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SB 427

Property Taxes - Authority of Counties to Establish a Subclass and Set a Special Rate for Personal Property of Data Centers

2026 Regular Session Introduced by Karen Young

SB 427 authorizes Maryland counties to establish a special property tax subclass for data center equipment, allowing preferential tax rates to attract industry investment.

Hearing 2/18 at 1:00 p.m.
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Bill Summary · SB 427

Legislative bill overview

SB 427 grants Maryland counties the authority to create a special property tax subclass and set differential tax rates specifically for data center personal property (equipment, servers, and related infrastructure). This would allow counties to tax data center equipment separately from other personal property, potentially at lower rates to attract data center investment.

Why is this important

Data centers represent significant economic development opportunities and tax revenue, but they also require substantial infrastructure investment. By allowing counties to offer preferential tax treatment, Maryland aims to compete with other states for data center facilities, which generate jobs and economic activity. However, this creates questions about tax equity and whether certain industries should receive preferential treatment over others.

Potential points of contention

  • Fairness concerns: Other businesses may argue they deserve similar tax breaks, or that shifting tax burden to non-data-center property owners is inequitable
  • Revenue impact: Counties could lose significant tax revenue if data center rates are substantially lower, potentially affecting funding for schools and services
  • Economic justification: Whether tax incentives are necessary to attract data centers versus whether market forces alone would drive investment

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

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