MD
Maryland Senate Bill SB295

Maryland 2025 Regular Session

Maryland Senate Bill SB295 Compare Versions

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33 EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
44 [Brackets] indicate matter deleted from existing law.
5- Underlining indicates amendments to bill.
6- Strike out indicates matter stricken from the bill by amendment or deleted from the law by
7-amendment.
85 *sb0295*
96
107 SENATE BILL 295
118 Q3 5lr0826
12- CF HB 634
9+ CF 5lr2089
1310 By: Senator McCray
1411 Introduced and read first time: January 10, 2025
1512 Assigned to: Education, Energy, and the Environment
16-Reassigned: Budget and Taxation, January 13, 2025
17-Committee Report: Favorable
18-Senate action: Adopted
19-Read second time: January 31, 2025
2013
21-CHAPTER ______
14+A BILL ENTITLED
2215
2316 AN ACT concerning 1
2417
2518 Income Tax – Income Tax Reconciliation Program – Established 2
2619 (Maryland Fair Taxation for Justice–Involved Individuals Act) 3
2720
2821 FOR the purpose of establishing the Income Tax Reconciliation Program in the State to 4
2922 allow certain justice–involved individuals to establish payment plans and receive a 5
3023 waiver of any interest and penalties that accrue for unpaid income tax due for certain 6
3124 taxable years; requiring the Comptroller to administer the Program and waive 7
3225 certain interest and penalties for participants in the Program; requiring the 8
3326 Comptroller, in collaboration with the Department of Public Safety and Correctional 9
3427 Services, to develop an awareness campaign to inform the public and 10
3528 justice–involved individuals about the Program; and generally relating to the Income 11
3629 Tax Reconciliation Program for justice–involved individuals. 12
3730
3831 BY adding to 13
3932 Article – Criminal Procedure 14
4033 Section 6–237 15
4134 Annotated Code of Maryland 16
4235 (2018 Replacement Volume and 2024 Supplement) 17
4336
4437 BY adding to 18
4538 Article – Tax – General 19
4639 Section 2–120 20
4740 Annotated Code of Maryland 21
48- (2022 Replacement Volume and 2024 Supplement) 22 2 SENATE BILL 295
41+ (2022 Replacement Volume and 2024 Supplement) 22
42+
43+BY repealing and reenacting, without amendments, 23
44+ Article – Tax – General 24
45+Section 13–604 and 13–701(a) 25
46+ Annotated Code of Maryland 26
47+ (2022 Replacement Volume and 2024 Supplement) 27
48+ 2 SENATE BILL 295
4949
5050
51-
52-BY repealing and reenacting, without amendments, 1
51+BY repealing and reenacting, with amendments, 1
5352 Article – Tax – General 2
54-Section 13–604 and 13–701(a) 3
53+Section 13–606 and 13–714 3
5554 Annotated Code of Maryland 4
5655 (2022 Replacement Volume and 2024 Supplement) 5
5756
58-BY repealing and reenacting, with amendments, 6
59- Article – Tax – General 7
60-Section 13–606 and 13–714 8
61- Annotated Code of Maryland 9
62- (2022 Replacement Volume and 2024 Supplement) 10
57+ SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 6
58+That the Laws of Maryland read as follows: 7
