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Note: The following article originally appeared on the Altus Group blog. It was written by Karen Syrylo, CPA, director of State and Local Tax and Advisory for Altus Group and a member of the MACPA’s State Tax Committee. She can be reached at karen.syrylo@altusgroup.com or (410) 568-0728.

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In an April 6, 2016 memo from Montgomery County Executive Isiah Leggett to the County Council president, Leggett informed the Council that he was amending the property tax rate increase that he had included in his originally proposed operating budget for fiscal year 2017. His recommended increase is now 2.1 cents per $100 of assessed value, versus his original proposal of a 3.9 cents increase. The memo states that the result of the change is that the average monthly property tax increase for residential property owners is now $20.17 instead of $27.

Leggett explained that his change is due to the state legislature’s passage of Senate Bill 766, which passed on March 26, 2016 and became law on April 7, 2016. The bill reduces the county’s cash requirements by extending the time for the local governments to reimburse the state treasury for the refunds of income tax and interest that are being paid to Maryland residents who were impacted by the U.S. Supreme Court’s 2015 decision in Comptroller v. Wynne (the ruling that requires reduction of the local portion, in addition to the state portion, of the personal income tax for taxes the residents paid in other states on income earned in the other states). Instead of nine quarterly payments starting July 2016, the new schedule allows the counties to pay 20 equal quarterly installments starting March 2019.

The Montgomery County Office of Public Information reports that the change means that Montgomery County will be responsible for only $17 million in payments in fiscal year 2017 instead of an originally planned $50 million payment to the state.

  • County Executive Isiah Leggett’s memo can be found here.
  • Senate Bill 766 can be found here.
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