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Tuesday, June 17, 2025
HomeHorse Law NewsMaryland's 2026 Budget: Key Tax Increases and Major Legislative Changes Signed into...

Maryland’s 2026 Budget: Key Tax Increases and Major Legislative Changes Signed into Law

Maryland’s 2026 budget, set to be signed into law by Gov. Wes Moore, totals nearly $67 billion and aims to address a $3 million deficit alongside federal funding cuts. The budget includes approximately $1.8 billion in tax and fee increases, marking the largest cuts to state spending in 16 years. Notably, it introduces two new tax brackets for high earners, imposing a 6.25% tax on those making $500,000 and a 6.5% tax on those earning $1 million, while providing tax breaks for low- and middle-income residents.

In addition to tax adjustments, the budget proposes a new 3% tax on IT services and increases taxes on cannabis and sports betting. Gov. Moore emphasized a focus on spending cuts over tax increases, with lawmakers agreeing to $2.3 billion in budget cuts. This approach reflects a commitment to economic growth while addressing fiscal challenges.

On the same day, Gov. Moore will sign 164 additional bills into law, including measures aimed at addressing rising energy costs and improving prescription drug affordability. Key legislation includes the Renewable Energy Certainty Act, which facilitates solar energy projects, and the Maryland Values Act, which restricts federal immigration enforcement at sensitive locations like schools and libraries. These initiatives highlight the administration’s broader goals of sustainability and social equity.

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