Bill > SB321

This bill is a comprehensive budget reconciliation and financing act for Maryland that makes numerous changes across multiple areas of state government and taxation for fiscal years 2025-2028. Here's a summary of key provisions: This bill makes significant modifications to state taxation, appropriations, and financial regulations. On income taxes, it introduces a new progressive tax rate structure for individuals with higher marginal rates for higher income brackets, increases the standard deduction, and adds a 1% surcharge on net capital gains for taxpayers with adjusted gross income over $350,000. For corporations, it gradually reduces the corporate income tax rate from 8.25% to 7.99% between 2025 and 2028. The bill establishes a combined reporting requirement for corporations engaged in a unitary business, mandating that affiliated corporations file a combined tax return reflecting their aggregate income tax liability starting in 2028. This change aims to prevent tax avoidance and ensure more comprehensive corporate tax reporting. The legislation also modifies various state funds and appropriations, including changes to the Cannabis Regulation and Enforcement Fund, adjusting sales tax rates on cannabis, and creating new funding mechanisms for programs like the Student Loan Debt Relief Tax Credit. It provides the Governor with flexibility to transfer funds between certain state accounts and funds to support the general fund. Additional provisions include adjustments to vehicle registration fees, changes to estate tax calculations, and modifications to various state grant programs and tax credits. The bill also includes several sections allowing the Governor to transfer funds from specific accounts to the General Fund in fiscal years 2025 and 2026. The bill's effective dates vary by section, with most provisions taking effect on June 1, 2025, and specific tax and reporting changes implemented in stages between 2025 and 2028.

Budget and Finance

https://mgaleg.maryland.gov/mgawebsite/Legislation/Details/SB0321?ys=2025RS