Taxation - Ultra-High-Net-Worth Individual Surtax and Wealth Tax

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*hb1238*

HOUSE BILL 1238
Q3, Q7 6lr3330

By: Delegates Acevero, Amprey, Martinez, Roberson, Woods, and Young
Introduced and read first time: February 11, 2026
Assigned to: Ways and Means

A BILL ENTITLED

AN ACT concerning 1

Taxation – Ultra–High–Net–Worth Individual Surtax and Wealth Tax 2

FOR the purpose of imposing a surtax on the Maryland taxable income of certain 3
ultra–high–net–worth individuals; providing for the calculation, administration, and 4
enforcement of the surtax; imposing a one–time wealth tax on the amount by which 5
the net worth of a Maryland resident exceeds a certain amount; authorizing the 6
Comptroller to adopt regulations providing f or the calculation, administration, 7
collection, and enforcement of the one–time wealth tax; and generally relating to an 8
ultra–high–net–worth individual surtax and wealth tax. 9

BY adding to 10
Article – State Finance and Procurement 11
Section 7–332 12
Annotated Code of Maryland 13
(2021 Replacement Volume and 2025 Supplement) 14

BY repealing and reenacting, without amendments, 15
Article – Tax – General 16
Section 10–101(a) and 10–601 17
Annotated Code of Maryland 18
(2022 Replacement Volume and 2025 Supplement) 19

BY adding to 20
Article – Tax – General 21
Section 10–101(b–1), (i–1), (p), and (q), 10–105(e), and 10–831 22
Annotated Code of Maryland 23
(2022 Replacement Volume and 2025 Supplement) 24

BY repealing and reenacting, with amendments, 25
Article – Tax – General 26
Section 10–101(n) and 10–102 27
2 HOUSE BILL 1238

Annotated Code of Maryland 1
(2022 Replacement Volume and 2025 Supplement) 2

Preamble 3

WHEREAS, The General Assembly finds that the State of Maryland faces a 4
significant structural budget deficit over the coming year that is driven by long –term 5
obligations in education, health care, transportation, and public employee benefits; and 6

WHEREAS, The General Assembly finds that the federal funding that has 7
historically supported State and local services is projected to be more volatile or decline as 8
temporary federal programs expire and federal deficit–reduction efforts intensify; and 9

WHEREAS, The General Assembly finds that reliance on uncertain federal funding 10
places core State responsibilities at risk, including implementing the Blueprint for 11
Maryland’s Future, providing behavioral health care, and making critical infrastructure 12
investments; and 13

WHEREAS, The General Assembly finds that individuals with extreme 14
concentrations of wealth have benefited disproportionately from national and global 15
economic trends, including federal tax and monetary policies, while many Maryland 16
residents continue to suffer from housing instability, inadequate access to behav ioral 17
health care, and under–resourced schools; and 18

WHEREAS, The General Assembly intends to remedy these findings by establishing 19
a one–time tax on extreme wealth to stabilize Maryland’s fiscal outloo k, thereby reducing 20
the State’s structural budget def icit and cushioning reductions in federal funding, and by 21
ensuring that ultra –high–net–worth Maryland residents contribute at least the same 22
effective tax rate as the median effective tax rate paid by all Maryland residents ; now, 23
therefore, 24

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 25
That the Laws of Maryland read as follows: 26

Article – State Finance and Procurement 27

7–332. 28

(A) IN THIS SECTION , “FUND” MEANS THE MARYLAND STRATEGIC 29
INVESTMENT AND STABILIZATION FUND. 30

(B) THERE IS A MARYLAND STRATEGIC INVESTMENT AND STABILIZATION 31
FUND. 32

HOUSE BILL 1238 3

(C) THE PURPOSE OF THE FUND IS TO REDUCE THE STATE’S STRUCTURAL 1
BUDGET DEFICIT AND O FFSET REDUCTIONS IN OR LIMITATIONS ON FE DERAL 2
FUNDING FOR STATE–ADMINISTERED PROGRAMS. 3

(D) THE SECRETARY OF BUDGET AND MANAGEMENT SHALL ADMINISTER 4
THE FUND. 5

(E) (1) THE FUND IS A SPECIAL , NONLAPSING FUND THAT IS NOT 6
SUBJECT TO § 7–302 OF THIS ARTICLE. 7

(2) THE STATE TREASURER SHALL HOLD THE FUND SEPARATELY , 8
AND THE COMPTROLLER SHALL ACCOUNT FOR THE FUND. 9

(F) THE FUND CONSISTS OF: 10

(1) REVENUE DISTRIBUTED TO THE FUND FROM THE WEALTH TAX 11
IMPOSED UNDER SECTION 2 OF CHAPTER ____ (H.B. ___) (6LR3330) OF THE ACTS 12
OF THE GENERAL ASSEMBLY OF 2026; 13