6359
64- SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 11
65-That the Laws of Maryland read as follows: 12
60+Article – Criminal Procedure 8
6661
67-Article – Criminal Procedure 13
62+6–237. 9
6863
69-6–237. 14
64+ WHEN A DEFENDANT IS C ONVICTED OF OR PLEAD S GUILTY TO A CRIME AND IS 10
65+SENTENCED TO A TERM OF IMPRISONMENT OF A T LEAST 6 MONTHS BUT NOT MORE 11
66+THAN 10 YEARS, THE COURT SHALL INFORM THE DEFENDANT ABOUT THE INCOME 12
67+TAX RECONCILIATION PROGRAM ESTABLISHED U NDER § 2–120 OF THE TAX – 13
68+GENERAL ARTICLE. 14
7069
71- WHEN A DEFENDANT IS C ONVICTED OF OR PLEAD S GUILTY TO A CRIME AND IS 15
72-SENTENCED TO A TERM OF IMPRISONMENT OF A T LEAST 6 MONTHS BUT NOT MORE 16
73-THAN 10 YEARS, THE COURT SHALL INFORM THE DEFENDANT ABOUT THE INCOME 17
74-TAX RECONCILIATION PROGRAM ESTABLISHED U NDER § 2–120 OF THE TAX – 18
75-GENERAL ARTICLE. 19
70+Article – Tax – General 15
7671
77-Article – Tax – General 20
72+2–120. 16
7873
79-2–120. 21
74+ (A) (1) IN THIS SECTION THE FOLLOWING WORDS HAVE THE MEANINGS 17
75+INDICATED. 18
8076
81- (A) (1) IN THIS SECTION THE FOLLOWING WORDS HAVE THE MEANINGS 22
82-INDICATED. 23
77+ (2) “JUSTICE–INVOLVED INDIVIDUAL” MEANS AN INDIVIDUAL WHO IS 19
78+CONVICTED OF OR PLEA DS GUILTY TO A CRIME AND IS CURRENTLY SERVING OR , 20
79+WITHIN THE IMMEDIATE LY PRECEDING 2 YEARS, HAS BEEN RELEASED AFTER 21
80+SERVING A TERM OF IMPRISONME NT OF AT LEAST 6 MONTHS BUT NOT MORE THAN 22
81+10 YEARS IN A STATE OR FEDERAL CORR ECTIONAL FACILITY . 23
8382
84- (2) “JUSTICE–INVOLVED INDIVIDUAL” MEANS AN INDIVIDUAL WHO IS 24
85-CONVICTED OF OR PLEA DS GUILTY TO A CRIME AND IS CURRENTLY SERVING OR , 25
86-WITHIN THE IMMEDIATE LY PRECEDING 2 YEARS, HAS BEEN RELEASED AFTER 26
87-SERVING A TERM OF IMPRISONME NT OF AT LEAST 6 MONTHS BUT NOT MORE THAN 27
88-10 YEARS IN A STATE OR FEDERAL CORR ECTIONAL FACIL ITY. 28
83+ (3) “PROGRAM” MEANS THE INCOME TAX RECONCILIATION 24
84+PROGRAM. 25
8985
90- (3) “PROGRAM” MEANS THE INCOME TAX RECONCILIATION 29
91-PROGRAM. 30
86+ (B) THERE IS AN INCOME TAX RECONCILIATION PROGRAM IN THE STATE 26
87+THAT IS ADMINISTERED BY T HE COMPTROLLER . 27
9288
93- (B) THERE IS AN INCOME TAX RECONCILIATION PROGRAM IN THE STATE 31
94-THAT IS ADMINISTERED BY THE COMPTROLLER . 32
89+ (C) THE PURPOSE OF THE PROGRAM IS TO ALLOW JUSTICE–INVOLVED 28
90+INDIVIDUALS WHO ARE UNABLE TO FILE A STATE INCOME TAX RETURN WH ILE 29
91+INCARCERATED TO: 30
9592 SENATE BILL 295 3
9693
9794
98- (C) THE PURPOSE OF THE PROGRAM IS TO ALLOW JUSTICE–INVOLVED 1
99-INDIVIDUALS WHO ARE UNABLE TO FILE A STATE INCOME TAX RETURN WH ILE 2
100-INCARCERATED TO: 3
95+ (1) SUBJECT TO SUBSECTIO N (D) OF THIS SECTION , ESTABLISH 1
96+INSTALLMENT PAYMENT PLANS TO PAY ANY UNPAID INCOME TAX TH AT IS DUE FOR 2
97+ANY TAXABLE YEAR DURING WHICH THE INDIVIDUAL IS INCARCERATED ; AND 3
10198
102- (1) SUBJECT TO SUBSECTIO N (D) OF THIS SECTION , ESTABLISH 4
103-INSTALLMENT PAYMENT PLANS TO PAY ANY UNPAID INCOME TAX TH AT IS DUE FOR 5
