Subject to Change:
The list of new taxes unveiled yesterday, along with some budget cuts, is designed to cover the projected $3 billion deficit in the 2026 budget (Maryland Education Act).
- There is a 3% sales tax on data and IT services for anyone using them.
- A 2% surcharge on capital gains income over $350,000. This tax would land in the State’s general fund, with 40% marked for the State’s Transportation Fund.
- Two new tax brackets will be created: Those earning more than $500,000 to $1 million will pay 6.25%, and those earning over $1 million will be taxed at 6.50%.
- The maximum piggyback income tax rate for local governments is 3.3%.
- Adding a 6% sales tax to vending machine purchases.
- Repealing an exemption for sales of coins and bullion over $1,000 and the exemption for sales of photographic and artistic material used in advertising.
- Increasing the tax rate on sports wagering from 15 to 20%.
- The sale of cannabis will increase from 9% to 12%.
- The excise tax on vehicles increased from 6% to 6.8%, and vehicle emission fees increased from $14.00 to $30.00. Vehicles eligible for historic tags will be defined as those older than the 1999 model year.
- A 3.5% tax rate on short-term rentals.
- Doubles the titling fee on new and used cars to $200.
The House and Senate are expected to agree to this framework before the session ends on April 7th.