(2) MONEY APPROPRIATED IN THE STATE BUDGET TO THE FUND; AND 14

(3) ANY OTHER MONEY FROM ANY OTHER SOURCE ACC EPTED FOR 15
THE BENEFIT OF THE FUND. 16

(G) (1) EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS SUBSECTION, 17
THE FUND MAY BE USED ONLY TO REDUCE THE STATE’S STRUCTURAL BUDGET 18
DEFICIT AND OFFSET REDUCTIONS IN OR LIMITATIONS ON FEDERAL FUNDING FOR 19
STATE–ADMINISTERED PROGRAMS. 20

(2) FOR ANY FISCAL YEAR THAT THE FUND IS NOT NEEDED FOR THE 21
PURPOSES DESCRIBED UNDER PARAGRAPH (1) OF THIS SUBSECTION, AS CERTIFIED 22
BY THE BOARD OF REVENUE ESTIMATES, THE FUND MAY BE USED FOR: 23

(I) EDUCATION FUNDING AN D IMPLEMENTATION OF THE 24
BLUEPRINT FOR MARYLAND’S FUTURE; 25

(II) BEHAVIORAL HEALTH WO RKFORCE EXPANSION AN D 26
COMMUNITY–BASED SERVICES; 27

(III) AFFORDABLE HOUSING A ND CLIMATE –RESILIENT 28
INFRASTRUCTURE; AND 29

(IV) SMALL BUSINESS AND INNOVATION GRANTS. 30
4 HOUSE BILL 1238

(H) (1) THE STATE TREASURER SHALL INVEST THE MONEY OF THE FUND 1
IN THE SAME MANNER AS OTHER STATE MONEY MAY BE INVESTED. 2

(2) ANY INTEREST EARNINGS OF THE FUND SHALL BE CREDITED TO 3
THE GENERAL FUND OF THE STATE. 4

(I) EXPENDITURES FROM THE FUND MAY BE MADE ONLY IN ACCORDANCE 5
WITH THE STATE BUDGET. 6

Article – Tax – General 7

10–101. 8

(a) In this title the following words have the meanings indicated. 9

(B–1) “ASSETS” INCLUDES: 10

(1) PUBLICLY TRADED SECURITIES; 11

(2) PRIVATELY HELD BUSINESS INTERESTS; 12

(3) REAL PROPERTY; 13

(4) INTERESTS HELD IN TRUSTS; 14

(5) TANGIBLE PERSONAL PROPERTY; AND 15

(6) INTELLECTUAL PROPERTY. 16

(I–1) “NET WORTH” MEANS THE FAIR MARKET VALUE OF ALL ASSETS OWNED 17
OR CONTROLLED BY AN INDIVIDUAL LESS ALL LIABILITIES OF THE INDIVIDUAL. 18

(n) (1) “State income tax” means the State tax on income imposed under this 19
title. 20

(2) “STATE INCOME TAX ” INCLUDES THE ULTRA–HIGH–NET–WORTH 21
INDIVIDUAL SURTAX. 22

(P) “ULTRA–HIGH–NET–WORTH INDIVIDUAL” MEANS AN INDIVIDUAL WITH 23
A WORLDWIDE NET WORTH THAT EXCEEDS $1,000,000,000 ON THE LAST DAY OF THE 24
TAXABLE YEAR. 25

HOUSE BILL 1238 5

(Q) “ULTRA–HIGH–NET–WORTH INDIVIDUAL SURTAX” MEANS THE SURTAX 1
IMPOSED UNDER § 10–102(B) OF THIS SUBTITLE. 2

10–102. 3

(A) Except as provided in § 10 –104 of this subtitle, a tax is imposed on the 4
Maryland taxable income of each individual and of each corporation. 5

(B) IN ADDITION TO THE TA X IMPOSED UNDER SUBS ECTION (A) OF THIS 6
SECTION, A SURTAX IS IMPOSED ON THE MARYLAND TAXABLE INCO ME OF EACH 7
MARYLAND RESIDENT WHO IS AN ULTRA–HIGH–NET–WORTH INDIVIDUAL. 8

10–105. 9

(E) (1) (I) IN THIS SUBSECTION TH E FOLLOWING WORDS HA VE THE 10
MEANINGS INDICATED. 11

(II) “MARYLAND EFFECTIVE IN COME TAX RATE ” MEANS THE 12
TOTAL AMOUNT OF STATE AND COUNTY INCOME TAX DUE FOR THE T AXABLE YEAR 13
DIVIDED BY THE TAXPA YER’S MARYLAND TAXABLE INCO ME FOR THE TAXABLE 14
YEAR. 15

(III) “MARYLAND FAIR SHARE I NCOME TAX RATE ” MEANS THE 16
MEDIAN EFFECTIVE MARYLAND INCOME TAX R ATE PAID BY ALL MARYLAND 17
RESIDENTS FOR THE MOST RECENT TAXABLE YEAR FOR WHICH DATA IS AVAILABLE. 18

