State Legislative Summaries

House Bill 0001 – Constitutional Amendment – Cannabis – Adult Use and Possession

This bill places a proposed State constitutional amendment on the November 2022 ballot. If the voters of the State approve, the amendment would allow individuals who are at least 21 years old to use and possess cannabis, beginning July 1, 2023. The amendment also authorizes the General Assembly to enact laws providing for the use, distribution, possession, regulation, and taxation of cannabis.

House Bill 0837 – Cannabis Reform

For all taxable years beginning after December 31, 2021, this bill allows individuals and corporations to subtract from their federal adjusted gross income or federal taxable income the amount of ordinary and necessary expenses incurred during the taxable year in carrying on a trade or business as a medical cannabis grower, processor, dispensary, or any other cannabis establishment licensed by the State, if federal law continues to disallow cannabis business deductions.

House Bill 0186 – Income Tax – Subtraction Modification for Centenarians

This bill allows an individual who is at least 100 years of age to subtract up to $100,000 of income from their federal adjusted gross income in order to determine their Maryland adjusted gross income.

Senate Bill 0541 – Natural Resources – Maryland Park Service and State Parks – Alterations (Great Maryland Outdoors Act)

This bill expands the existing pension exclusion for correctional officers, law enforcement officers, and fire, rescue, and emergency services personnel to include forest rangers, park rangers, and wildlife rangers.

Senate Bill 0405 / House Bill 1468 – Income Tax – Retirement Income Subtraction Modifications and Senior Credit (Retirement Tax Elimination Act of 2022)

The Retirement Tax Elimination Act of 2022 (the “Act”) retains the subtraction of up to $15,000 allowed for retired correctional officers, law enforcement officers, or fire, rescue, or emergency services personnel of the United States, the State, or a political subdivision of the State who are at least 55 years old. The Act also retains the subtraction (aka the pension exclusion) allowed for individuals who are at least 65 years old and those who are totally disabled or have a totally disabled spouse by allowing a subtraction for all income from an employee retirement system included in federal adjusted gross income (“FAGI”) up to the maximum annual benefit under the Social Security Act. Additionally, the Act allows State residents who are at least 65 years old to claim certain nonrefundable credits.

Senate Bill 0093 – Tax Credits – Employment of Individuals With Disabilities

This bill increases the tax credit available to employers for wages paid to qualified employees with a disability and childcare provided or paid for by a business entity for the children of a qualified employee with a disability. Employers are allowed a credit of 30% of up to the first $15,000 of wages paid during each of the first two years of employment, including employees employed for less than 1 year because the employee terminates employment with the employer to take another job. A business entity may take a credit of up to $1,500 of qualified childcare or transportation expenses incurred for each of the first two years of employment.

Senate Bill 0196 - Economic Development - Research and Development Tax Credit - Alterations

This bill extends the termination date for the research and development tax credit to June 30, 2025. The bill also alters the tax credit by (1) eliminating the basic credit; (2) increasing to $12 million the amount of growth tax credits that can be awarded in each tax year; (3) requiring the Department of Commerce to set aside $3.5 million of the total tax credits awarded annually to qualified small businesses; (4) limiting to $250,000 the maximum value of the tax credit; (5) defining net book assets for the purpose of determining small business eligibility; and (6) establishing the purpose of the program.

House Bill 0002 / Senate Bill 0598 – Income Tax – Work Opportunity Tax Credit

These cross-filed bills create a nonrefundable credit against the State income tax for up to 50% of the federal Work Opportunity Tax Credit claimed by an employer with respect to a qualified individual who is employed in the State. Any unused amount of the credit may not be carried forward to any other tax year. The existing subtraction for salary or wages paid for targeted jobs is reduced by the amount of the new credit claimed. Organizations exempt from taxation under IRC § 501(c) may apply the new credit as a credit toward employee withholding. The Department of Legislative Services must evaluate the tax credit program and report its findings to the General Assembly by December 31, 2028.

Senate Bill 0210 – Tax Credits – Employer-Provided Commuter Benefits – Expansion and Administration

This bill expands the existing tax credit for employer-provided commuter benefits to cover subsidies for employees for the cost of “active transportation” (i.e., walking, bicycling, or scootering, and the equipment and gear associated with them), carpooling (including E-ZPass and toll fees, parking fees, and other costs), and teleworking (including prorated costs for internet service, computer and telephone equipment, software, and membership in co-working spaces and telework centers). This bill also alters the procedure by which an employer must claim the credit.

House Bill 0641 / Senate Bill 0597 – Income Tax – Theatrical Production Tax Credit

These cross-filed bills create a refundable credit against the State income tax for 25% of qualified theatrical production costs incurred in the State. The Department of Commerce is required to administer the credit and may award a maximum of $5 million in credits in each fiscal year and a maximum of $2 million for a single theatrical production.

Senate Bill 0215 – Energy Storage Systems – Income Tax Credit and Grant Program

This bill extends the energy storage system income tax credit through calendar year 2024. It also replaces the tax credit with an energy storage system grant program administered by the Maryland Energy Administration beginning January 1, 2025.

House Bill 0478 – Economic Development – Enterprise Zone Program – Alterations

This bill alters the Enterprise Zone program by (1) terminating it effective January 1, 2030; (2) altering the authority of the Secretary of Commerce to designate areas as enterprise zones; (3) altering the definitions of “focus area employee” and “qualified employee” for the income tax credit; and (4) altering certain eligibility and reporting requirements.

Senate Bill 0536 – Income Tax – Film Production Activity Tax Credit – Digital Animation Projects

This bill adds a definition for digital animation project and adds digital animation project to the list of film production activities which qualify for the income tax credit. The bill also alters the list of items not considered a film production activity, excluding a digital project or animation project that is not a digital animation project.

