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Maryland General Assembly Update

The 2011 regular legislative session of the Maryland General Assembly was relatively quiet as far as changes to tax law are concerned. Nonetheless, there were a few changes of note for businesses and their owners:

  • The sales and use tax on alcoholic beverages will increase from the generally applicable rate of 6% to 9% on July 1, 2011
  • The Maryland Motor Vehicle Administration will not transfer or renew any vehicle registration or renew any driver’s license until the applicant has paid or made acceptable arrangements to pay all undisputed but unpaid state taxes and unemployment insurance contributions owed to the Comptroller or Department of Labor, Licensing, and Registration. This change takes effect on June 1, 2011.
  • Certificates will be available from the Department of Business and Economic Development for tax credits equal to 25% of the costs of film production activities and 27% of the costs of production activities for television series. The Department can award up to $7.5 million in tax credit certificates each year, and the tax credit program ends July 1, 2014.
  • Income tax credits will be available for 20% of the cost of recharging equipment for plug-in hybrid vehicles for tax years 2011 through 2013. The credit is capped at the lesser of $400 per recharging station or amount of the taxpayer’s income tax for the tax year. Individuals may claim the credit for no more than one recharging system and business entities can claim credits for up to 30 recharging systems. Certificates for the credit will be awarded by the Maryland Energy Administration, which may issue certificates for credits of up to $400,000 for 2011, $500,000 for 2012, and $600,000 for 2013.

Governor O’Malley has not yet signed these bills into law but they are not expected to be vetoed.

Further changes to Maryland tax law may be on the horizon. A special session of the General Assembly is scheduled for this fall for the primary purpose of redistricting; however, an expanded agenda has been proposed to address reduction of the structural deficit and funding transportation needs.

For more information, please contact Jeremy Garner at garner@bowie-jensen.com.

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