The Maryland Department of Legislative Services' Guide to Local Government Taxing Authority provides a county-by-county breakdown of each jurisdiction's tax landscape and the tools available to support local governance and community development.
The guide includes each county's powers and limitations in imposing property, income, recordation, transfer, and other taxes and fees. The report also highlights various tax credits available to residents, businesses, and developers to promote economic growth, historic preservation, environmental sustainability, and more.
Types of Taxes
- Property Taxes: The guide explains how property taxes are assessed and collected, including details on caps, exemptions, and deferrals. It covers specific rules for homestead credits, property tax deferral programs for older and disabled residents, and provisions for collecting overdue taxes.
- Recordation and Transfer Taxes: The report outlines the authority and procedures for imposing recordation and transfer taxes on property transactions. It details the specific exemptions and rates applicable in each county.
- Other Taxes/Fees: The guide includes information on other taxes and fees that local governments may impose, such as admissions and amusement taxes, hotel rental taxes, and development impact fees. These revenues often fund specific local projects or services.
Tax Credits
- Economic Development Incentives: The guide details tax credits to encourage economic development, like credits for new and expanding businesses that create jobs or invest in local infrastructure.
- Environmental and Historic Preservation: Several tax credits are available for projects promoting environmental sustainability, such as installing clean energy systems and restoring historic properties.
- Homeowner and Resident Support: The report covers tax credits designed to support specific resident groups, including credits for low-income homeowners, disabled veterans, and older residents. It also highlights incentives for homeowners who make substantial improvements to their properties.
Special Taxing Districts
- The guide explains creating and managing special taxing districts: designated areas with additional tax leviesd to fund specific local projects, such as infrastructure improvements or enhanced public services. These districts often have unique rules and funding mechanisms.
Miscellaneous Provisions
- Tax Sales and Liens: The guide outlines the procedures for tax sales and the legal processes, interest rates, and redemption rights associated with the tax sale process.
- Payment in Lieu of Taxes (PILOT) Programs: The report includes provisions for PILOT agreements, which allow specified entities, like nonprofit organizations, to make payments instead of standard property taxes. These agreements often support community services or development projects.
Exemptions and Limitations
- The guide also details various exemptions from local taxes, including those for manufacturing equipment, nonprofit organizations, and specified property types. It provides an overview of the statutory limitations on the types of taxes that local governments can impose.
County Government Structure
The authority of Maryland counties primarily comes from the State, as delegated through the Local Government Article of the Maryland Code. This delegation grants counties the powers needed to govern effectively and provide essential public services, particularly in maintaining public safety.
Maryland's counties operate under three distinct forms of government: commissioner, code home rule, and charter.
- Commissioner counties operate under a board of elected commissioners who have legislative authority as granted by the State, often referred to as "Express Powers."
- Code home rule counties are those that have adopted code home rule under Article XI-F of the Maryland Constitution, giving them a degree of legislative autonomy similar to charter counties but within a more limited framework.
- Charter counties have adopted a charter under Article XI-A of the Maryland Constitution, which provides them with broad legislative powers to govern local affairs, including the ability to pass local laws through a county council.
MACo's local government structure chart (PDF) compares Maryland's 23 jurisdictions and Baltimore City forms of government, including term of office, meeting dates, method of election, and district information.
MACo's code, charter, and commissioner forms of government chart (PDF) describes the differences between code home rule, charter, and commissioner forms of local government. It compares bonding authority, tax caps, and compensation, among other issues.
Visit the DLS website to read the Guide to Local Government Taxing Authority.
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