County Income Tax - Rate and Income Brackets - Alterations
Summary
SB70 would revise Maryland law governing county income taxes. It raises the statewide ceiling on county income tax rates from 3.20% to 3.7%, while preserving the existing minimum rate of 2.25% and the requirement that counties use ordinances or resolutions to set their rates. The bill also keeps the public hearing and newspaper notice requirements for counties that raise rates above 2.6%, and it continues the special rule that Howard County may change its rate only by ordinance.
The bill further expands and standardizes bracketed county income tax structures. Counties that use bracket-based taxation would be limited to no more than eight brackets for individual filers and eight for joint filers/head-of-household filers, and they would have to use specified income bracket thresholds rather than creating their own. Counties could apply the same rate to more than one bracket, but could not tax higher brackets at lower rates than lower brackets. The bill also allows counties to request Comptroller data to help design revenue-neutral bracket structures.
For counties setting rates above 3.2%, SB70 adds a new rule that any rate above that level may apply only to income above $250,000 for single filers and $300,000 for joint filers or qualifying surviving spouses/head of household. It also states legislative intent that revenue from the portion of the county rate above 3.2% be used for public education and transportation. The bill would take effect July 1, 2026, and apply to taxable years beginning after December 31, 2026.
Because there were no committee transcripts or recorded votes provided, there is no documented discussion or formal vote history to gauge support or opposition. Based on the bill text alone, the measure appears designed to give counties more flexibility to raise revenue while imposing structure on bracketed systems and directing the highest-rate revenue toward education and transportation.
Impact
SB70 would amend § 10-106 of the Tax-General Article to increase the maximum county income tax rate, create new limits and uniform thresholds for bracket-based county income taxes, and add a high-income-only rule for county rates above 3.2%. It would affect county governments, taxpayers, and the Comptroller’s administration of county income tax reporting and bracket implementation. The bill would also establish a policy statement tying revenue above 3.2% to education and transportation funding.
Sentiment
No committee testimony or vote record was provided, so there is no direct evidence of legislative sentiment from hearings or floor action. From the bill text, the proposal appears generally pro-local-government and revenue-flexibility oriented, while also attempting to reassure taxpayers by standardizing brackets, limiting bracket counts, and reserving the highest rates for upper-income earners. The absence of recorded opposition or support means any assessment of sentiment is limited to the bill’s structure and stated intent.
Contention
The likely points of contention are the higher county tax cap, the new authority for counties to tax incomes above 3.2% only above specified high-income thresholds, and the mandate-like bracket structure that limits county discretion. Counties seeking more local flexibility may support the higher cap and bracket options, while taxpayers or anti-tax advocates may object to the increased maximum rate and the potential for higher burdens on upper-income residents. Counties that already use or want customized bracket systems may also scrutinize the required bracket thresholds and the eight-bracket limit.