Legislature Leadership Spearheading Tax Reform Mitigation

House Speaker Michael E. Busch and Senate President Thomas V. Mike Miller Jr. on Tuesday announced a package of bills designed to ease Maryland taxpayers’ increased tax burden resulting from the federal government’s tax reform package. The legislative package includes a proposed expansion of personal exemptions at the state level and a decoupling of the estate tax from the federal system.

Federal tax reform capping state and local tax (SALT) deductions at $10,000 will impact Marylanders more than the residents in any other state. The average SALT deduction claimed in Maryland is $12,931. Senate President Miller said the change results in “double-taxation on the people of Maryland.”

Speaker Busch said the federal law will “take away $680M in exemptions from Maryland.” According to President Miller, the General Assembly will “restore personal exemptions… so that [Marylanders] will continue to get the standard deduction provided under federal law, but on top of that [Marylanders] will be able to claim personal exemptions.”

Delegate James J. “Jimmy” Tarlau will sponsor a bill to decouple the Maryland estate tax from the federal estate tax, which, according to Delegate Tarlau, will protect Maryland from $60 million in lost revenue from an increase in the assets exempt from the federal estate tax.

Governor Larry Hogan has also announced his Administration will propose legislation this session to protect Maryland taxpayers from any negative impacts resulting from federal tax reform.

Stay tuned to Conduit Street for more coverage.

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Previous Conduit Street Coverage: Local Tax Deduction Elimination: “SALT” In Maryland’s Wounds

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