WeVote
Log In

Bill

Bill

SB 33

Recordation and Transfer Taxes - Exemption for Related Business Entities - Common Law Trusts

2026 Regular Session Introduced by Chris West

SB 33 exempts property transfers between related business entities and common law trusts from Maryland transfer taxes, reducing state/local tax revenue while benefiting trust-based property structures.

Hearing 1/21 at 10:00 a.m.
0
WeVote Research Nonpartisan
Bill Summary · SB 33

Legislative bill overview

SB 33 would exempt certain real property transfers between related business entities and common law trusts from Maryland's recordation and transfer taxes. The bill allows property to change hands within defined family or business relationships without triggering the state's standard transfer tax obligations, which typically range from 0.5% to 1.5% of the property's value depending on jurisdiction.

Why is this important

Transfer taxes generate significant revenue for Maryland counties and municipalities—revenue that funds schools, infrastructure, and local services. This exemption would reduce that revenue stream while potentially benefiting real estate investors and wealthy families who structure property holdings through trusts and related entities. The fiscal impact depends on how frequently such transfers occur and whether this creates incentives for tax avoidance strategies through entity restructuring.

Potential points of contention

  • Revenue loss: Counties and municipalities would lose transfer tax revenue from exempt transactions, potentially requiring alternative funding sources or service reductions
  • Equity concerns: The exemption primarily benefits property owners wealthy enough to use trusts and corporate structures, raising questions about who bears the remaining tax burden
  • Definitional ambiguity: "Related business entities" and "common law trusts" require clear legal definitions to prevent abuse; vague language could enable unintended tax avoidance
  • Market distortions: The exemption could incentivize artificial restructuring of property ownership to avoid taxes rather than reflect genuine business needs

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

Sign in to ask a question.