment. 14
6670
67- (i) the largest segment of total rental receipts of the business is from
68-the short–term lease or rental of heavy equipment property; and
71+ [(5)] (3) “Short–term lease or rental” means the lease or rental of heavy 15
72+equipment property for a period of 365 days or less. 16
6973
70- (ii) the business is described under Code 532412 of the North
71-American Industry Classification System as published by the United States Census
72-Bureau.
74+ (b) (1) Except as provided in subsection (c) of this section, there is a tax at a 17
75+rate of 2% on the gross receipts from the short–term lease or rental of heavy equipment 18
76+property by a person whose principal business is the short–term lease or rental of heavy 19
77+equipment property at retail. 20
7378
74- (c) The tax imposed under this section does not apply to:
79+ (2) A person is in the principal business of short–term lease or rental of 21
80+heavy equipment property if: 22
7581
76- (1) a business located in a county or municipality that does not impose a
77-personal property tax; OR
82+ (i) the largest segment of total rental receipts of the business is from 23
83+the short–term lease or rental of heavy equipment property; and 24
7884
79- (2) A SHORT–TERM LEASE OR RENTAL OF HEAVY EQUIPMENT
80-PROPERTY TO THE FEDE RAL GOVERNMEN T, THE STATE, A COUNTY, OR A
81-MUNICIPALITY .
85+ (ii) the business is described under Code 532412 of the North 25
86+American Industry Classification System as published by the United States Census 26
87+Bureau. 27
8288
83- (d) (1) A person who owns a business with gross receipts subject to the tax
84-under this section shall collect the tax from the rental customer and remit the tax as
85-provided in this subsection.
89+ (c) The tax imposed under this section does not apply to: 28
8690
87- (2) The tax is payable quarterly and due by the last day of the month after
88-the end of the quarter.
91+ (1) a business located in a county or municipality that does not impose a 29
92+personal property tax; OR 30
8993
90- (3) A person who owns a business with gross receipts subject to the tax
91-under this section shall remit the tax collected to:
94+ (2) A SHORT–TERM LEASE OR RENTAL OF HEAVY EQUIPMENT 31
95+PROPERTY TO THE FEDE RAL GOVERNMENT , THE STATE, A COUNTY, OR A 32
96+MUNICIPALITY . 33 SENATE BILL 724 3
9297
93- (i) the county in which the business is located, if that location is not
94-within a municipality; or
95- LAWRENCE J. HOGAN, JR., Governor Ch. 635
9698
97-– 3 –
98- (ii) the county and municipality in which the business is located in
99-proportion to the personal property tax rate of the county and municipality, if that location
100-is within a municipality.
10199
102- (4) Notwithstanding any other law and except as otherwise provided in this
103-section, the gross receipts tax imposed under this section shall be administered and
104-collected according to the laws applicable to the personal property tax under the
105-Tax – Property Article.
100+ (d) (1) A person who owns a business with gross receipts subject to the tax 1
101+under this section shall collect the tax from the rental customer and remit the tax as 2
102+provided in this subsection. 3
106103
107- (e) [(1)] A person who owns a business with gross receipts subject to the tax
108-under subsection (b) of this section shall submit[:
104+ (2) The tax is payable quarterly and due by the last day of the month after 4
105+the end of the quarter. 5
109106
110- (i)] to the Department of Assessments and Taxation a report on
111-personal property as required under § 11–101 of the Tax – Property Article[; and
107+ (3) A person who owns a business with gross receipts subject to the tax 6
108+under this section shall remit the tax collected to: 7
112109
113- (ii) to the county or municipality where the heavy equipment rental
114-business is located a list of all personal property, including the original cost and date of
115-acquisition of the property, that:
110+ (i) the county in which the business is located, if that location is not 8
111+within a municipality; or 9
116112
117- 1. is subject to the gross receipts tax under this section; and
113+ (ii) the county and municipality in which the business is located in 10
114+proportion to the personal property tax rate of the county and municipality, if that location 11
115+is within a municipality. 12
118116
119- 2. is exempt from the property tax under § 7–243 of the Tax
120-– Property Article].
