Kids First Act - House Bill 1391 (Chapter 692, Acts of 2008) - This Act requires the Comptroller to send a notice to a taxpayer regarding health programs under certain conditions. The Comptroller must send a notice to a taxpayer with a dependent child, if the taxpayer's income on their tax year 2007 return does not exceed the highest eligibility standard for the Maryland Medical Assistance Program or the Maryland Children's Health Program. The notice must indicate that the dependent child may be eligible for the Maryland Medical Assistance Program or the Maryland Children's Health Program and contain a notice with information on how to enroll. This Act requires the Department of Health and Mental Hygiene to develop this notice. For tax years 2008 and 2009, this Act also requires the Comptroller to include a place on the income tax return where the taxpayer may indicate whether each dependent child for whom they claim an exemption does or does not have health coverage. This Act provides that a taxpayer may not be penalized for not providing this information or for providing inaccurate information. Effective July 1, 2008 and will terminate on June 30, 2011.

College Savings Plans of Maryland - House Bill 1534 (Chapter 548, Acts of 2008) - This Act authorizes the College Savings Plans of Maryland Board to establish a new Maryland Broker-Dealer College Investment Plan, the purpose of which is to provide for a college savings plan distributed by brokers and dealers that allows Maryland taxpayers to deduct contributions to the plan from their state and local taxable income beginning with tax year 2008. A Maryland resident or, at the discretion of the Board, a nonresident of Maryland may participate in and benefit from the Broker-Dealer Plan, the assets and income of which are exempt from state and local taxation. Contributions to this plan may only be made in cash and cash equivalents, and may not exceed the maximum amount set by the Board in accordance with § 529 of the Internal Revenue Code. This Act provides that an account holder of an investment account maintained in the Maryland College Investment Plan and the Maryland Broker-Dealer College Investment Plan may subtract up to $2,500 for each tax year from their Maryland taxable income for contributions made for each qualified designated beneficiary. Excess contributions may be carried over to 10 successive tax years. For purposes of this subtraction limitation, each spouse is treated separately on a joint return such that up to a $5,000 subtraction is allowed per couple per qualified designated beneficiary. On distribution, the distributed amount, including earnings from contributions, used on behalf of the qualified beneficiary or qualified designated beneficiary for qualified higher education expenses are not subject to state taxes. Effective October 1, 2008.

Expanded Income Tax Subtraction for U. S. Coast Guard Auxiliary - Senate Bill 12 (Chapter 344, Acts of 2008) - This Act expands the existing subtraction from Maryland taxable income for qualifying volunteer fire, rescue, or emergency medical services personnel, by decreasing the length of time an individual must have been an active member of the U. S. Coast Guard Auxiliary to be eligible for the subtraction, from 72 months to 36 months within the previous 10 calendar years. This change equalizes the length of service requirement for members of all qualifying volunteer organizations. The U. S. Coast Guard Auxiliary is responsible for providing the Comptroller with a report of which members qualify for the subtraction on or before October 1 of each year. The member must attach a copy of this report to his or her income tax return to qualify for the subtraction from Maryland taxable income. Effective July 1, 2008 for tax years beginning after December 31, 2007.

New 6.25 Percent Tax Rate - Senate Bill 46 (Chapter 10, Acts of 2008 - This Act repeals the sales and use tax on computer services, and adds a new 6.25 percent personal income tax bracket for Maryland taxable income in excess of $1,000,000. This Act provides that for a tax year beginning after December 31, 2007, but before January 1, 2011, the state income tax for an individual, including spouses filing a joint return or a surviving spouse or a head of household, includes a new bracket of 6.25 percent of Maryland taxable income in excess of $1,000,000. Because the new 6.25 percent rate applies retroactively to income for the tax year beginning January 1, 2008, this Act also provides that the Comptroller shall waive any interest or penalty imposed on an individual for underpayment of estimated income tax for calendar year 2008, to the extent that the Comptroller determines that the interest or penalty was incurred because of the new 6.25 percent rate. This Act provides that the rate for withholding by a pass-through entity for each nonresident individual's distributive share or pro-rata share of the pass-through entity's nonresident taxable income is the sum of the 1.25 percent special nonresident tax and the new 6.25 percent individual rate, for a total of 7.5 percent. Effective July 1, 2008 for tax years beginning after December 31, 2007.

Tax Credit for Employer Established Work-Based Learning Programs for Students - Senate Bill 297 (Chapter 571, Acts of 2008) - This Act reestablishes an income tax credit program for approved work-based learning programs for students. For tax years beginning after December 31, 2008, an employer may claim an income tax credit based on the wages paid to secondary or postsecondary students between 16 and 23 years of age who are participating in a work-based learning program approved by the Maryland Department of Education. This income tax credit will be available to both individuals and corporations and may be claimed against only the state income tax and not the local tax. An insurance company may claim a credit against the premium tax. Effective July 1, 2008 for tax years beginning after December 31, 2008.

