EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*sb0736*
SENATE BILL 736
Q3, L6 2lr1638
By: Senators Simonaire, Ready, Salling, Hough, Carozza, Corderman, Gallion, and
Bailey
Introduced and read first time: February 7, 2022
Assigned to: Budget and Taxation
A BILL ENTITLED
AN ACT concerning 1
Real Local Tax Relief for Working Families Act of 2022 2
FOR the purpose of altering the calculation of a certain grant to certain counties under 3
certain circumstances; altering the minimum tax rate that a county is required to 4
impose on an individual’s Maryland taxable income; and generally relating to the 5
county income tax. 6
BY repealing and reenacting, with amendments, 7
Article – Local Government 8
Section 16–501 9
Annotated Code of Maryland 10
(2013 Volume and 2021 Supplement) 11
(As enacted by Chapters 17 and 23 of the Acts of the General Assembly of the 2021 12
Special Session) 13
BY repealing and reenacting, with amendments, 14
Article – Tax – General 15
Section 10–106 16
Annotated Code of Maryland 17
(2016 Replacement Volume and 2021 Supplement) 18
(As enacted by Chapters 17 and 23 of the Acts of the General Assembly of the 2021 19
Special Session) 20
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 21
That the Laws of Maryland read as follows: 22
Article – Local Government 23
16–501. 24
2 SENATE BILL 736
(a) Subject to subsection (e) of this section, for each fiscal year, the Comptroller 1
shall pay to an eligible county a grant in the amount determined under subsection (c)(3) of 2
this section. 3
(b) A county may not receive a grant under subsection (a) of this section if any of 4
the county’s income tax rates were less than 2.6%: 5
(1) for the taxable year that ended in the second prior fiscal year; or 6
(2) for any subsequent taxable year through the taxable year that ends in 7
the current fiscal year. 8
(c) (1) For each fiscal year, the Comptroller shall determine for each county: 9
(i) the county income tax collected from individuals for the taxable 10
year that ended in the second prior fiscal year, based on tax returns filed through November 11
1 of the year following the applicable taxable year; and 12
(ii) the amount of county income tax that the county would have 13
received if the county income tax rate was 2.54%. 14
(2) For each fiscal year, the Comptroller shall determine as rounded to the 15
nearest cent: 16
(i) the per capita yield of the county income tax for each county, 17
based on: 18
1. the population of the county as last projected by the 19
Maryland Department of Health for July 1 of the applicable taxable year or the latest 20
decennial census for the applicable taxable year; and 21
2. the amount specified in paragraph (1)(ii) of this 22
subsection; and 23
(ii) the per capita statewide yield of the county income tax, based on: 24
1. the State population as last projected by the Maryland 25
Department of Health for July 1 of the applicable taxable year or the latest decennial 26
census for the applicable taxable year; and 27
2. the amount of county income tax specified in paragraph 28
(1)(ii) of this subsection for all counties. 29
(3) If the per capita yield of the county income tax for a county determined 30
under paragraph (2)(i) of this subsection is less than 75% of the per capita statewide yield 31
of the county income tax determined under paragraph (2)(ii) of this subsection, the 32 SENATE BILL 736 3
Comptroller shall determine the amount that would increase the county per capita yield to 1
equal 75% of the statewide per capita yield, as rounded to the nearest dollar. 2
(d) The Comptroller shall pay to an eligible county the amount determined under 3
subsection (c)(3) of this section in quarterly payments during each fiscal year. 4
(e) (1) Except as provided in paragraphs (2) and (3) of this subsection, for fiscal 5
year 2011 and each subsequent fiscal year, the distribution provided to any county or 6
Baltimore City under this section may not exceed the amount distributed to the county or 7
Baltimore City for fiscal year 2010. 8
(2) (i) This paragraph applies to a county or Baltimore City if the 9
county or Baltimore City has a single county income tax rate. 10
(ii) If a county or Baltimore City has a county income tax rate of at 11
least 2.8% but less than 3%, the county or Baltimore City may receive a minimum of 20% 12
of the amount determined under subsection (c)(3) of this section. 13
(iii) If a county or Baltimore City has a county income tax rate of at 14
least 3% but less than 3.2%, the county or Baltimore City may receive a minimum of 40% 15