104-ANY TAXABLE YEAR DURING WHICH THE INDIVIDUAL IS INCARCERATED ; AND 6
99+ (2) IF APPROVED FOR A N INSTALLMENT PAYMENT PLAN , RECEIVE A 4
100+WAIVER FOR ANY INTEREST AND PENALTI ES THAT ACCRUE ON THE UNPAID INCOME 5
101+TAX. 6
105102
106- (2) IF APPROVED FOR A N INSTALLMENT PAYMENT PLAN , RECEIVE A 7
107-WAIVER FOR ANY INTEREST AND PENALTI ES THAT ACCRUE ON THE UNPAID INCOME 8
108-TAX. 9
103+ (D) (1) FOR ANY TAXABLE YEAR THAT BEGINS AFTER DECEMBER 31, 7
104+2024, BUT BEFORE JANUARY 1, 2030, A JUSTICE–INVOLVED INDIVIDUAL WHO 8
105+RECEIVES A NOTICE OF ASSESSMENT OF INCOME TAX DUE FOR A TAXABL E YEAR 9
106+DURING WHICH THE IND IVIDUAL IS INCARCERA TED MAY APPLY TO THE 10
107+COMPTROLLER FOR AN INSTALLMENT PAYMENT PLAN . 11
109108
110- (D) (1) FOR ANY TAXABLE YEAR THAT BEGINS AFTER DECEMBER 31, 10
111-2024, BUT BEFORE JANUARY 1, 2030, A JUSTICE–INVOLVED INDIVIDUAL WHO 11
112-RECEIVES A NOTICE OF ASSESSMENT OF INCOME TAX DUE FOR A TAXABL E YEAR 12
113-DURING WHICH THE IND IVIDUAL IS INCARCERA TED MAY APPLY TO THE 13
114-COMPTROLLER FOR AN INSTALLMENT PAYMENT PLAN . 14
109+ (2) IF THE COMPTROLLER DETERMINE S THAT THE 12
110+JUSTICE–INVOLVED INDIVIDUAL IS ELIGIBLE TO PARTI CIPATE IN THE PROGRAM, 13
111+THE COMPTROLLER SHALL EST ABLISH AN INSTALLMEN T PAYMENT PLAN THAT 14
112+ALLOWS THE INDIVIDUA L TO PAY THE UNPAID INCOME TAX OVER A PE RIOD NOT 15
113+EXCEEDING 10 YEARS. 16
115114
116- (2) IF THE COMPTROLLER DETERMINE S THAT THE 15
117-JUSTICE–INVOLVED INDIVIDUAL IS ELIGIBLE TO PARTI CIPATE IN THE PROGRAM, 16
118-THE COMPTROLLER SHALL EST ABLISH AN INSTALLMEN T PAYMENT PLAN THAT 17
119-ALLOWS THE INDIVIDUA L TO PAY THE UNPAID INCOME TAX OVER A PE RIOD NOT 18
120-EXCEEDING 10 YEARS. 19
115+ (3) IF A JUSTICE–INVOLVED IN DIVIDUAL IS APPROVED FOR A N 17
116+INSTALLMENT PAYMENT PLAN UNDER T HE PROGRAM, THE COMPTROLLER SHALL 18
117+WAIVE ANY INTEREST AND PENALTI ES THAT ACCRUE ON THE UNPAID INCOME TAX 19
118+DUE. 20
121119
122- (3) IF A JUSTICE–INVOLVED I NDIVIDUAL IS APPROVED FOR A N 20
123-INSTALLMENT PAYMENT PLAN UNDER T HE PROGRAM, THE COMPTROLLER SHALL 21
124-WAIVE ANY INTEREST AND PENALTI ES THAT ACCRUE ON THE UNPAID INCOME TAX 22
125-DUE. 23
120+ (E) (1) TO CARRY OUT THE PROGRAM, THE COMPTROLLER SHALL : 21
126121
127- (E) (1) TO CARRY OUT THE PROGRAM, THE COMPTROLLER SHALL : 24
122+ (I) IN COLLABORATION WIT H THE DEPARTMENT OF PUBLIC 22
123+SAFETY AND CORRECTIONAL SERVICES, DEVELOP AN AWARENESS CAMPAIGN TO 23
124+INFORM THE PU BLIC AND JUSTICE –INVOLVED INDIVIDUALS ABOUT THE PROGRAM; 24
125+AND 25
128126
129- (I) IN COLLABORATION WIT H THE DEPARTMENT OF PUBLIC 25
130-SAFETY AND CORRECTIONAL SERVICES, DEVELOP AN AWARENESS CAMPAIGN TO 26
131-INFORM THE PU BLIC AND JUSTICE –INVOLVED INDIVIDUALS ABOUT THE PROGRAM; 27
132-AND 28
127+ (II) ADOPT REGULATIONS . 26
133128
134- (II) ADOPT REGULATIONS . 29
129+ (2) THE REGULATIONS REQUIRED UNDER PARAGRAPH (1)(II) OF THIS 27
130+SUBSECTION MAY INCLU DE INCOME LIMITATION S THAT ESTABLISH ELI GIBILITY 28
131+FOR THE PROGRAM. 29
135132