(2) (I) ON OR BEFORE DECEMBER 31 EACH YEAR , THE 19
COMPTROLLER SHALL DET ERMINE AND PUBLISH ON THE COMPTROLLER’S 20
WEBSITE THE MARYLAND FAIR SHARE INCOME TAX RATE FOR THE NEXT YEAR. 21

(II) THE COMPTROLLER SHALL ADO PT REGULATIONS THAT 22
SPECIFY HOW THE MARYLAND FAIR SHARE INCOME TAX RATE IS DETERMINED. 23

(3) THE ULTRA–HIGH–NET–WORTH INDIVIDUAL SUR TAX RATE IS 24
EQUAL TO THE MARYLAND FAIR SHARE INCOME TAX RATE MINU S THE 25
ULTRA–HIGH–NET–WORTH INDIVIDUAL ’S MARYLAND EFFECTIVE IN COME TAX 26
RATE. 27

10–601. 28

Except as provided in § 10 –105(d) of this title and except as otherwise provided in 29
this subtitle, a person shall compute the State income tax by applying the tax rates in § 30
10–105 of this title to Maryland taxable income. 31

6 HOUSE BILL 1238

10–831. 1

(A) THE COMPTROLLER MAY REQUI RE A RESIDENT TO FIL E WITH THE 2
RESIDENT’S INCOME TAX RETURN A NET WORTH DIS CLOSURE STATEMENT 3
CONTAINING THE INFORMATION THE COMPTROLLER REQUIRES FOR THE PURPOSE 4
OF DETERMINING APPLI CABILITY OF THE ULTR A–HIGH–NET–WORTH INDIVIDUAL 5
SURTAX. 6

(B) (1) THE COMPTROLLER MAY EVALUAT E ANY TRANSFER OF AS SETS 7
BY A RESIDENT THAT O CCURS WITHIN 2 YEARS OF THE START O F A TAXABLE YEAR 8
TO DETERMINE WHETHER THE TRANSFER WAS FOR THE SOLE PURPOSE OF 9
AVOIDING THE ULTRA–HIGH–NET–WORTH INDIVIDUAL SURTAX. 10

(2) IF THE COMPTROLLER DETERMINES THAT THE TRANSFER UNDER 11
PARAGRAPH (1) OF THIS SUBSECTION IS FOR THE SOLE PURPOSE OF AVOIDING THE 12
ULTRA–HIGH–NET–WORTH INDIVIDUAL SURTAX, THE ULTRA–HIGH–NET–WORTH 13
INDIVIDUAL SURTAX SHALL BE IMPOSED ON THE MARYLAND TAXABLE INCOME OF 14
THE RESIDENT. 15

SECTION 2. AND BE IT FURTHER ENACTED, That: 16

(a) (1) In this section the following words have the meanings indicated. 17

(2) “Assets” include: 18

(i) publicly traded securities; 19

(ii) privately held business interests; 20

(iii) real property; 21

(iv) interests held in trusts; 22

(v) tangible personal property; and 23

(vi) intellectual property. 24

(3) “Net worth” means the fair market value of all assets owned or 25
controlled by an individual less all liabilities of the individual. 26

(4) “Resident” has the meaning stated in § 10 –101 of the Tax – General 27
Article. 28

(b) (1) A one–time wealth tax is imposed on the value of the assets of a resident 29
who has a net worth in excess of $1,000,000,000 on the valuation date. 30
HOUSE BILL 1238 7

(2) The valuation date for the tax imposed under this subsection is January 1
1, 2027, or any other date the Comptroller designates by regulation. 2

(c) The tax rate for the tax imposed under this section is: 3

(1) 3% of the amount by which the net worth of a resident exceeds 4
$1,000,000,000 but does not exceed $2,500,000,000; 5

(2) 5% of the amount by which the net worth of a resident exceeds 6
$2,500,000,000 but does not exceed $5,000,000,000; and 7

(3) 6% of the amount by which the net worth of a resident exceeds 8
$5,000,000,000. 9

(d) (1) A resident may pay the tax imposed under this section i n equal 10
installments over a period not to exceed 5 years. 11

(2) The Comptroller shall set a reasonable interest rate for a resident that 12
elects to pay the tax in installment payments. 13

(e) The Comptroller shall distribute the revenue from the tax imposed under this 14
section to the Maryland Strategic Investment and Stabilization Fund established in § 15
7–332 of the State Finance and Procurement Article, as enacted by Section 1 of this Act. 16

(f) (1) The Comptroller shall adopt regulations for the calculation, 17
administration, collection, and enforcement of the tax imposed under this section. 18

(2) The regulations shall establish uniform valuation standards for assets. 19

SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect July 20
1, 2026, and Section 1 of this Act shall be applicable to all taxable years beginning after 21
December 31, 2027. Section 2 of this Act shall remain effective for a period of 6 years and, 22
at the end of Ju ne 30, 2032, Section 2 of this Act, with no further action required by the 23
General Assembly, shall be abrogated and of no further force and effect. 24