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HB 1554

Sales and Use Tax - Electricity for Agriculture Purposes - Study and Report

2026 Regular Session Introduced by Kevin Hornberger and 1 co-sponsor

Maryland will study potential sales tax exemptions or reductions on farm electricity to assess feasibility and revenue impacts before deciding on implementation.

Approved by the Governor - Chapter 783
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Bill Summary · HB 1554

Legislative bill overview

HB 1554 directs Maryland to conduct a study and produce a report examining the feasibility and implications of exempting or reducing sales and use taxes on electricity used for agricultural purposes. The bill does not implement a tax change itself, but rather requires state analysis of whether such a policy would be beneficial and viable.

Why is this important

Agricultural operations are significant electricity consumers, and tax exemptions or reductions on farm-related utilities could reduce operating costs for farmers, potentially affecting food prices and farm competitiveness. The study results could inform future tax policy decisions that impact both the agricultural sector's profitability and state revenue.

Potential points of contention

  • Revenue impact uncertainty: The study will need to estimate how much state tax revenue would be lost if an exemption were implemented, which could be substantial depending on eligibility definitions
  • Defining "agricultural purposes": Determining what qualifies as farm electricity (irrigation vs. processing facilities vs. equipment operation) could create implementation challenges and disputes
  • Competitive fairness: Other industries (manufacturing, commercial operations) may argue they deserve similar tax relief, potentially broadening the scope beyond the original intent

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

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