Lawyer Payments for Taxes and Unemployment Insurance Contributions - Senate Bill 493 (Chapter 410, Acts of 2008) - This Act repeals the requirement that the Maryland Client Protection Fund verify with the Comptroller that each lawyer who pays the annual fee has paid all undisputed taxes and unemployment insurance contributions or has made a payment arrangement. The Act requires the Maryland Client Protection Fund to issue a list to the Comptroller of lawyers that have paid the annual fee. The Act allows the Comptroller to refer lawyers who have not paid all undisputed taxes and unemployment insurance contributions or have not made a payment arrangement for the delinquent amounts to Bar Counsel. The Maryland Client Protection Fund must provide the Comptroller with this list by August 31 of each year. Effective June 1, 2008.

Income Tax Credit for Bio-Heating Oil - Senate Bill 565 (Chapter 140, Acts of 2008) - This Act establishes a credit against the state income tax for an individual or corporation in the amount of three cents for each gallon of bio-heating oil purchased for space or water heating. For purposes of this credit, bio-heating oil means heating oil with a blend of at least 5 percent biodiesel oil. The credit cannot exceed the lesser of $500 or the state income tax for the tax year. An individual may not carry forward any excess credit. The taxpayer must apply to the Maryland Energy Administration (MEA) for an initial credit certificate. The initial credit certificate shall be issued for number of gallons purchased by the taxpayer and must contain the maximum amount of credit that the taxpayer may claim. By January 1, 2009 and each year after, MEA is required to provide the Comptroller with a list of each taxpayer that has been issued an initial credit certificate and the maximum amount of credit allowed for each taxpayer. Effective July 1, 2008 for tax years beginning after December 31, 2007, but before January 1, 2013.

Maryland Individual Tax Preparer Act - Senate Bill 817 (Chapter 623, Acts of 2008) - This Act creates an eight-member State Board of Individual Tax Preparers in the Department of Labor, Licensing, and Regulation to administer a new registration program that requires qualified individuals to register to provide individual tax preparation services. The Governor shall appoint the Board members with the advice of the Department's Secretary, the Comptroller, and the Attorney General. The Board shall adopt rules of professional conduct as appropriate to ensure a high standard for the practice of individual tax preparation; select and administer examinations; establish fees; maintain a list of all authorized individual tax preparers; maintain a record of its proceedings; and maintain records of all complaints regarding individual tax preparers in Maryland. The Board may also adopt any bylaw and regulation necessary to carry out this Act. An individual who provides tax preparation services has until June 1, 2010 to meet registration requirements. Persons licensed by the State Board of Public Accountancy or a licensing authority in another state, persons admitted to practice law in Maryland or another state, persons employed by government in performance of official duties, persons enrolled to practice before the IRS under Circular 230, and persons serving as an assistant to an individual tax preparer or exempted professional are exempted from registration requirements. Effective June 1, 2008.

SALES AND USE TAX

Solar and Geothermal Tax Incentive and Grant Program - House Bill 377 (Chapter 132, Acts of 2008) - This Act increases specified grant limits under the Solar Energy and Geothermal Heat Pump grant programs, exempts the sale of specified solar energy and geothermal equipment from the state sales and use tax, and exempts specified solar energy property from the State and local real property taxes. "Geothermal equipment" means equipment that uses ground loop technology to heat and cool a structure. "Solar energy equipment" means equipment that uses solar energy to heat or cool a structure, generate electricity to be used in a structure, or provide hot water for use in a structure. Solar energy equipment does not include equipment that is part of a nonsolar energy system or that uses any type of recreational facility or equipment as a storage medium, such as a swimming pool or hot tub. Effective July 1, 2008.

Energy Star Product Tax Exemption for Boilers - House Bill 985 (Chapter 180, Acts of 2008) and Senate Bill 456 (Chapter 179, Acts of 2008) This bill expands the definition of "Energy Star product" to include boilers, for the purpose of excluding sales of boilers from the sales and use tax during the tax-free weekend in February of each year, beginning in calendar year 2011. Effective July 1, 2008.

BOXING AND WRESTLING TAX

Mixed Martial Arts Regulation by State Athletic Commission - House Bill 795 (Acts of 2008)and Senate Bill 649 (Acts of 2008) These Acts require an individual to be licensed by the State Athletic Commission in order to participate in a contest as a mixed martial arts contestant. The Commission shall adopt regulations to ensure the safety of individuals who participate in amateur or professional mixed martial arts contests. These Acts provide for the inclusion of a "mixed martial arts contest" in the definition of "boxing or wrestling contest." The boxing and wrestling tax is now extended to gross receipts derived from a charge for admission to mixed martial arts contests in Maryland, and from charges to view the telecast of mixed martial arts contests in Maryland regardless of the origin of the telecast. Effective October 1, 2008.