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SB 704

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

2026 Regular Session Introduced by Johnny Mautz

SB 704 allows Maryland farmers to transfer qualified agricultural land into LLCs without losing preferential estate tax treatment, reducing tax burdens on family farm transfers.

Returned Passed
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WeVote Research Nonpartisan
Bill Summary · SB 704

Legislative bill overview

SB 704 modifies Maryland's estate tax treatment of qualified agricultural property by allowing farmers to transfer their land into limited liability companies (LLCs) while maintaining the property's agricultural exemption status. Currently, such transfers may jeopardize the tax-advantaged treatment that agricultural land receives, potentially triggering significant estate tax liabilities for farming families. The bill clarifies that restructuring farmland ownership through an LLC does not disqualify the property from preferential estate tax valuation.

Why is this important

Maryland's estate tax can be devastating for family farms, as agricultural land is often valued far higher for development than for farming operations. By allowing transfers to LLCs—a common estate planning and operational tool—the bill helps farming families modernize their business structures without accidentally losing tax protections that exist to keep farmland in agricultural use. This prevents unintended tax penalties that could force families to sell productive farmland to pay estate taxes.

Potential points of contention

  • Wealth protection vs. revenue: Critics may argue the bill reduces state estate tax revenue by protecting wealthier agricultural landowners, while proponents counter it preserves family farms rather than forcing sales.
  • LLC structure exploitation: There's a technical question of whether LLC transfers could be misused by non-farmers to disguise property conversions and claim undeserved agricultural exemptions.
  • Scope ambiguity: The bill's definition of "qualified agricultural property" and what LLC structures qualify may need clarification to prevent unintended loopholes.

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

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