New Maryland bills passed during the General Assembly’s 2026 legislative session will take effect on July 1, 2026. Several of these bills may impact local businesses, depending on the industry. Two such bills with broad impact are highlighted below.
Tax Changes
The Budget Reconciliation and Financing Act (BRFA) permanently decouples Maryland from a new deduction for qualified production property, starting in tax year 2026. The new deduction for qualified production property did not take effect in tax year 2025 due to Maryland’s “trigger” rule for conformity, and thus it will never appear on the Maryland tax return and not impact businesses relative to the status quo.
The BRFA also decouples Maryland from the updated federal rules for bonus depreciation, but the benefit is not eliminated. Under the BRFA, eligible businesses will claim 20% of eligible investments in tax year 2026—the pre-OBBBA federal and state law for tax year 2026—instead of the 100% federal rate created by the OBBBA. The state will then permanently use the 20% rate for bonus depreciation. Bonus depreciation remains a benefit that only manufacturing companies can access on the Maryland tax return.
Agricultural Property
Another bill, SB704, authorizes a qualified recipient to transfer legal ownership of qualified agricultural property to a limited liability company (LLC) without estate tax recapture if the ownership of the LLC consists only of qualified recipients, and the qualified agricultural property is used for farming purposes for at least 10 years after the decedent’s death.
Original reporting: NFIB (National Federation of Independent Business) — read the source article.
