ANNAPOLIS, Md. (March 25, 2014) — The Maryland legislature has approved a bill that gradually raises the exemption threshold for estate taxes within the state.
On March 20, the Maryland Senate approved HB 739 by a 36-10 vote, 13 days after the Maryland House of Delegates passed the legislation 120-13. The bill now goes to Gov. Martin O'Malley to be signed into law.
Under the previous Maryland law, the state charged a 16-percent tax on estates worth more than $1 million. HB 739 gradually raises the threshold—first to $1.5 million beginning Jan. 1, 2015, with an annual raise until it reaches the current federal exemption level of $5.34 million on Jan. 1, 2019.
The Tire Industry Association (TIA), a longtime advocate of estate tax reform, testified in favor of the bill in committee.
“(W)e believe that it has the potential to help business owners reduce their tax burdens while bringing down the cost of estate tax planning,” said TIA Executive Vice President Roy Littlefield in his March 17 legislative update.
“This legislation has the potential to keep high-income wage earners and businesses within the state of Maryland,” Mr. Littlefield said. “Estate tax repeal has the potential to make us more competitive as a state.”
Currently, 14 states and the District of Columbia assess estate taxes, according to Mr. Littlefield. Exemptions range between $675,000 and $5.25 million, and tax rates range from a low of 12 percent—in Connecticut and Maine—to a high of 19 percent in Washington State, he said.