Fair Share for Maryland Act of 2025
SB 859, the Fair Share for Maryland Act of 2025, makes a broad set of changes to Maryland’s estate and income tax laws, with most provisions aimed at increasing revenue from higher-income individuals and larger businesses. On the estate tax side, it lowers the Maryland estate tax exclusion for decedents dying on or after January 1, 2026, from $5 million to $2 million, while preserving the deceased spousal unused exclusion rules. On the income tax side, it raises the top individual income tax rates, adds a 1% tax on net investment income for individuals with federal adjusted gross income above $350,000, and creates a new 8.25% tax on pass-through entity income distributed to members above $1 million. It also imposes a new 2.5% business transportation fee on corporate and pass-through entity income above $10 million for tax years 2027 through 2032, with revenue dedicated to the Transportation Trust Fund.
The bill also changes several corporate tax rules. It limits net operating losses to the first $500,000 for certain years, expands the sales factor for apportioning corporate income by sourcing more tangible personal property sales to Maryland, and requires combined reporting for unitary corporate groups beginning in 2029. In addition, it directs the Comptroller to adopt regulations consistent with Multistate Tax Commission principles and authorizes interest and penalties for certain estimated tax underpayments. The bill also restricts the effect of certain federal tax code changes on Maryland taxable income for an additional year in some circumstances.
For lower- and middle-income taxpayers, the bill makes targeted changes to credits. It expands the Maryland earned income tax credit for workers without qualifying children by changing the phase-out thresholds and indexing them for inflation beginning in 2029. It also broadens the child tax credit by increasing the per-child amount, extending eligibility to children under age 18, and phasing the credit down at higher income levels, with inflation adjustments beginning in 2029. Separately, it changes the definition of “qualified child” for a different credit and increases that credit to $750 for children under age 6 and $500 for children age 6 and older, subject to income-based phaseouts.
The overall sentiment reflected in the bill’s structure is strongly pro-revenue and progressive, emphasizing higher taxes on wealthier individuals, large corporations, and pass-through business income while expanding selected family and worker credits. Because there are no committee transcripts or recorded votes provided, there is no direct evidence of debate, support, or opposition in the available materials. The bill’s title and provisions suggest a policy framing around tax fairness and funding transportation and public services.
The main points of contention likely concern the size and timing of the tax increases, especially the lower estate tax exemption, higher top income tax rates, the new tax on investment income, combined reporting, and the business transportation fee. Businesses and high-income taxpayers would be most affected by the corporate and individual tax changes, while advocates for progressive taxation and transportation funding would likely support the bill’s revenue measures and expanded credits for families and low-income workers.
SB 859 would substantially revise the Tax-General Article by increasing estate and income tax burdens on high-income individuals, large corporations, and pass-through entities, while also expanding certain refundable credits for families and low-income workers. It would lower the Maryland estate tax exclusion, create new taxes on investment income and pass-through distributions, increase top individual income tax rates, impose a business transportation fee, limit net operating losses, alter corporate apportionment and sourcing rules, and require combined reporting for unitary corporate groups. The bill also changes the earned income tax credit and child-related credits, affecting eligibility, credit amounts, and inflation indexing.
No committee transcripts or vote history were provided, so there is no recorded floor or committee sentiment to summarize. Based on the bill text alone, the measure appears to be framed as a progressive revenue package intended to raise funds from higher-income taxpayers and large businesses while providing targeted relief to lower-income workers and families. The caption, “Fair Share for Maryland Act of 2025,” reinforces that policy orientation.
The most likely areas of contention are the higher estate tax burden, the new 1% tax on net investment income, the increased top marginal income tax rates, the 8.25% tax on pass-through entity distributions above $1 million, the business transportation fee, and mandatory combined reporting for corporate groups. Business interests would likely object to the corporate tax and apportionment changes, while supporters would likely argue the bill improves tax fairness and raises dedicated transportation revenue. Family and anti-poverty advocates would likely support the expanded credits, though the income phaseouts and eligibility rules could still draw technical scrutiny.