Over 300 bills that passed the 2025 General Assembly went into effect on July 1. That’s a lot of new laws. I’m only highlighting a few. A number of the bills that may impact your taxes and fees are placed at the beginning.
Changes in Taxes and Fees
Technology Tax
A 3% tax will apply to services like data storage and processing, software publishing and website hosting. Independent state analysts have said it will raise $482 million in its first year. It will largely impact business-to-business transactions.
Income tax changes
The maximum tax rate of 5.75% on individuals making at least $250,000 will increase with the addition of two higher brackets — 6.25% on individuals making at least $500,000; and 6.5% on individuals making more than $1 million.
The value of the Maryland standard deduction will also increase from $2,800 to $3,350 for individual filers. Itemized deductions for taxpayers making more than $200,000 (or $100,000 if married and filing separately) will start to be phased out.
The net effect: About 60% of taxpayers will see their state income tax liability decrease by an average of $43, and one-third of filers will see no change, according to an analysis by the Maryland comptroller’s office using 2023 tax data. The smallest pool of taxpayers — about 169,000, who make up 5.7% of all returns — will pay an average of $1,849 more.
Another area targeting the wealthiest Marylanders is a new 2% surcharge on capital gains income for those with more than $350,000 in household income. Most of the $229 million in expected revenue from that fee will go to the transportation budget.
Cannabis Tax
The sales tax on cannabis products will increase from 9% to 12%. Cannabis used for medicinal purposes is not subject to the tax.
Sports wagering
Taxes on sports betting are increasing from 15% to 20%.
Snack foods
Snack food purchased in vending machines will now be subject to the 6% tax. That includes potato chips and sticks, corn chips, pretzels, cheese puffs and curls, pork rinds, popped popcorn and nuts and edible seeds. Milk, yogurt and fresh fruit and vegetables purchased from vending machines will still be exempt from the sales tax.
Officials expect to raise $9.1 million off the change. Repealing other sales tax exemptions on photographic or artistic material used in advertising, and on sales of precious metal coins or bullion, are expected to raise another $18.7 million and $2.5 million, respectively.
Vehicle fees
The certificate of title fee for new and used vehicles will double from $100 to $200.
The 6% vehicle excise tax will increase to 6.5%. A new 3.5% excise tax will go into effect for rental vehicles. A discounted registration rate for rental vehicles will also be eliminated.
Vehicle Emissions Inspection Program fees will increase from $14 to $30 and be increased further according to the rate of inflation.
The definition of historic vehicles, which have specialty tags, will be limited to the 1999 model year or earlier, making any “historic” vehicle more recent than that subject to other fees. A new $5 fee for new tires will be enacted halfway through the fiscal year, on Jan. 1.
New funding for abortion grants
A new law allows the Maryland Department of Health to release millions of dollars in unspent insurance funds that it hopes to use to fund abortions for uninsured and underinsured Marylanders. Under this law, providers will receive the grant funds for providing abortion services for people who do not have insurance or whose health insurance does not cover abortions.
Changes in Zoning Requirements for Solar Fields
Beginning Tuesday, local governments will have less say in the siting of large-scale solar fields, under a law that changes how Maryland regulates solar energy sites.
The law undoes restrictive zoning laws passed in several counties and sets uniform environmental standards for solar farm construction, including rules requiring buffers of trees and shrubs, and limiting the disturbance of topsoil.
Changes in The Blueprint for Maryland’s Future
Three years into the implementation of the Blueprint for Maryland’s Future, the 10-year schools education reform plan was amended. One major part of the Blueprint deals with the implementation of “collaborative time,” which provides teachers more out-of-classroom time to plan and work with each other on various subjects and also assess student achievement. School systems are supposed to start implementing collaborative time next year. The law pauses the policy requirement for collaborative time for three years but keeps the funding amount at $163 per student for next fiscal year. It would stay at that level until fiscal 2029, when it would jump to $334 per student.
GED Test in Spanish
Thousands more Marylanders are expected to be able to take the General Educational Development test, also known as the GED, for the equivalent of a high school diploma, now that the test will be offered in Spanish as well as English. Maryland was the only state to publish the test in English only.
