The segments below provide a brief overview of MACo’s work in the area of tax policy in the 2019 General Assembly.
Follow links for more coverage on Conduit Street and MACo’s Legislative Database.
The General Assembly routinely considers proposals to change tax structures, often seeking to stimulate economic growth, encourage beneficial activities, or attract and retain residents. These proposals often are focused exclusively on the state’s tax structure, but sometimes extend to local revenues as well.
In general, MACo stands for local self-determination. Counties, led by their elected leaders who are directly accountable within the community, are in the best position to make decisions on local affairs – ranging from land use to budget priorities. MACo steadfastly guards this local autonomy, and frequently advocates against statewide solutions that mandate county compliance or otherwise override local decision-making.
Subtraction Modification Bills
As a whole, MACo opposed almost twenty pieces of Income Tax Subtraction Modification legislation. MACo opposed these bills because subtraction modifications applied to the State income tax directly reduce local government revenues. Credits against the state income tax provide a similar benefit to residents without unnecessarily constraining local budgets. None of the income tax subtraction modification bills advanced in this year’s General Assembly.
MACo supported with amendments legislation that would have created a subtraction modification against the state income tax for certain capital grants with amendments. This bill would also have required a local government to grant a property tax credit for investments made within a qualified Opportunity Zone. An amendment was proposed to request a more flexible approach that would authorize local jurisdictions to determine the amount and duration of the property tax credit. This legislation did not move within its committee following the bill hearing.
To learn more about this legislation, please visit MACo’s 2019 Legislative Tracking Overview for Taxes and Revenues.
MACo opposed legislation that would open up property tax savings under the Homestead Property Tax Credit to be “transferrable” to new homebuyers if it is their first time buying a home in Maryland. This could potentially cost counties millions of dollars in revenue, which is needed for essential local services. This legislation did not move forward following its hearing.
State Department of Assessments and Taxation
MACo opposed legislation that would jeopardize local funding for essential services through the possible creation of an uneven method of property tax assessment appeals. The extension of appeal deadlines for property tax assessments would lead to unpredictable revenues and therefore uncertain funding for counties. This legislation did not move out of committee following its hearing.
MACo supported legislation that would simplify the current process for collecting and distributing local recordation and transfer taxes, allowing agencies to avoid administrative complications that have resulted in incomplete distributions. This legislation passed the General Assembly.
MACo opposed legislation to exempt specified solar energy property from the local personal property tax. In lieu of the personal property tax, local governments would have been required to impose an annual fee on the owner or operator of the solar photovoltaic property. This legislation would have resulted in millions of dollars in lost revenues for county governments.
MACo opposed legislation that would deprive counties of using tax sales as a tool for enforcement by requiring counties to enact a law implementing judicial in rem tax foreclosing procedures. Ultimately, MACo offered amendments to remove the judicial in rem tax portion of the bill. The amendments were accepted and the legislation passed both chambers.
MACo supported legislation that would authorize local governments to provide for an installment payment schedule for real property taxes. This legislation would leave the decision to establish an installment schedule in the hands of local governments. This legislation passed both chambers.
Sales and Use Tax
MACo supported amendments to legislation that would require facilitators that coordinate short-term rentals, such as platforms like Airbnb and VRBO, to collect and remit the state sales tax. MACo proposed amendments that would extend the same principle to local taxes in jurisdictions as well. This legislation passed through both chambers without MACo’s proposed amendments.