117+ (4) Notwithstanding any other law and except as otherwise provided in this 13
118+section, the gross receipts tax imposed under this section shall be administered and 14
119+collected according to the laws applicable to the personal property tax under the 15
120+Tax – Property Article. 16
121121
122- [(2) For each person that submits a list under paragraph (1)(ii) of this
123-subsection, a county or municipality shall calculate the amount of property tax that would
124-have been due for all property that is exempt under § 7–243 of the Tax – Property Article.
122+ (e) [(1)] A person who owns a business with gross receipts subject to the tax 17
123+under subsection (b) of this section shall submit[: 18
125124
126- (3) A county or municipality shall calculate the difference between:
125+ (i)] to the Department of Assessments and Taxation a report on 19
126+personal property as required under § 11–101 of the Tax – Property Article[; and 20
127127
128- (i) the total gross receipts tax remitted under subsection (d) of this
129-section by the person during the previous calendar year; and
128+ (ii) to the county or municipality where the heavy equipment rental 21
129+business is located a list of all personal property, including the original cost and date of 22
130+acquisition of the property, that: 23
130131
131- (ii) the amount of property tax calculated under paragraph (2) of this
132-subsection that would have been due.
132+ 1. is subject to the gross receipts tax under this section; and 24
133133
134- (4) (i) On or before February 28 of each year, a county or municipality
135-shall provide a statement to each person who owns a business with gross receipts subject
136-to the tax under subsection (b) of this section that includes:
134+ 2. is exempt from the property tax under § 7–243 of the Tax 25
135+– Property Article]. 26
137136
138- 1. the total gross receipts tax remitted under subsection (d)
139-of this section during the previous calendar year;
137+ [(2) For each person that submits a list under paragraph (1)(ii) of this 27
138+subsection, a county or municipality shall calculate the amount of property tax that would 28
139+have been due for all property that is exempt under § 7–243 of the Tax – Property Article. 29
140140
141- 2. the total property tax calculated under paragraph (2) of
142-this subsection that would have been due; and
143- Ch. 635 2022 LAWS OF MARYLAND
141+ (3) A county or municipality shall calculate the difference between: 30
144142
145-– 4 –
146- 3. the gross receipts shortage or gross receipts surplus.
143+ (i) the total gross receipts tax remitted under subsection (d) of this 31
144+section by the person during the previous calendar year; and 32 4 SENATE BILL 724
147145
148- (ii) If the statement includes a gross receipts shortage, the county or
149-municipality shall include with the statement a bill for the amount of the gross receipts
150-shortage payable on or before March 31 of each year.
151146
152- (5) The list required under paragraph (1)(ii) of this subsection shall be
153-submitted with the second quarterly payment required under subsection (d)(2) of this
154-section.]
155147
156- SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July
157-1, 2022.
148+ (ii) the amount of property tax calculated under paragraph (2) of this 1
149+subsection that would have been due. 2
158150
159-Enacted under Article II, § 17(c) of the Maryland Constitution, May 29, 2022.
151+ (4) (i) On or before February 28 of each year, a county or municipality 3
152+shall provide a statement to each person who owns a business with gross receipts subject 4
153+to the tax under subsection (b) of this section that includes: 5
154+
155+ 1. the total gross receipts tax remitted under subsection (d) 6
156+of this section during the previous calendar year; 7
157+
158+ 2. the total property tax calculated under paragraph (2) of 8
159+this subsection that would have been due; and 9
160+
161+ 3. the gross receipts shortage or gross receipts surplus. 10
162+
163+ (ii) If the statement includes a gross receipts shortage, the county or 11
164+municipality shall include with the statement a bill for the amount of the gross receipts 12
165+shortage payable on or before March 31 of each year. 13
166+
167+ (5) The list required under paragraph (1)(ii) of this subsection shall be 14
168+submitted with the second quarterly payment required under subsection (d)(2) of this 15
169+section.] 16
170+
171+ SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 17
172+1, 2022. 18
173+
174+
175+
176+
177+Approved:
178+________________________________________________________________________________
179+ Governor.
180+________________________________________________________________________________
181+ President of the Senate.
182+________________________________________________________________________________
183+ Speaker of the House of Delegates.