Bill > HB151

This bill modifies Maryland's county income tax regulations by increasing the maximum county income tax rate from 3.20% to 3.7% and establishing new rules for income tax brackets. Counties will now be allowed to set income tax rates using up to eight income brackets for different taxpayer categories (individuals and joint filers/heads of household), with specific income threshold ranges defined in the bill. For individual taxpayers, the brackets range from $1 to over $1,000,000 in Maryland taxable income, while joint filers/heads of household have brackets from $1 to over $1,250,000. The bill permits counties to set a tax rate higher than 3.2%, but only on taxable income exceeding $250,000 for individuals and $300,000 for joint filers/heads of household. Notably, the legislation includes language suggesting that counties should use any revenue from tax rates above 3.2% to fund public education and transportation. Counties must still follow existing procedures for changing tax rates, such as holding public hearings and providing public notice, and can only change rates in one-hundredth of a percentage point increments. The bill will take effect on July 1, 2026, and apply to taxable years beginning after December 31, 2026.

Budget and Finance

https://mgaleg.maryland.gov/mgawebsite/Legislation/Details/HB0151?ys=2025RS