Note to readers: In the next week, you will receive three "At Issue - Taxes" special editions, each of which provides pertinent information about tax rates and fees that now or will soon apply in AOBA jurisdictions. The Maryland edition appears below.

2008-2009 MARYLAND State and Local Tax Rates

REAL PROPERTY TAX

This tax is levied by the State of Maryland and used for the payment of principal and interest on State bonds. This tax is levied on real property only. Maryland has one uniform class of property to which the property tax is applied. Property tax rates are expressed as a dollar amount per $100 of assessed value. NOTE: the state real property tax is not collected separately; it is included in the real property tax bill issued by the county in which the property is located.

State FY 2009 Real Property Tax Rate: 0.112 (effective July 1, 2008)

COUNTY/LOCALITY

No restrictions or limitations on property taxes are imposed by the State, enabling cities and counties to set tax rates at the level required to fund governmental services. These rates can increase, decrease, or remain the same from year to year. The overall tax rate is a combination of State, county, and in some cases municipal tax rates. The General County tax is levied on all property in the County and funds, in part, such basic services as police protection, elementary and secondary education, the community college, transportation, health and social services, and libraries.

Note: The State Department of Assessments and Taxation does not regulate or collect taxes; these are functions of local governments. If you have questions regarding the rates listed below, please contact the tax billing and collection office for the appropriate County.

PRINCE GEORGE'S COUNTY
J. Michael Dougherty, Jr., Esq.
Office of Finance, Prince George's County
Treasury Division
14741 Governor Oden Bowie Drive
Upper Marlboro, Maryland 20772
Tax Bills: (301) 952-4030 or (301) 952-4252
Fax: 301-952-3148
Prince George's County Home Page

MONTGOMERY COUNTY
Mr. Tim Firestine, Director
Department of Finance, Montgomery County
101 Monroe Street
Rockville, Maryland 20850
Phone: (240) 777-8860 Fax: (240) 777-8857
Tax Bills: (240) 777-8950
Montgomery County Home Page

Below is a list of localities in Prince George's and Montgomery Counties and their property tax rates, effective July 1, 2008.

Maryland Edition

Questions or comments?
E-mail us at aobanews@aoba-metro.org or call 202-296-3390.

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July 2:
Foundations of Real Estate Management

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Prince George's County Real Property Tax Rates

Montgomery County Real Property Tax Rates

BUSINESS PERSONAL PROPERTY TAX

In Maryland, there is a tax on business owned personal property. Personal property generally includes furniture, fixtures, office and industrial equipment, machinery, tools, supplies, inventory and any other property not classified as real property. Responsibility for the assessment of all personal property rests with the State Department of Assessments and Taxation, but the tax itself is imposed and collected by the local governments. Rates shown are effective July 1, 2008.

Business Personal Property Tax Rates

More information may be found at: http://www.dat.state.md.us/sdatweb/personal.html

REAL PROPERTY RECORDATION AND TRANSFER TAX

Maryland collects recordation and transfer taxes on real property transactions. Rates shown are effective July 1, 2008 and are shown as dollars per $500 of the transaction.

Recordation Tax Rates

Transfer Tax Rates

NOTE: In 2007, the General Assembly passed legislation imposing these taxes on transfers of "controlling interests" in certain "real property entities." The tax applies to the transfer of real property with a value of $1.0 million or more when the transfer is achieved through the sale of a "controlling interest" in a specified corporation, partnership, limited liability company, limited liability partnership, or other form of unincorporated business. "Controlling interest" is defined as more than 80% of the total value of the stock or the interest in capital and profits.

CORPORATE INCOME TAX

The corporate income tax applies to every Maryland corporation and every other corporation that has a nexus with Maryland. The tax is imposed on the business entity's Maryland modified taxable income, which is defined as the corporation's federal taxable income, adjusted by state modifications. Corporations engaged in multistate operations must allocate Maryland modified income using an apportionment formula, generally consisting of receipts, property and payroll factors.

State FY 2009 Corporate Income Tax Rate: 8.25% (effective January 1, 2008)

More information, including on business tax credits for which Maryland corporations may be eligible, may be found at: http://business.marylandtaxes.com/taxinfo/nexus.asp

SALES AND USE TAX

Businesses in Maryland are required to pay sales taxes on all taxable purchases, including those made out of state or on the Internet but for use in Maryland, with certain exceptions. There are no general local sales taxes in Maryland.

State FY 2009 Sales and Use Tax Rate: 6.00% (effective January 3, 2008)

ENERGY TAXES

Maryland counties may enact taxes on energy. The rates shown below are effective July 1, 2008.

Montgomery County Residential Fuel/Energy - Tax Rates - Carbon Surtax (including multi-family properties)

Montgomery County Non-Residential Fuel/energy - Tax Rates - Carbon Surtax

Prince George's County Energy Tax Rates

SOLID WASTE CHARGES/FEES

The solid waste charges and fees shown below will be effective July 1, 2008.

Montgomery County Solid Waste Charges/Fees

Prince George's County Solid Waste Charges/Fees

There is not a separate charge in the County for waste management, except for the System Benefit Charge (SBC), a fee paid by all non-residential property owners in Prince George's County to help fund building and maintaining of waste disposal systems. The SBC is a service charge and not a tax, and therefore also applies to establishments located on tax-exempt land.

System Benefit Charge Rates

WATER AND SEWER CHARGES

Properties in Montgomery and Prince George's Counties receive water and sewer services from the Washington Suburban Sanitary Commission (WSSC).

WSSC has adopted an 8% rate increase for FY 2009, to take effect July 1, 2008.

WSSC has not yet posted its FY 2009 rate schedule; however, the FY 2008 schedule may be found at: http://www.wsscwater.com/service/rates.cfm

ENVIRONMENTAL PROTECTION CHARGES

Bay Restoration Fund Fee

Many building owners in Maryland are subject to a set of fees that support the Bay Restoration Fund, which was created to upgrade Maryland's wastewater treatment plants.

The fees are levied on users of wastewater facilities, onsite sewage disposal systems and holding tanks that are located in Maryland or qualify by serving Maryland users. The revenue is collected by the billing authorities and remitted to the Comptroller of Maryland.

A building under single ownership that receives a sewer bill and contains multiple dwellings that do not receive sewer bills, or is for nonresidential users, is subject to:

• $2.50 monthly fee per each dwelling unit up to 3,000 units or less.
• $1.25 monthly fee per each dwelling unit for 3,000 - 5,000 units.
• No fee for above 5,000 dwelling units.

The applicable fee will be stated separately on the sewer or water bill. Users who don't receive sewer or water bills must submit their fees to their local county government.

Montgomery County Water Quality Protection Charge

Montgomery County collects a Water Quality Protection Charge, paid by all residential property owners and any "associated nonresidential property owners." An associated nonresidential property is any nonresidential property from which stormwater drains into a stormwater management facility that primarily serves one or more residential properties, e.g. parking lots and outbuildings draining to a residential pond or other type of stormwater management structure. The Equivalent Residential Unit (ERU) is the base unit for calculating the Water Quality Protection Charge; associated nonresidential structures are billed as multiples of the ERU.

FY 2009 Water Quality Protection Charge: $35.50 per ERU (effective July 1, 2008)