Maryland 2022 Regular Session

Maryland Senate Bill SB736 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2
3	3	EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTING LAW.
4	4	[Brackets] indicate matter deleted from existing law.
5	5	sb0736
6	6
7	7	SENATE BILL 736
8	8	Q3, L6 2lr1638
9	9
10	10	By: Senators Simonaire, Ready, Salling, Hough, Carozza, Corderman, Gallion, and
11	11	Bailey
12	12	Introduced and read first time: February 7, 2022
13	13	Assigned to: Budget and Taxation
14	14
15	15	A BILL ENTITLED
16	16
17	17	AN ACT concerning 1
18	18
19	19	Real Local Tax Relief for Working Families Act of 2022 2
20	20
21	21	FOR the purpose of altering the calculation of a certain grant to certain counties under 3
22	22	certain circumstances; altering the minimum tax rate that a county is required to 4
23	23	impose on an individual’s Maryland taxable income; and generally relating to the 5
24	24	county income tax. 6
25	25
26	26	BY repealing and reenacting, with amendments, 7
27	27	Article – Local Government 8
28	28	Section 16–501 9
29	29	Annotated Code of Maryland 10
30	30	(2013 Volume and 2021 Supplement) 11
31	31	(As enacted by Chapters 17 and 23 of the Acts of the General Assembly of the 2021 12
32	32	Special Session) 13
33	33
34	34	BY repealing and reenacting, with amendments, 14
35	35	Article – Tax – General 15
36	36	Section 10–106 16
37	37	Annotated Code of Maryland 17
38	38	(2016 Replacement Volume and 2021 Supplement) 18
39	39	(As enacted by Chapters 17 and 23 of the Acts of the General Assembly of the 2021 19
40	40	Special Session) 20
41	41
42	42	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 21
43	43	That the Laws of Maryland read as follows: 22
44	44
45	45	Article – Local Government 23
46	46
47	47	16–501. 24
48	48	2 SENATE BILL 736
49	49
50	50
51	51	(a) Subject to subsection (e) of this section, for each fiscal year, the Comptroller 1
52	52	shall pay to an eligible county a grant in the amount determined under subsection (c)(3) of 2
53	53	this section. 3
54	54
55	55	(b) A county may not receive a grant under subsection (a) of this section if any of 4
56	56	the county’s income tax rates were less than 2.6%: 5
57	57
58	58	(1) for the taxable year that ended in the second prior fiscal year; or 6
59	59
60	60	(2) for any subsequent taxable year through the taxable year that ends in 7
61	61	the current fiscal year. 8
62	62
63	63	(c) (1) For each fiscal year, the Comptroller shall determine for each county: 9
64	64
65	65	(i) the county income tax collected from individuals for the taxable 10
66	66	year that ended in the second prior fiscal year, based on tax returns filed through November 11
67	67	1 of the year following the applicable taxable year; and 12
68	68
69	69	(ii) the amount of county income tax that the county would have 13
70	70	received if the county income tax rate was 2.54%. 14
71	71
72	72	(2) For each fiscal year, the Comptroller shall determine as rounded to the 15
73	73	nearest cent: 16
74	74
75	75	(i) the per capita yield of the county income tax for each county, 17
76	76	based on: 18
77	77
78	78	1. the population of the county as last projected by the 19
79	79	Maryland Department of Health for July 1 of the applicable taxable year or the latest 20
80	80	decennial census for the applicable taxable year; and 21
81	81
82	82	2. the amount specified in paragraph (1)(ii) of this 22
83	83	subsection; and 23
84	84
85	85	(ii) the per capita statewide yield of the county income tax, based on: 24
86	86
87	87	1. the State population as last projected by the Maryland 25
88	88	Department of Health for July 1 of the applicable taxable year or the latest decennial 26
89	89	census for the applicable taxable year; and 27
90	90
91	91	2. the amount of county income tax specified in paragraph 28
92	92	(1)(ii) of this subsection for all counties. 29
93	93
94	94	(3) If the per capita yield of the county income tax for a county determined 30
95	95	under paragraph (2)(i) of this subsection is less than 75% of the per capita statewide yield 31
96	96	of the county income tax determined under paragraph (2)(ii) of this subsection, the 32 SENATE BILL 736 3
97	97
98	98
99	99	Comptroller shall determine the amount that would increase the county per capita yield to 1
100	100	equal 75% of the statewide per capita yield, as rounded to the nearest dollar. 2
101	101
102	102	(d) The Comptroller shall pay to an eligible county the amount determined under 3
103	103	subsection (c)(3) of this section in quarterly payments during each fiscal year. 4
104	104
105	105	(e) (1) Except as provided in paragraphs (2) and (3) of this subsection, for fiscal 5
106	106	year 2011 and each subsequent fiscal year, the distribution provided to any county or 6
107	107	Baltimore City under this section may not exceed the amount distributed to the county or 7
108	108	Baltimore City for fiscal year 2010. 8
109	109
110	110	(2) (i) This paragraph applies to a county or Baltimore City if the 9
111	111	county or Baltimore City has a single county income tax rate. 10
112	112
113	113	(ii) If a county or Baltimore City has a county income tax rate of at 11
114	114	least 2.8% but less than 3%, the county or Baltimore City may receive a minimum of 20% 12
115	115	of the amount determined under subsection (c)(3) of this section. 13
116	116
117	117	(iii) If a county or Baltimore City has a county income tax rate of at 14
118	118	least 3% but less than 3.2%, the county or Baltimore City may receive a minimum of 40% 15
