Maryland 2025 Regular Session

Maryland House Bill HB151 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	hb0151
6	6
7	7	HOUSE BILL 151
8	8	Q3 5lr0917
9	9	(PRE–FILED) CF SB 70
10	10	By: Delegate Palakovich Carr
11	11	Requested: September 23, 2024
12	12	Introduced and read first time: January 8, 2025
13	13	Assigned to: Ways and Means
14	14
15	15	A BILL ENTITLED
16	16
17	17	AN ACT concerning 1
18	18
19	19	County Income Tax – Rate and Income Brackets – Alterations 2
20	20
21	21	FOR the purpose of altering, subject to certain limitations, the maximum tax rate that a 3
22	22	county may impose on an individual’s Maryland taxable income; limiting the number 4
23	23	of brackets that a county that imposes the county income tax on a bracket basis may 5
24	24	set; requiring a county that imposes the county income tax on a bracket basis to use 6
25	25	certain income bracket thresholds; and generally relating to the county income tax. 7
26	26
27	27	BY repealing and reenacting, with amendments, 8
28	28	Article – Tax – General 9
29	29	Section 10–106 10
30	30	Annotated Code of Maryland 11
31	31	(2022 Replacement Volume and 2024 Supplement) 12
32	32
33	33	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 13
34	34	That the Laws of Maryland read as follows: 14
35	35
36	36	Article – Tax – General 15
37	37
38	38	10–106. 16
39	39
40	40	(a) (1) Each county shall set, by ordinance or resolution, a county income tax 17
41	41	equal to at least 2.25% but not more than [3.20%] 3.7% of an individual’s Maryland taxable 18
42	42	income [for a taxable year beginning after December 31, 2001]. 19
43	43
44	44	(2) A county income tax rate continues until the county changes the rate 20
45	45	by ordinance or resolution. 21
46	46
47	47	(3) (i) A county may not increase its county income tax rate above 2.6% 22 2 HOUSE BILL 151
48	48
49	49
50	50	until after the county has held a public hearing on the proposed act, ordinance, or resolution 1
51	51	to increase the rate. 2
52	52
53	53	(ii) The county shall publish at least once each week for 2 successive 3
54	54	weeks in a newspaper of general circulation in the county: 4
55	55
56	56	1. notice of the public hearing; and 5
57	57
58	58	2. a fair summary of the proposed act, ordinance, or 6
59	59	resolution to increase the county income tax rate above 2.6%. 7
60	60
61	61	(4) Notwithstanding paragraph (1) or (2) of this subsection, in Howard 8
62	62	County, the county income tax rate may be changed only by ordinance and not by 9
63	63	resolution. 10
64	64
65	65	(b) If a county changes its county income tax rate, the county shall: 11
66	66
67	67	(1) increase or decrease the rate in increments of one one–hundredth of a 12
68	68	percentage point, effective on January 1 of the year that the county designates; and 13
69	69
70	70	(2) give the Comptroller notice of the rate or income bracket change and 14
71	71	the effective date of the rate or income bracket change on or before July 1 prior to its 15
72	72	effective date. 16
73	73
74	74	(c) (1) For any county income tax rate that is effective on or after January 1, 17
75	75	2022, the county may apply the county income tax on a bracket basis. 18
76	76
77	77	(2) A county that imposes the county income tax on a bracket basis: 19
78	78
79	79	(i) SUBJECT TO PARAGRAPH (3) OF THIS SUBSECTION, shall set, 20
80	80	by ordinance or resolution, the income brackets that apply to each income tax rate; 21
81	81
82	82	(ii) [may set income brackets that differ from the income brackets to 22
83	83	which the State income tax applies] MAY APPLY THE SAME I NCOME TAX RATE TO MORE 23
84	84	THAN ONE OF THE INCO ME BRACKETS REQUIRED UNDER PARAGRAPH (3) OF THIS 24
85	85	SUBSECTION ; 25
86	86
