Maryland 2025 Regular Session

Maryland House Bill HB168 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	hb0168
6	6
7	7	HOUSE BILL 168
8	8	Q1 5lr1499
9	9	HB 1018/24 – W&M (PRE–FILED)
10	10	By: Delegate Qi
11	11	Requested: October 30, 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	Manufacturing Business Personal Property Tax – Exemption 2
20	20
21	21	FOR the purpose of exempting all personal property in the possession of a person engaged 3
22	22	in a manufacturing business that is a small or medium–sized enterprise from the 4
23	23	personal property tax; and generally relating to the personal property tax. 5
24	24
25	25	BY repealing and reenacting, without amendments, 6
26	26	Article – Tax – Property 7
27	27	Section 1–101(a), (r), and (dd) 8
28	28	Annotated Code of Maryland 9
29	29	(2019 Replacement Volume and 2024 Supplement) 10
30	30
31	31	BY repealing and reenacting, with amendments, 11
32	32	Article – Tax – Property 12
33	33	Section 6–104, 7–109(a), 7–222, 7–225, and 7–508 13
34	34	Annotated Code of Maryland 14
35	35	(2019 Replacement Volume and 2024 Supplement) 15
36	36
37	37	BY adding to 16
38	38	Article – Tax – Property 17
39	39	Section 7–225.1 18
40	40	Annotated Code of Maryland 19
41	41	(2019 Replacement Volume and 2024 Supplement) 20
42	42
43	43	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 21
44	44	That the Laws of Maryland read as follows: 22
45	45
46	46	Article – Tax – Property 23
47	47
48	48	1–101. 24 2 HOUSE BILL 168
49	49
50	50
51	51
52	52	(a) In this article the following words have the meanings indicated. 1
53	53
54	54	(r) (1) “Manufacturing” means the process of substantially transforming, or a 2
55	55	substantial step in the process of substantially transforming, tangible personal property 3
56	56	into a new and different article of tangible personal property by use of labor or machinery. 4
57	57
58	58	(2) “Manufacturing” includes: 5
59	59
60	60	(i) the operation of sawmills, grain mills, or feed mills; 6
61	61
62	62	(ii) the operation of machinery and equipment used to extract and 7
63	63	process minerals, metals, or earthen materials or by–products that result from the 8
64	64	extracting or processing; 9
65	65
66	66	(iii) research and development activities, whether or not the company 10
67	67	has a product for sale; 11
68	68
69	69	(iv) the identification, design, or genetic engineering of biological 12
70	70	materials for research or manufacture; and 13
71	71
72	72	(v) the design, development, or creation of computer software for 14
73	73	sale, lease, or license. 15
74	74
75	75	(3) “Manufacturing” does not include: 16
76	76
77	77	(i) activities that are primarily a service; 17
78	78
79	79	(ii) activities that are intellectual, artistic, or clerical in nature; 18
80	80
81	81	(iii) public utility services, including telephone, gas, electric, water, 19
82	82	and steam production services; or 20
83	83
84	84	(iv) any other activity that would not commonly be considered as 21
85	85	manufacturing. 22
86	86
87	87	(dd) “Property tax” means the property tax imposed by: 23
88	88
89	89	(1) the State; 24
90	90
91	91	(2) a county; or 25
92	92
93	93	(3) a municipal corporation. 26
94	94
95	95	6–104. 27
96	96	HOUSE BILL 168 3
97	97
98	98
99	99	Except as otherwise provided in §§ 7–222, 7–225.1, and 7–226 of this article, any 1
100	100	stock in business of a person who engages in a manufacturing or commercial business in 2
101	101	the State is subject to property tax. 3
102	102
103	103	7–109. 4
104	104
105	105	(a) [The] EXCEPT AS PROVIDED IN § 7–225.1 OF THIS TITLE, personal 5
106	106	property described in §§ 7–222, 7–225, and 7–226 of this title is subject to the municipal 6
107	107	corporation property tax unless exempted in full or in part by the governing body of the 7
108	108	municipal corporation by law. 8
109	109
110	110	7–222. 9
111	111
112	112	(a) Except as provided in § 7–109 of this title and in subsection (b) of this section, 10
113	113	the stock in business of a person engaged in a manufacturing or commercial business is not 11
114	114	subject to property tax. 12
115	115
116	116	(b) Except as provided by § 7–108 of this title AND § 7–225.1 OF THIS SUBTITL E, 13
117	117	the personal property described in subsection (a) of this section is subject to a county 14
118	118	property tax on 35% of its assessment in Wicomico County. 15
119	119
120	120	7–225. 16
121	121
122	122	(a) Except as provided in § 7–109 of this title and in subsection (b) of this section, 17
123	123	if used in manufacturing, the following personal property, however operated and whether 18
124	124	or not in use, is not subject to property tax: 19
125	125
126	126	(1) tools; 20
127	127
128	128	(2) implements; 21
129	129
130	130	(3) machinery; or 22
131	131
132	132	(4) manufacturing apparatus or engines. 23
133	133
134	134	(b) Except as provided by § 7–108 of this title AND § 7–225.1 OF THIS SUBTITLE , 24
135	135	the personal property listed in subsection (a) of this section is subject to a county property 25
136	136	tax on: 26
137	137
138	138	(1) 100% of its assessment in Garrett County, Somerset County, Wicomico 27
139	139	County, and Worcester County; and 28
140	140
141	141	(2) 75% of its assessment in Allegany County. 29
142	142
143	143	(c) Property does not qualify for the exemption under this section if the property 30
144	144	is used primarily in administration, management, sales, storage, shipping, receiving, or 31
145	145	any other nonmanufacturing activity. 32 4 HOUSE BILL 168
146	146
147	147
148	148
149	149	(d) In order to qualify for the exemption under this section, a person claiming the 1
150	150	exemption must apply for and be granted the exemption by the Department. 2
151	151
152	152	7–225.1. 3
153	153
154	154	ALL PERSONAL PROPERTY , INCLUDING MANUFACTUR ING INVENTORY , IN THE 4
155	155	POSSESSION OF A PERSON ENGAG ED IN A MANUFACTURIN G BUSINESS THAT IS A 5
156	156	SMALL OR MEDIUM –SIZED ENTERPRISE IS EXEMPT FROM PROPERTY TAX, 6
157	157	INCLUDING ANY SPECIA L TAXING DISTRICT PR OPERTY TAX. 7
158	158
159	159	7–508. 8
160	160
161	161	(a) In this section, “manufacturer” means a person who engages in at least 2 of 9
162	162	the following processes: 10
163	163
164	164	(1) applies labor, skill, art, or science to materials; 11
165	165
166	166	(2) makes changes or modifications in existing material by processes 12
167	167	usually considered as manufacturing; 13
168	168
169	169	(3) develops new forms, qualities, properties, or combinations of materials, 14
170	170	or adapts materials to certain uses; or 15
171	171
172	172	(4) produces from materials a different kind of material with a new use. 16
173	173
174	174	(b) [The] SUBJECT TO § 7–225.1 OF THIS TITLE, THE governing body of 17
175	175	Washington County may exempt the raw materials used in a manufacturing process and 18
176	176	manufactured products in the possession of a manufacturer from the Washington County 19
177	177	property tax. 20
178	178
179	179	SECTION 2. AND BE IT FURTHER ENACTED, That this Act s hall take effect June 21
180	180	1, 2025, and shall be applicable to all taxable years beginning after June 30, 2025. 22
181	181