Maryland State Wire

Small business owners in Maryland will face new tax changes as of July 1, following the passage of the Budget Reconciliation and Financing Act (BRFA) during the 2025 legislative session. These changes include adjustments to personal income tax brackets, a surcharge on capital gains, and modifications to itemized deductions.

The BRFA introduces two new tax brackets for personal income and imposes a 2% surcharge on capital gains for households with a federal adjusted gross income (AGI) exceeding $350,000. Additionally, it phases out itemized deductions for households earning more than $200,000 in federal AGI. Another significant change is the expansion of Maryland’s general sales tax to digital and IT services at a rate of 3%.

To assist taxpayers and professionals in understanding these changes, the Office of the Comptroller has developed an online resource page. Webinars were also held for business owners and tax professionals; recordings are available on the Comptroller’s YouTube channel. For further inquiries, individuals can contact Maryland State Director Mike O’Halloran.