136- (2) THE REGULATIONS REQUIRED UNDER PARAGRAPH (1)(II) OF THIS 30
137-SUBSECTION MAY INCLU DE INCOME LIMITATION S THAT ESTABLISH ELI GIBILITY 31
138-FOR THE PROGRAM. 32
133+ (F) ON OR BEFORE DECEMBER 1, 2026, AND EACH DECEMBER 1 30
134+THEREAFTER , THE COMPTROLLER SHALL REPORT TO THE GENERAL ASSEMBLY, IN 31
135+ACCORDANCE WITH § 2–1257 OF THE STATE GOVERNMENT ARTICLE, ON THE 32
136+IMPACT OF THE PROGRAM. 33
139137 4 SENATE BILL 295
140138
141139
142- (F) ON OR BEFORE DECEMBER 1, 2026, AND EACH DECEMBER 1 1
143-THEREAFTER , THE COMPTROLLER SHALL REPORT TO THE GENERAL ASSEMBLY, IN 2
144-ACCORDANCE WITH § 2–1257 OF THE STATE GOVERNMENT ARTICLE, ON THE 3
145-IMPACT OF THE PROGRAM. 4
140+13–604. 1
146141
147-13–604. 5
142+ (a) The rate of interest for each month or fraction of a month is the percent equal 2
143+to one–twelfth of the annual interest rate that the Comptroller sets for the calendar year 3
144+under subsection (b) of this section. 4
148145
149- (a) The rate of interest for each month or fraction of a month is the percent equal 6
150-to one–twelfth of the annual interest rate that the Comptroller sets for the calendar year 7
151-under subsection (b) of this section. 8
146+ (b) On or before October 1 of each year, the Comptroller shall set the annual 5
147+interest rate for the next calendar year on refunds and money owed to the State as the 6
148+percent that equals the greater of: 7
152149
153- (b) On or before October 1 of each year, the Comptroller shall set the annual 9
154-interest rate for the next calendar year on refunds and money owed to the State as the 10
155-percent that equals the greater of: 11
150+ (1) (i) 13% for 2016; 8
156151
157- (1) (i) 13% for 2016; 12
152+ (ii) 12% for 2017; 9
158153
159- (ii) 12% for 2017; 13
154+ (iii) 11.5% for 2018; 10
160155
161- (iii) 11.5% for 2018; 14
156+ (iv) 11% for 2019; 11
162157
163- (iv) 11% for 2019; 15
158+ (v) 10.5% for 2020; 12
164159
165- (v) 10.5% for 2020; 16
160+ (vi) 10% for 2021; 13
166161
167- (vi) 10% for 2021; 17
162+ (vii) 9.5% for 2022; and 14
168163
169- (vii) 9.5% for 2022; and 18
164+ (viii) 9% for 2023 and each year thereafter; or 15
170165
171- (viii) 9% for 2023 and each year thereafter; or 19
166+ (2) 3 percentage points above the average prime rate of interest quoted by 16
167+commercial banks to large businesses during the State’s previous fiscal year, based on 17
168+determination by the Board of Governors of the Federal Reserve Bank. 18
172169
173- (2) 3 percentage points above the average prime rate of interest quoted by 20
174-commercial banks to large businesses during the State’s previous fiscal year, based on 21
175-determination by the Board of Governors of the Federal Reserve Bank. 22
170+13–606. 19
176171
177-13–606. 23
172+ (A) For reasonable cause, a tax collector may waive interest on unpaid tax. 20
178173
179- (A) For reasonable cause, a tax collector may waive interest on unpaid tax. 24
174+ (B) THE COMPTROLLER SHALL WAI VE THE AMOUNT OF ANY INTEREST 21
