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MarylandSB 07042026 Regular SessionSenateWALLET

Maryland Estate Tax – Qualified Agricultural Property – Transfer to Limited Liability Company

Sponsored By: Johnny Mautz (Republican)

Signed by Governor

Taxes - MiscellaneousAgriculture -see also- Agritourism; Cannabis Prd; Farm; etc.Death -see also- Homicide; Murder; Wrongful DeathEstate TaxFarmers and Farming -see also- Agriculture; FarmlandFarmlandLimited Liability CompaniesPersonal PropertyReal PropertyTime

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Bill Overview

Analyzed Economic Effects

3 provisions identified: 2 benefits, 0 costs, 1 mixed.

Lower estate tax for farm heirs

Effective July 1, 2027. It applies to decedents dying after June 30, 2027. Up to $5,000,000 of qualified farm property that passes to a qualified recipient is excluded from the Maryland estate. If the farm value is over $5,000,000, Maryland estate tax is capped at two parts: 16% of the taxable estate above the standard Maryland exclusion, not counting the farm, plus 5% of the farm value above $5,000,000. The property must pass to someone who agrees to keep using it for farming.

Farm heirs must keep land farming

Effective July 1, 2027, for decedents dying after June 30, 2027. If the farm stops being used for farming within 10 years after death, the state recaptures the tax break. The recapture equals the extra Maryland estate tax that would have been due at death without the farm exclusion and special cap. A qualified recipient can move the property into an LLC without recapture if all LLC owners are qualified recipients and the land stays in farming use for at least 10 years.

Definitions and rules for farm tax break

The law defines key terms for this farm estate tax break. Farming purposes follows the federal definition in Internal Revenue Code 2032A(e)(5). Qualified agricultural property means real or personal property used mainly for farming. A qualified recipient is an individual who agrees to use the property for farming after the decedent’s death. The Comptroller must issue regulations to run these rules. Effective July 1, 2027, for decedents dying after June 30, 2027.

Sponsors & Cosponsors

Sponsor

  • Johnny Mautz

    Republican • Senate

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 176 • No: 0

House vote • 4/13/2026

Third Reading Passed

Yes: 134 • No: 0 • Other: 6

Senate vote • 3/20/2026

Third Reading Passed

Yes: 42 • No: 0 • Other: 1

Actions Timeline

  1. Approved by the Governor - Chapter 551

    5/12/2026

  2. Returned Passed

    4/13/2026Senate

  3. Third Reading Passed (134-0)

    4/13/2026House

  4. Favorable Adopted Second Reading Passed

    4/11/2026House

  5. Favorable Report by Ways and Means

    4/11/2026House

  6. Hearing 4/02 at 1:00 p.m.

    3/25/2026House

  7. Referred Ways and Means

    3/21/2026House

  8. Third Reading Passed (42-0)

    3/20/2026Senate

  9. Second Reading Passed with Amendments

    3/19/2026Senate

  10. Favorable with Amendments {283425/1 Adopted

    3/19/2026Senate

  11. Motion Special Order until Later Today (Senator King) Adopted

    3/18/2026Senate

  12. Favorable with Amendments {283425/1

    3/18/2026Senate

  13. Favorable with Amendments Report by Budget and Taxation

    3/18/2026Senate

  14. Hearing 3/04 at 1:00 p.m.

    2/13/2026Senate

  15. First Reading Budget and Taxation

    2/6/2026Senate

Bill Text

  • Enacted

    5/12/2026

    PDF

  • Third Reading

    3/19/2026

    PDF

  • First Reading

    2/6/2026

    PDF

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