There are many bills passed during the General Assembly’s 2026 legislative session that will take effect on July 1, 2026. Several of them may impact your business depending on your industry. Two such bills with broad impact are highlighted below. Please note the state’s FY27 budget begins on July 1.

• SB284– The Budget Reconciliation and Financing Act (BRFA): The One Big Beautiful Bill Act (OBBBA) changed many individual and corporate income tax laws that Maryland conforms with. The BRFA permanently decouples Maryland from a new deduction for qualified production property, starting in tax year 2026. The new deduction for qualified production property did not take effect in tax year 2025 because of Maryland’s “trigger” rule for conformity, and thus it will never appear on the Maryland tax return and not impact businesses relative to the status quo. The BRFA also decouples Maryland from the updated federal rules for bonus depreciation, but the benefit is not eliminated. Under the BRFA, eligible businesses will claim 20% of eligible investments in tax year 2026—the pre-OBBBA federal and state law for tax year 2026—instead of the 100% federal rate created by the OBBBA. The state will then permanently use the 20% rate for bonus depreciation. Bonus depreciation remains a benefit that only manufacturing companies can access on the Maryland tax return.
• SB704– This bill authorizes a qualified recipient, within the meaning of the Maryland estate tax exclusion for qualified agricultural property, to transfer legal ownership of qualified agricultural property to a limited liability company (LLC) without estate tax recapture if (1) the ownership of the LLC consists only of qualified recipients, and (2) the qualified agricultural property is used for farming purposes for at least 10 years after the decedent’s death.

Please click here for a full list of bills taking effect on July 1, 2026. Please note that if you operate a business engaged in the sale of alcoholic beverages, changes to local alcohol laws generally take effect on July 1 as well.

Contact State Director Mike O’Halloran with any questions about these or other bills enacted by the General Assembly this past session.