Young adult health care subsidies extended
Young people buying health insurance on the state’s Affordable Care Act marketplace will continue to see savings on their monthly premiums, thanks to the new law that eliminates the expiration date for the State-Based Young Adult Health Insurance Subsidies Pilot Program.
The current program aims to help low-income Marylanders between the ages of 18 and 37 afford individual health plans through state-funded subsidies, taking an average of $40 off of their monthly insurance premiums. Those savings range depending on the individual’s financial situation.
Establishing a disability employment initiative
The new law establishes the Office of Disability Employment Advancement and Policy. The new office will explore strategies to improve employment, training and care-readiness of people with disabilities. The office will also implement the “Maryland as a Model Employer Initiative” which will help connect people with disabilities to jobs and promote career advancement for those individuals.
Chesapeake Bay policy changes
The Chesapeake Bay Legacy Act includes a new $900,000 program to encourage ecofriendly farming, called the Maryland Leaders in Environmentally Engaged Farming, or LEEF, program. Meant to mimic the LEED program for green buildings, the program will reward sustainable agricultural practices.
It also includes a number of tweaks to policies at the Maryland Department of Natural Resources: Allowing the state to utilize water quality data from community groups, reducing the number of species for which the state must produce fishery plans (and deferring to regional fishery managers) and letting some watermen process fish using a Japanese technique known as ike jime and sell them directly to restaurants without being licensed as a food establishment.
Child Victims Act
At the start of the 2025 legislative session, fiscal analysts warned lawmakers that settlement payments could total over $3 billion for the state, which was already facing a $3 billion structural deficit. Following an influx of cases filed under the 2023 Child Victims Act, a limit to the amount that claimants can be paid out in case settlements will go into effect on Sunday.
Under the new law, caps on payments for settlements for survivors of abuse from public agencies would be lowered from $890,000 to $400,000. Payouts from private institutions would drop from $1.15 million to $700,000.
The adjusted payment caps would only apply to lawsuits that were previously unable to be filed because of the now-stricken statute of limitations. Only one suit can be filed per claimant, regardless of how many individual instances of abuse occurred.
A New State Cocktail and a State Mineral
Effective June 1, Maryland’s official state cocktail will be the orange crush.
The orange crush — a summertime staple composed of fresh-squeezed orange juice, vodka, triple sec and a splash of Sprite or club soda — was first created at the Harborside Bar & Grill in West Ocean City in 1995.
The legislation also designates chromite as the state mineral.
Metro Rider bans for Riders Assaulting MTA operators
Starting Sunday, people alleged of assaulting a Maryland Transit Authority (MTA) public transit operator will be banned from riding. MTA must convene a work group to establish a rider code of conduct and implement a comprehensive internal safety program to increase protections for riders and transit operators, including ban procedures for assault, the possibility for legal action and an appeals process.
Delayed FMLA
Legislation will go into effect June 1 to shift the implementation of Maryland’s Family Medical Leave and Insurance program from July 1, 2025, to Jan. 1, 2027.
Noise Abatement Monitoring systems
Extends to June 30, 2028 the timeframe Montgomery & Prince George’s Counties can use automated noise abatement monitoring systems and issue tickets along state and local highways.
Emergency Calls to Rental Properties
Prohibits local governments from enforcing existing laws that cap the number of calls for emergency services to rental properties.
Changing Gender Names
Replaces references in Maryland code to Maryland State Firemen’s Association with Maryland State Firefighters Association; makes similar replacements for Disabled Firemen and Rescue Squadmen lists to Disabled Firefighters and Rescue Squad Person
Tax Help for Incarcerated Individuals
This act establishes an Income Tax Reconciliation Program to allow individuals who are unable to file a state income tax return while incarcerated to establish installment payment plans and receive a waiver of accrued interest and penalties for tax years 2025 through 2029.
Notice to Occupant of Storage Facility
Requires a self-service storage facility operator to provide an occupant with a notice 10 days before conducting a lien sale of personal property.
Political Literature
Requires political action committees that use a candidate’s likeness to disclose whether they have the candidate’s consent to do so; establishes penalties for violations.
This material for this newsletter was taken from various news sources including the Baltimore Sun, WPYR and Maryland Matters. Thanks to all the people who do this work.
