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HB 1080

Income Tax - Addition Modifications - Excluded Opportunity Fund Gains, Foreign-Derived Deduction Eligible Income, and Interest

2026 Regular Session Introduced by Jared Solomon

HB 1080 excludes qualified opportunity zone gains and foreign-derived income from Maryland taxation, reducing state tax revenue while matching federal investment incentives.

Hearing 2/26 at 1:00 p.m.
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Bill Summary · HB 1080

Legislative bill overview

HB 1080 modifies Maryland's income tax code to exclude gains from qualified opportunity zone investments and foreign-derived deduction eligible income from state taxable income, while also adjusting how certain interest income is treated for tax purposes. The bill aligns state tax treatment with federal tax incentives designed to encourage investment in economically distressed areas and support business competitiveness in global markets.

Why is this important

These changes could affect state revenue by allowing taxpayers to reduce their Maryland taxable income based on federal tax provisions, potentially lowering tax obligations for investors and businesses engaged in opportunity zone investments or international operations. The fiscal impact depends on how many Maryland taxpayers utilize these provisions and the total value of gains or income excluded.

Potential points of contention

  • Revenue implications: Excluding these income categories reduces state tax collections without corresponding spending cuts or revenue offsets, potentially widening budget pressures
  • Equity concerns: Benefits primarily accrue to investors and businesses with sufficient capital to invest in opportunity zones or engage in foreign-derived activities, potentially favoring higher-income taxpayers
  • Federal-state alignment: Tying Maryland tax code to federal incentive programs means state benefits fluctuate with federal policy changes beyond Maryland's control

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

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