of the amount determined under subsection (c)(3) of this section. 16
(iv) If a county or Baltimore City has a county income tax rate of at 17
least 3.2%: 18
1. on or before June 30, 2017, the county or Baltimore City 19
may receive a minimum of 60% of the amount determined under subsection (c)(3) of this 20
section; 21
2. in fiscal year 2018, the county or Baltimore City may 22
receive a minimum of 63.75% of the amount determined under subsection (c)(3) of this 23
section; 24
3. in fiscal years 2019, 2020, and 2021, the county or 25
Baltimore City may receive a minimum of 67.5% of the amount dete rmined under 26
subsection (c)(3) of this section; and 27
4. in fiscal year 2022, and each fiscal year thereafter, the 28
county or Baltimore City may receive a minimum of 75% of the amount determined under 29
subsection (c)(3) of this section. 30
(3) (i) This paragraph applies to a county or Baltimore City if the 31
county or Baltimore City has more than one county income tax rate. 32
(ii) If each county income tax rate imposed by a county or Baltimore 33
City ON MARYLAND TAXABLE INCO ME GREATER THAN $500,000 is at least 2.8% [but 34 4 SENATE BILL 736
less than 3.0%], the county or Baltimore City may receive a minimum of 20% of the amount 1
determined under subsection (c)(3) of this section. 2
(iii) If the [lowest county income tax rate imposed by a county or 3
Baltimore City is at least 2.9% and each] county income tax rate imposed BY A COUNTY 4
OR BALTIMORE CITY on Maryland taxable income greater than [$100,000] $500,000 is 5
at least 3.0%, the county or Baltimore City may receive a minimum of 40% of the amount 6
determined under subsection (c)(3) of this section. 7
(iv) If the [lowest county income tax rate imposed by a county or 8
Baltimore City is at least 3.1% and each] county income tax rate imposed BY A COUNTY 9
OR BALTIMORE CITY on Maryland taxable income greater than [$100,000] $500,000 is 10
at least 3.2%, the county or Baltimore City may receive a minimum of 75% of the amount 11
determined under subsection (c)(3) of this section. 12
Article – Tax – General 13
10–106. 14
(a) (1) Each county shall set, by ordinance or resolution, a county income tax 15
equal to at least [2.25%] 1% but not more than 3.20% of an individual’s Maryland taxable 16
income for a taxable year beginning after December 31, 2001. 17
(2) A county income tax rate continues until the county changes the rate 18
by ordinance or resolution. 19
(3) (i) A county may not increase its county income tax rate above 2.6% 20
until after the county has held a public hearing on the proposed act, ordinance, or resolution 21
to increase the rate. 22
(ii) The county shall publish at least once each week for 2 successive 23
weeks in a newspaper of general circulation in the county: 24
1. notice of the public hearing; and 25
2. a fair summary of the proposed act, ordinance, or 26
resolution to increase the county income tax rate above 2.6%. 27
(4) Notwithstanding paragraph (1) or (2) of this subsection, in Howard 28
County, the county income tax rate may be changed only by ordinance and not by 29
resolution. 30
(b) If a county changes its county income tax rate, the county shall: 31
(1) increase or decrease the rate in increments of one one–hundredth of a 32
percentage point, effective on January 1 of the year that the county designates; and 33 SENATE BILL 736 5
(2) give the Comptroller notice of the rate or income bracket change and 1
the effective date of the rate or income bracket change on or before July 1 prior to its 2
effective date. 3
(c) (1) For any county income tax rate that is effective on or after January 1, 4
2022, the county may apply the county income tax on a bracket basis. 5
(2) A county that imposes the county income tax on a bracket basis: 6
(i) shall set, by ordinance or resolution, the income brackets that 7
apply to each income tax rate; 8
(ii) may set income brackets that differ from the income brackets to 9
which the State income tax applies; 10
(iii) may not set a minimum income tax rate less than [2.25%] 1% of 11
an individual’s Maryland taxable income; and 12
(iv) may not apply an income tax rate to a higher income bracket that 13
is less than the income tax rate applied to a lower income bracket. 14
(3) A county may request information from the Comptroller to assist the 15
county in determining income brackets and applicable income tax rates that are 16
revenue–neutral for the county. 17
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect June 18
1, 2022, and shall be applicable to all taxable years beginning after December 31, 2022. 19