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WES MOORE, Governor Ch. 551
Chapter 551
(Senate Bill 704)
AN ACT concerning
Maryland Estate Tax – Qualified Agricultural Property – Transfer to Limited
Liability Company
FOR the purpose of authorizing, for purposes of determining the Maryland estate tax, a
qualified recipient to transfer qualified agricultural property to a limited liability
company; providing that qualified agricultural property transferred in accordance
with this Act is not subject to estate tax recapture under certain circumstances; and
generally relating to the Maryland estate tax.
BY repealing and reenacting, with amendments,
Article – Tax – General
Section 7–309(c)
Annotated Code of Maryland
(2022 Replacement Volume and 2025 Supplement)
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
That the Laws of Maryland read as follows:
Article – Tax – General
7–309.
(c) (1) (i) In this subsection the following words have the meanings
indicated.
(ii) “Farming purposes” has the meaning stated in § 2032A(e)(5) of
the Internal Revenue Code.
(iii) “Qualified agricultural property” means real or personal
property that is used primarily for farming purposes.
(iv) “Qualified recipient” means an individual who enters into an
agreement to use qualified agricultural property for farming purposes after the decedent’s
death.
(2) The Maryland estate tax shall be determined by excluding from the
value of the gross estate up to $5,000,000 of the value of qualified agricultural property
that passes from the decedent to or for the use of a qualified recipient.
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Ch. 551 2026 LAWS OF MARYLAND
(3) If the value of qualified agricultural property that passes from the
decedent to or for the use of a qualified recipient exceeds $5,000,000, the Maryland estate
tax imposed on the Maryland estate of the decedent may not exceed the sum of:
(i) 16% of the amount by which the decedent’s taxable estate,
excluding the value of all qualified agricultural property that passes from the decedent to
or for the use of a qualified recipient, exceeds the applicable exclusion amount specified
under subsection (b) of this section; and
(ii) 5% of the amount by which the value of qualified agricultural
property that passes from the decedent to or for the use of a qualified recipient exceeds
$5,000,000.
(4) (i) The Maryland estate tax shall be recaptured as provided in this
paragraph if, within 10 years after the decedent’s death, the qualified agricultural property
ceases to be used for farming purposes.
(ii) The amount of the estate tax imposed under this paragraph shall
be the additional Maryland estate tax that would have been payable at the time of the
decedent’s death but for the provisions under paragraphs (2) and (3) of this subsection.
(5) (I) A QUALIFIED RECIPIENT MAY TRANSFER LEGAL
OWNERSHIP OF QUALIFIED AGRICULTURAL PROPERTY TO A LIMITED LIABILITY
COMPANY.
(II) A TRANSFER OF QUALIFIED AGRICULTURAL PROPERTY IN
ACCORDANCE WITH SUBPARAGRAPH (I) OF THIS PARAGRAPH IS NOT SUBJECT TO
RECAPTURE UNDER PARAGRAPH (4) OF THIS SUBSECTION IF:
1. THE OWNERSHIP OF THE LIMITED LIABILITY
COMPANY 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.
(6) The Comptroller shall adopt regulations to implement this subsection.
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July
1, 2026, and shall be applicable to decedents dying after June 30, 2026 July 1, 2027.
Approved by the Governor, May 12, 2026.
–2–Every fact on this page links to its source, starting with the official bill record.