119	119	of the amount determined under subsection (c)(3) of this section. 16
120	120
121	121	(iv) If a county or Baltimore City has a county income tax rate of at 17
122	122	least 3.2%: 18
123	123
124	124	1. on or before June 30, 2017, the county or Baltimore City 19
125	125	may receive a minimum of 60% of the amount determined under subsection (c)(3) of this 20
126	126	section; 21
127	127
128	128	2. in fiscal year 2018, the county or Baltimore City may 22
129	129	receive a minimum of 63.75% of the amount determined under subsection (c)(3) of this 23
130	130	section; 24
131	131
132	132	3. in fiscal years 2019, 2020, and 2021, the county or 25
133	133	Baltimore City may receive a minimum of 67.5% of the amount dete rmined under 26
134	134	subsection (c)(3) of this section; and 27
135	135
136	136	4. in fiscal year 2022, and each fiscal year thereafter, the 28
137	137	county or Baltimore City may receive a minimum of 75% of the amount determined under 29
138	138	subsection (c)(3) of this section. 30
139	139
140	140	(3) (i) This paragraph applies to a county or Baltimore City if the 31
141	141	county or Baltimore City has more than one county income tax rate. 32
142	142
143	143	(ii) If each county income tax rate imposed by a county or Baltimore 33
144	144	City ON MARYLAND TAXABLE INCO ME GREATER THAN $500,000 is at least 2.8% [but 34 4 SENATE BILL 736
145	145
146	146
147	147	less than 3.0%], the county or Baltimore City may receive a minimum of 20% of the amount 1
148	148	determined under subsection (c)(3) of this section. 2
149	149
150	150	(iii) If the [lowest county income tax rate imposed by a county or 3
151	151	Baltimore City is at least 2.9% and each] county income tax rate imposed BY A COUNTY 4
152	152	OR BALTIMORE CITY on Maryland taxable income greater than [$100,000] $500,000 is 5
153	153	at least 3.0%, the county or Baltimore City may receive a minimum of 40% of the amount 6
154	154	determined under subsection (c)(3) of this section. 7
155	155
156	156	(iv) If the [lowest county income tax rate imposed by a county or 8
157	157	Baltimore City is at least 3.1% and each] county income tax rate imposed BY A COUNTY 9
158	158	OR BALTIMORE CITY on Maryland taxable income greater than [$100,000] $500,000 is 10
159	159	at least 3.2%, the county or Baltimore City may receive a minimum of 75% of the amount 11
160	160	determined under subsection (c)(3) of this section. 12
161	161
162	162	Article – Tax – General 13
163	163
164	164	10–106. 14
165	165
166	166	(a) (1) Each county shall set, by ordinance or resolution, a county income tax 15
167	167	equal to at least [2.25%] 1% but not more than 3.20% of an individual’s Maryland taxable 16
168	168	income for a taxable year beginning after December 31, 2001. 17
169	169
170	170	(2) A county income tax rate continues until the county changes the rate 18
171	171	by ordinance or resolution. 19
172	172
173	173	(3) (i) A county may not increase its county income tax rate above 2.6% 20
174	174	until after the county has held a public hearing on the proposed act, ordinance, or resolution 21
175	175	to increase the rate. 22
176	176
177	177	(ii) The county shall publish at least once each week for 2 successive 23
178	178	weeks in a newspaper of general circulation in the county: 24
179	179
180	180	1. notice of the public hearing; and 25
181	181
182	182	2. a fair summary of the proposed act, ordinance, or 26
183	183	resolution to increase the county income tax rate above 2.6%. 27
184	184
185	185	(4) Notwithstanding paragraph (1) or (2) of this subsection, in Howard 28
186	186	County, the county income tax rate may be changed only by ordinance and not by 29
187	187	resolution. 30
188	188
189	189	(b) If a county changes its county income tax rate, the county shall: 31
190	190
191	191	(1) increase or decrease the rate in increments of one one–hundredth of a 32
192	192	percentage point, effective on January 1 of the year that the county designates; and 33 SENATE BILL 736 5
193	193
194	194
195	195
196	196	(2) give the Comptroller notice of the rate or income bracket change and 1
197	197	the effective date of the rate or income bracket change on or before July 1 prior to its 2
198	198	effective date. 3
199	199
200	200	(c) (1) For any county income tax rate that is effective on or after January 1, 4
201	201	2022, the county may apply the county income tax on a bracket basis. 5
202	202
203	203	(2) A county that imposes the county income tax on a bracket basis: 6
204	204
205	205	(i) shall set, by ordinance or resolution, the income brackets that 7
206	206	apply to each income tax rate; 8
207	207
208	208	(ii) may set income brackets that differ from the income brackets to 9
209	209	which the State income tax applies; 10
210	210
211	211	(iii) may not set a minimum income tax rate less than [2.25%] 1% of 11
212	212	an individual’s Maryland taxable income; and 12
213	213
214	214	(iv) may not apply an income tax rate to a higher income bracket that 13
215	215	is less than the income tax rate applied to a lower income bracket. 14
216	216
217	217	(3) A county may request information from the Comptroller to assist the 15
218	218	county in determining income brackets and applicable income tax rates that are 16
219	219	revenue–neutral for the county. 17
220	220
221	221	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect June 18
222	222	1, 2022, and shall be applicable to all taxable years beginning after December 31, 2022. 19