87	87	(iii) may not set a minimum income tax rate less than 2.25% of an 26
88	88	individual’s Maryland taxable income; [and] 27
89	89
90	90	(iv) may not apply an income tax rate to a higher income bracket that 28
91	91	is less than the income tax rate applied to a lower income bracket; AND 29
92	92
93	93	(V) MAY NOT SET MORE THA N EIGHT INCOME BRACKETS EACH 30
94	94	FOR: 31
95	95	HOUSE BILL 151 3
96	96
97	97
98	98	1. INDIVIDUALS OTHER TH AN AN INDIVIDUAL 1
99	99	DESCRIBED UNDER ITEM 2 OF THIS ITEM; AND 2
100	100
101	101	2. SPOUSES FILING A JOINT RETURN OR A SURVIVING 3
102	102	SPOUSE OR HEAD OF HO USEHOLD AS DEFINED I N § 2 OF THE INTERNAL REVENUE 4
103	103	CODE. 5
104	104
105	105	(3) A COUNTY THAT IMPOSES THE COUNTY INCOME TA X ON A 6
106	106	BRACKET BASIS SHALL SET THE INCOME BRACKET T HRESHOLDS AS FOLLOWS : 7
107	107
108	108	(I) FOR AN INDIVIDUAL OTHER THA N AN INDIVIDUAL 8
109	109	DESCRIBED IN ITEM (II) OF THIS PARAGRAPH : 9
110	110
111	111	1. $1 THROUGH $25,000 OF MARYLAND TAXABLE 10
112	112	INCOME; 11
113	113
114	114	2. $25,001 THROUGH $50,000 OF MARYLAND TAXABLE 12
115	115	INCOME; 13
116	116
117	117	3. $50,001 THROUGH $100,000 OF MARYLAND TAXABLE 14
118	118	INCOME; 15
119	119
120	120	4. $100,001 THROUGH $250,000 OF MARYLAND 16
121	121	TAXABLE INCOME ; 17
122	122
123	123	5. $250,001 THROUGH $500,000 OF MARYLAND 18
124	124	TAXABLE INCOME ; 19
125	125
126	126	6. $500,001 THROUGH $750,000 OF MARYLAND 20
127	127	TAXABLE INCOME ; 21
128	128
129	129	7. $750,001 THROUGH $1,000,000 OF MARYLAND 22
130	130	TAXABLE INCOME ; AND 23
131	131
132	132	8. $1,000,001 OR MORE OF MARYLAND TAXABLE 24
133	133	INCOME; AND 25
134	134
135	135	(II) FOR SPOUSES FILING A JOINT RETURN OR FOR A SURVIVING 26
136	136	SPOUSE OR HEAD OF HO USEHOLD AS DEFINED I N § 2 OF THE INTERNAL REVENUE 27
137	137	CODE: 28
138	138
139	139	1. $1 THROUGH $50,000 OF MARYLAND TAXABLE 29
140	140	INCOME; 30 4 HOUSE BILL 151
141	141
142	142
143	143
144	144	2. $50,001 THROUGH $75,000 OF MARYLAND TAXABLE 1
145	145	INCOME; 2
146	146
147	147	3. $75,001 THROUGH $150,000 OF MARYLAND TAXABLE 3
148	148	INCOME; 4
149	149
150	150	4. $150,001 THROUGH $300,000 OF MARYLAND 5
151	151	TAXABLE INCOME ; 6
152	152
153	153	5. $300,001 THROUGH $600,000 OF MARYLAND 7
154	154	TAXABLE INCOME ; 8
155	155
156	156	6. $600,001 THROUGH $850,000 OF MARYLAND 9
157	157	TAXABLE INCOME ; 10
158	158
159	159	7. $850,001 THROUGH $1,250,000 OF MARYLAND 11
160	160	TAXABLE INCOME ; AND 12
161	161
162	162	8. $1,250,001 OR MORE OF MARYLAND TAXABLE 13
163	163	INCOME. 14
164	164
165	165	(4) A county may request information from the Comptroller to assist the 15
166	166	county in determining income brackets and applicable income tax rates that are 16
167	167	revenue–neutral for the county. 17
168	168
169	169	(D) A COUNTY MAY SET AN IN COME TAX RATE THAT I S GREATER THAN 3.2% 18
170	170	ONLY ON MARYLAND TAXABLE INCO ME THAT IS IN EXCESS OF: 19
171	171
172	172	(1) $250,000 FOR INDIVIDUALS OTH ER THAN AN INDIVIDUA L 20
173	173	DESCRIBED UNDER ITEM (2) OF THIS SUBSECTION ; AND 21
174	174
175	175	(2) $300,000 FOR SPOUSES FILING A JOINT RETURN OR FOR A 22
176	176	SURVIVING SPOUSE OR HEAD OF HOUSEHOLD AS DEFINED IN § 2 OF THE INTERNAL 23
177	177	REVENUE CODE. 24
178	178
179	179	(E) IT IS THE INTENT OF T HE GENERAL ASSEMBLY THAT A COUNT Y THAT 25
180	180	IMPOSES AN INCOME TA X RATE THAT EXCEEDS 3.2% OF AN INDIVIDUAL ’S 26
181	181	MARYLAND TAXABLE INCO ME UTILIZE THE REVEN UE ATTRIBUTABLE TO T HE 27
182	182	COUNTY INCOME TAX RA TE IN EXCESS OF 3.2% FOR THE FUNDING OF P UBLIC 28
183	183	EDUCATION AND TRANSPO RTATION. 29
184	184
185	185	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 30
186	186	1, 2026, and shall be applicable to all taxable years beginning after December 31, 2026. 31