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HB 801

Income Tax - Addition Modifications - Business Stock Gains, Fines, Penalties, and Bonus Depreciation

2026 Regular Session Introduced by Elizabeth Embry

HB 801 modifies Maryland income tax treatment of business stock gains, penalties, and bonus depreciation, potentially increasing tax liability for affected businesses and investors.

Hearing 2/26 at 1:00 p.m.
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WeVote Research Nonpartisan
Bill Summary · HB 801

Legislative bill overview

HB 801 modifies Maryland's state income tax code by adjusting how certain business income is taxed, specifically regarding stock gains, fines, penalties, and bonus depreciation deductions. The bill appears to add or clarify "addition modifications" to taxable income, meaning it may require taxpayers to add back certain deductions or exclude certain types of income from federal calculations when computing Maryland state taxes.

Why is this important

This bill directly affects how Maryland businesses and investors calculate their state tax liability. Changes to treatment of business stock gains, penalties, and depreciation deductions can significantly impact effective tax rates for corporations and pass-through entities, potentially influencing business investment decisions and tax revenue for the state.

Potential points of contention

  • Corporate vs. individual impact: Unclear whether modifications apply equally to corporations and individual investors, potentially creating fairness concerns or competitive disadvantages
  • Bonus depreciation alignment: Businesses may oppose modifications that limit federal bonus depreciation benefits at the state level, effectively creating double taxation on accelerated deductions
  • Revenue versus competitiveness: Tax increases may improve state revenue but could disadvantage Maryland businesses compared to neighboring states with more favorable depreciation treatment

Compiled from official sources — confirm details with the bill’s official record.

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