In last night’s meeting, the Council supported MD state bills SB 807 and HB 1155, which would exempt an individual from the Maryland income tax for a payment by the State Highway Administration (SHA) for the acquisition of a portion of an individual’s property taken as the result of a state transportation project.
Currently, individuals whose entire properties are acquired by SHA through condemnation proceedings are eligible for a one-time capital gains or income tax exclusion (up to $250,000 for single filers and $500,000 for joint filers) on the purchase of new property whereas partial acquisitions are not.
Under current law, individuals who have a portion of their property acquired by SHA are issued compensation for said property and required to pay income taxes on this compensation by filing a form 1099.
This bill would seek to bring into balance the disparity between individuals who have a portion of their property acquired by SHA for a transportation related project and individuals who have their entire property acquired.
While this bill would apply to all SHA transportation related projects throughout the state, it would be well served to particularly address pertinent transportation issues related to Base Realignment and Construction (BRAC), the Purple Line in Montgomery and Prince George’s Counties, the Red Line in the Baltimore area and other miscellaneous acquisitions.
Over 340 land acquisitions – a majority of which are partial – are already planned for Purple Line development alone. As such, it can be reasonably assumed that with the development of the proposed Purple Line route, a number of Prince George’s County, Baltimore City and Montgomery County families and businesses may benefit from this legislation – should it pass into law.
Additionally, a proposed amendment to the bill would expand SB 807 to include all state partial land acquisitions, not only those which are transportation related.