Maryland 2024 Regular Session

Maryland House Bill HB1018 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 EXISTIN G LAW.
4	4	[Brackets] indicate matter deleted from existing law.
5	5	hb1018
6	6
7	7	HOUSE BILL 1018
8	8	Q1 4lr2062
9	9
10	10	By: Delegate Qi
11	11	Introduced and read first time: February 5, 2024
12	12	Assigned to: Ways and Means
13	13
14	14	A BILL ENTITLED
15	15
16	16	AN ACT concerning 1
17	17
18	18	Manufacturing Business Personal Property Tax – Exemption 2
19	19
20	20	FOR the purpose of exempting all personal property in the possession of a person engaged 3
21	21	in a manufacturing business that is a small or medium–sized enterprise from the 4
22	22	personal property tax; and generally relating to the personal property tax. 5
23	23
24	24	BY repealing and reenacting, without amendments, 6
25	25	Article – Tax – Property 7
26	26	Section 1–101(a), (r), and (dd) 8
27	27	Annotated Code of Maryland 9
28	28	(2019 Replacement Volume and 2023 Supplement) 10
29	29
30	30	BY repealing and reenacting, with amendments, 11
31	31	Article – Tax – Property 12
32	32	Section 6–104, 7–109(a), 7–222, 7–225, and 7–508 13
33	33	Annotated Code of Maryland 14
34	34	(2019 Replacement Volume and 2023 Supplement) 15
35	35
36	36	BY adding to 16
37	37	Article – Tax – Property 17
38	38	Section 7–225.1 18
39	39	Annotated Code of Maryland 19
40	40	(2019 Replacement Volume and 2023 Supplement) 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 – Tax – Property 23
46	46
47	47	1–101. 24
48	48	2 HOUSE BILL 1018
49	49
50	50
51	51	(a) In this article the following words have the meanings indicated. 1
52	52
53	53	(r) (1) “Manufacturing” means the process of substantially transforming, or a 2
54	54	substantial step in the process of substantially transforming, tangible personal property 3
55	55	into a new and different article of tangible personal property by use of labor or machinery. 4
56	56
57	57	(2) “Manufacturing” includes: 5
58	58
59	59	(i) the operation of sawmills, grain mills, or feed mills; 6
60	60
61	61	(ii) the operation of machinery and equipment used to extract and 7
62	62	process minerals, metals, or earthen materials or by–products that result from the 8
63	63	extracting or processing; 9
64	64
65	65	(iii) research and development activities, whether or not the company 10
66	66	has a product for sale; 11
67	67
68	68	(iv) the identification, design, or genetic engineering of biological 12
69	69	materials for research or manufacture; and 13
70	70
71	71	(v) the design, development, or creation of computer software for 14
72	72	sale, lease, or license. 15
73	73
74	74	(3) “Manufacturing” does not include: 16
75	75
76	76	(i) activities that are primarily a service; 17
77	77
78	78	(ii) activities that are intellectual, artistic, or clerical in nature; 18
79	79
80	80	(iii) public utility services, including telephone, gas, electric, water, 19
81	81	and steam production services; or 20
82	82
83	83	(iv) any other activity that would not commonly be considered as 21
84	84	manufacturing. 22
85	85
86	86	(dd) “Property tax” means the property tax imposed by: 23
87	87
88	88	(1) the State; 24
89	89
90	90	(2) a county; or 25
91	91
92	92	(3) a municipal corporation. 26
93	93
94	94	6–104. 27
95	95	HOUSE BILL 1018 3
96	96
97	97
98	98	Except as otherwise provided in §§ 7–222, 7–225.1, and 7–226 of this article, any 1
99	99	stock in business of a person who engages in a manufacturing or commercial business in 2
100	100	the State is subject to property tax. 3
101	101
102	102	7–109. 4
103	103
104	104	(a) [The] EXCEPT AS PROVIDED IN § 7–225.1 OF THIS TITLE, personal 5
105	105	property described in §§ 7–222, 7–225, and 7–226 of this title is subject to the municipal 6
106	106	corporation property tax unless exempted in full or in part by the governing body of the 7
107	107	municipal corporation by law. 8
108	108
109	109	7–222. 9
110	110
111	111	(a) Except as provided in § 7–109 of this title and in subsection (b) of this section, 10
112	112	the stock in business of a person engaged in a manufacturing or commercial business is not 11
113	113	subject to property tax. 12
114	114
115	115	(b) Except as provided by § 7–108 of this title AND § 7–225.1 OF THIS SUBTITL E, 13
116	116	the personal property described in subsection (a) of this section is subject to a county 14
117	117	property tax on 35% of its assessment in Wicomico County. 15
118	118
119	119	7–225. 16
120	120
121	121	(a) Except as provided in § 7–109 of this title and in subsection (b) of this section, 17
122	122	if used in manufacturing, the following personal property, however operated and whether 18
123	123	or not in use, is not subject to property tax: 19
124	124
125	125	(1) tools; 20
126	126
127	127	(2) implements; 21
128	128
129	129	(3) machinery; or 22
130	130
131	131	(4) manufacturing apparatus or engines. 23
132	132
133	133	(b) Except as provided by § 7–108 of this title AND § 7–225.1 OF THIS SUBTITLE , 24
134	134	the personal property listed in subsection (a) of this section is subject to a county property 25
135	135	tax on: 26
136	136
137	137	(1) 100% of its assessment in Garrett County, Somerset County, Wicomico 27
138	138	County, and Worcester County; and 28
139	139
140	140	(2) 75% of its assessment in Allegany County. 29
141	141
142	142	(c) Property does not qualify for the exemption under this section if the property 30
143	143	is used primarily in administration, management, sales, storage, shipping, receiving, or 31
144	144	any other nonmanufacturing activity. 32 4 HOUSE BILL 1018
145	145
146	146
147	147
148	148	(d) In order to qualify for the exemption under this section, a person claiming the 1
149	149	exemption must apply for and be granted the exemption by the Department. 2
150	150
151	151	7–225.1. 3
152	152
153	153	ALL PERSONAL PROPERTY IN THE POSSESSION OF A PERSON ENGAGED IN A 4
154	154	MANUFACTURING BUSINE SS THAT IS A SMALL O R MEDIUM–SIZED ENTERPRISE IS 5
155	155	EXEMPT FROM PROPERTY TAX , INCLUDING ANY SPECIAL TAXING DISTR ICT 6
156	156	PROPERTY TAX . 7
157	157
158	158	7–508. 8
159	159
160	160	(a) In this section, “manufacturer” means a person who engages in at least 2 of 9
161	161	the following processes: 10
162	162
163	163	(1) applies labor, skill, art, or science to materials; 11
164	164
165	165	(2) makes changes or modifications in existing material by processes 12
166	166	usually considered as manufacturing; 13
167	167
168	168	(3) develops new forms, qualities, properties, or combinations of materials, 14
169	169	or adapts materials to certain uses; or 15
170	170
171	171	(4) produces from materials a different kind of material with a new use. 16
172	172
173	173	(b) [The] SUBJECT TO § 7–225.1 OF THIS TITLE, THE governing body of 17
174	174	Washington County may exempt the raw materials used in a manufacturing process and 18
175	175	manufactured products in the possession of a manufacturer from the Washington County 19
176	176	property tax. 20
177	177
178	178	SECTION 2. AND BE IT FURTHER ENACTED, That this Act s hall take effect June 21
179	179	1, 2024, and shall be applicable to all taxable years beginning after June 30, 2024. 22