Senate Bill 0316 / House Bill 0282 – Sales and Use Tax – Diapers and Baby Products – Exemption

These cross-filed bills provide an exemption for diapers, baby wipes, and diaper rash cream from the state sales tax. The Senate bill also exempts baby bottles, baby bottle nipples, and infant car seats.

House Bill 0288 – Sales and Use Tax – Baby Products – Exemption

This bill provides an exemption for baby bottles, baby bottle nipples, and infant car seats from the state sales tax.

Senate Bill 0571 / House Bill 0492 – Sales and Use Tax – Oral Hygiene Products – Exemption

These cross-filed bills provide an exemption for toothbrushes, toothpaste, tooth powders, mouthwash, dental floss, or similar oral hygiene products from the state sales tax.

House Bill 0364 / Senate Bill 0488 – Sales and Use Tax – Medical Devices – Exemption

These cross-filed bills provide an exemption for medical or clinical thermometers, pulse oximeters, blood pressure monitors, and filtering facepiece respirators (including N-95 and K-95 masks) from the state sales tax. The Senate bill further exempts diabetic care items including insulin, glucose tablets, glucose drinks, glucose gels, blood and urine ketone meters and supplies, insulin pumps, insulin pump infusion sets, insulin pump reservoirs or cartridges, continuous glucose monitors and related supplies, syringes, insulin injection devices, insulin pens, insulin pen needles, lancets and lancet devices, and testing strips for measuring blood sugar.

House Bill 1151 – Sales and Use Tax – Diabetic Care Product – Exemption

This bill provides an exemption from the state sales tax for diabetic care supplies including: insulin, glucose tablets, glucose drinks, glucose gels, blood and urine ketone meters and supplies, insulin pumps, insulin pump infusion sets, insulin pump reservoirs or cartridges, continuous glucose monitors and related supplies, syringes, insulin injection devices, insulin pens, insulin pen needles, lancets and lancet devices, and testing strips for measuring blood sugar.

House Bill 0791 / Senate Bill 0723 – Sales and Use Tax – Digital Product – Definition

These cross-filed bills update the definition of digital products to explicitly exclude:

1. Products used solely for commercial purposes including advertising and other marketing activities where the purchaser holds a copyright or other intellectual property interest; and
2. Computer software or software as a service purchased or licensed solely for commercial purposes in an enterprise computer system including operating programs or application software for the exclusive use of the enterprise software system that is housed or maintained by the purchaser or on a cloud server whether hosted by the purchaser, the software vendor, or a third party.

House Bill 0897 – Economic Development – Sports Entertainment Facilities and Events, Prince George's County Blue Line Corridor Facilities, and Racing Facilities

This departmental bill authorizes the Maryland Stadium Authority (MSA) to issue up to $200.0 million in bonds for “sports entertainment facilities,” and up to $400.0 million in bonds for Prince George’s County Blue Line Corridor (BLC) facilities, subject to specified requirements. The bill establishes three funds and the Major Sports and Entertainment Event Program (MSEEP) in MSA, along with a bus rapid transit system grant program in the Maryland Department of Transportation (MDOT), all of which are funded by State Lottery Fund distributions. The bill also exempts construction material purchased for specified projects from the sales and use tax, subject to specified requirements. Finally, the bill establishes reporting requirements and legislative intent relating to Laurel Park and Pimlico racing facilities.

House Bill 0366 / Senate Bill 0477 – Office of the Comptroller – Legal Division and Private Letter Ruling Procedures

This bill establishes a legal division in the Comptroller’s Office to (1) provide expanded and detailed tax guidance to taxpayers and (2) perform other duties relating to private letter rulings (“PLRs”) as assigned by the Comptroller. A PLR is defined as a written determination issued by the Comptroller on the application of tax laws and regulations to a specific set of facts that is intended to apply only to that specific set of facts. The Comptroller must issue specified PLRs on the written request of a person, except under specified circumstances. The Comptroller must provide the requestor of a PLR with written reasons for the denial and to do so within 60 days of the request submission when denying a PLR request.

Senate Bill 0369 / House Bill 0252 – Income Tax – Maryland Earned Income Tax Credit Assistance Program for Low-Income Families

This bill establishes the Maryland Earned Income Tax Credit Assistance Program for Low-Income Families. The Comptroller’s Office must (1) identify Maryland residents who are eligible for the State earned income credit but did not claim the tax credit; (2) establish a streamlined mechanism by which eligible taxpayers may claim the credit; and (3) notify eligible taxpayers of the program.

Senate Bill 0272 – Disclosure of Tax Information – Fraud Identification, Prevention, or Response

This bill expands the list of people able to receive tax information to include any person or governmental entity specified in writing by the Comptroller for the purpose of identifying, preventing, or responding to fraud. The tax information must be anonymized to the extent possible consistent with the information’s intended use and subject to any protections or safeguards the Comptroller includes in the written authorization. This will allow the state to participate in multi-state anti-fraud efforts like that of the Identity Theft Tax Refund Fraud Information Sharing and Analysis Center.

Senate Bill 0275 – Labor and Employment – Family and Medical Leave Insurance Program – Establishment (Time to Care Act of 2022)

This bill establishes the Family and Medical Leave Insurance Program (“FMLIP”) in the Maryland Department of Labor. The purpose of FMLIP is to provide temporary benefits to a covered individual who is taking leave from employment to care for a new child, to care for a family member with a serious health condition, because the covered individual has a serious health condition, to care for a service member who is the covered individual’s next of kin, or because the covered individual has a qualifying exigency arising out of the deployment of a service member who is a family member.

Senate Bill 0929 – Admissions and Amusement Tax – Sports Wagering – Prohibition

This bill prohibits the admissions and amusement tax from being imposed on any proceeds from sports wagering.