175+ASSESSED ON UNPAID I NCOME TAX DUE UNDER THIS ARTIC LE IF: 22
180176
181- (B) THE COMPTROLLER SHALL WAI VE THE AMOUNT OF ANY INTEREST 25
182-ASSESSED ON UNPAID I NCOME TAX DUE UNDER THIS ARTIC LE IF: 26
177+ (1) THE UNPAID INCOME TAX IS DUE FOR A TAXABLE YEAR DURING 23
178+WHICH THE PERSON OWING IS INCARCERATE D; AND 24
183179
184- (1) THE UNPAID INCOME TAX IS DUE FOR A TAXABLE YEAR DURING 27
185-WHICH THE PERSON OWING IS INCARCERATE D; AND 28
180+ (2) THE PERSON APPLIES FOR AND IS PLACED ON A N INSTALLMENT 25
181+PAYMENT PLAN UNDER T HE INCOME TAX RECONCILIATION PROGRAM 26
182+ESTABLISHED UNDER § 2–120 OF THIS ARTICLE. 27
183+
184+13–701. 28
186185 SENATE BILL 295 5
187186
188187
189- (2) THE PERSON APPLIES FOR AND IS PLACED ON A N INSTALLMENT 1
190-PAYMENT PLAN UNDER T HE INCOME TAX RECONCILIATION PROGRAM 2
191-ESTABLISHED UNDER § 2–120 OF THIS ARTICLE. 3
188+ (a) Except as otherwise provided in this subtitle, if a person or governmental unit 1
189+fails to pay a tax when due under this article, the tax collector shall assess a penalty not 2
190+exceeding 10% of the unpaid tax. 3
192191
193-13–701. 4
192+13–714. 4
194193
195- (a) Except as otherwise provided in this subtitle, if a person or governmental unit 5
196-fails to pay a tax when due under this article, the tax collector shall assess a penalty not 6
197-exceeding 10% of the unpaid tax. 7
194+ (A) For reasonable cause, a tax collector may waive a penalty under this subtitle. 5
198195
199-13–714. 8
196+ (B) THE COMPTROLLER SHALL WAIVE A NY PENALTY UNDER THIS S UBTITLE 6
197+FOR A PERSON’S FAILURE TO PAY INCOM E TAX WHEN DUE UNDER THIS ARTICLE IF: 7
200198
201- (A) For reasonable cause, a tax collector may waive a penalty under this subtitle. 9
199+ (1) THE UNPAID INCOME TAX IS DUE FOR A TAXABLE YE AR DURING 8
200+WHICH THE PERSON OWING IS INCARCERATED ; AND 9
202201
203- (B) THE COMPTROLLER SHALL WAIVE A NY PENALTY UNDER THIS S UBTITLE 10
204-FOR A PERSON’S FAILURE TO PAY INCOM E TAX WHEN DUE UNDER THIS ARTICLE IF: 11
202+ (2) THE PERSON APPLIES FOR AND IS PLACED ON A N INSTALLMENT 10
203+PAYMENT PLAN UNDER THE INCOME TAX RECONCILIATION PROGRAM 11
204+ESTABLISHED UNDER § 2–120 OF THIS ARTICLE. 12
205205
206- (1) THE UNPAID INCOME TAX IS DUE FOR A TAXABLE YE AR DURING 12
207-WHICH THE PERSON OWING IS INCARCERATED ; AND 13
208-
209- (2) THE PERSON APPLIES FOR AND IS PLACED ON A N INSTALLMENT 14
210-PAYMENT PLAN UNDER THE INCOME TAX RECONCILIATION PROGRAM 15
211-ESTABLISHED UNDER § 2–120 OF THIS ARTICLE. 16
212-
213- SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 17
214-1, 2025. 18
215-
216-
217-
218-Approved:
219-________________________________________________________________________________
220- Governor.
221-________________________________________________________________________________
222- President of the Senate.
223-________________________________________________________________________________
224- Speaker of the House of Delegates.
206+ SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 13
207+1, 2025. 14