Saturday Marks Beginning For New Tax Laws

While most legislation passed by the General Assembly this past session becomes effective October 1st, a few new tax laws – including a noteworthy income tax deduction bill that will erode both state and county income tax revenues – become effective on July 1st.

Senate Bill 597/House Bill 100, referred to colloquially as the “Hometown Heroes Act” and substantially similar to the Administration’s Senate Bill 322/House Bill 388 of that name, provides for a subtraction modification for the first $15,000 of retirement income for individuals at least 55 years of age who are retired law enforcement officers or fire, rescue, or emergency services personnel. MACo opposed this legislation on the grounds that it would cause local revenues to decrease by $2.5 million in FY 2018 and by $2.8 million in FY 2022. After many years of consideration by the legislature, the bill passed this year and the Governor signed it – making the tax deduction available for the 2017 tax year.  Bill Information | MACo Coverage

A new law repealing the requirement that local governments reimburse the Local Income Tax Reserve Account for overpayments of local income tax revenue distributions made by the Comptroller also goes into effect July 1. Senate Bill 397/House Bill 1433 allows for funds to be drawn from the Account, rather than local government budgets, to rectify errors for which they are not responsible. The Governor signed the bill on May 25. Bill Information | MACo Coverage

In addition, a new law proposed by Comptroller Franchot aimed at protecting taxpayers against fraud and identity theft becomes effective July 1. The Taxpayer Protection Act strengthens the Comptroller’s enforcement powers against fraudulent tax filers. MACo did not take a position on Senate Bill 304/House Bill 424. Bill Information

Dozens of other bills also take effect July 1, including new laws to foster opioid education programs, increase the barrel limit for craft breweries, and ensure state funding for Planned Parenthood in the event that the federal government cuts its own support. The Frederick News-Post covers the slew of new laws going into effect this weekend.