Sec. 52-18. Appeal tax court.

(a) (1) The Director of Finance must impose on each transient a tax at the rate of 7 percent of the total amount paid for room rental, by or for the transient, for sleeping accommodations in any hotel or motel that is located in the County.

(2) The County Council by resolution, after a public hearing advertised under Section 52-17(c), may increase or decrease the rate of this tax.

(b) The following words and phrases, when used in this Section, have the following meanings:

Broker means a person, other than the owner or operator of a hotel or motel, that receives, facilitates or arranges payment, directly, indirectly, or through an online platform, for hotel or motel accommodations from a transient who is subject to the tax under subsection (a).

Director means the Director of Finance or the Director’s designee.

Hotel or motel means any hotel, inn, hostelry, tourist home or house, motel, apartment hotel, rooming house, dwelling unit or other lodging place that offers for compensation sleeping accommodations in the County. A hotel or motel does not include:

(1) a hospital, medical clinic, nursing home, rest home, convalescent home, assisted living facility, or home for elderly individuals; or

(2) a facility owned or leased by an organization that is exempt from taxation under section 501(c)(3) of the Internal Revenue Code if the primary use of the facility is other than housing overnight guests.

Hotelkeeper means a person that:

(1) owns or operates a hotel or motel; or

(2) acts as a broker.

Room rental means the total charge required to be paid by a transient for a sleeping accommodation. Room rental includes any service fee, broker’s fee, or other charge or fee required to be paid by the transient regardless of what the charge is called or how the charge is designated. Room rental does not include any optional charge for services in addition to the charge for the use of sleeping space, such as Wi-Fi access, food, beverage, movie rental, or fitness center access. The portion of the total charge, if any, that represents a charge other than room rental must be separately billed.

Transient means an individual who, for any period of 30 or fewer consecutive days, actually occupies a sleeping accommodation.

(c) Every hotelkeeper that receives any payment for a room rental that is subject to a tax under this Section must collect the amount of tax imposed under subsection (a) when payment for the room rental is made. The hotelkeeper must hold the taxes required to be collected by this Section in trust for the County until remitted as required by this Section.

(d) (1) Each hotelkeeper must file a report on a form supplied by the Director. The form must show the amount of room rental payments collected, the amount of tax required by this Section to be collected, and any other information the Director requires to assure that the proper tax has been remitted to the County.

(2) Unless the Director accepts a quarterly report, each hotelkeeper must file a report on or before the last day of each month showing all room rentals during the preceding month.

(3) If a hotelkeeper requests, the Director may, in the Director’s sole discretion, accept a quarterly report showing all room rentals during the 3 months immediately before the month when the report is due. Each hotelkeeper so approved must file a quarterly report on or before the last day of April, July, October, and January.

(4) Each hotelkeeper must remit the full amount of tax due with each report

(e) If any hotelkeeper does not remit to the Director the tax required to be paid by this Section, or does not file a timely report to the Director, the Director must add to the tax due:

(1) interest at the rate of one percent per month on the amount of the tax for each month or part of a month after the tax is due until the tax is paid and the report is files; and

(2) a penalty of 5 percent of the amount of the tax per month or part of a month, not to exceed a total of 25 percent of the tax, until the tax is paid and the report filed.

(f) (1) If a hotelkeeper does not file a required report by the deadline established under subsection (d), the Director may estimate the amount of tax due. The Director may base the estimate on a reasonable projection of room rentals, and may consider rentals reported by other hotelkeepers.

(2) The Director must send a notice of the estimated tax due, including interest and penalty, to the hotelkeeper’s last known address. The hotelkeeper must pay the estimated tax, including any interest and penalty, assessed by the Director within 10 days after the notice is sent.

(g) (1) Each hotelkeeper must preserve, for 3 years, all records necessary to determine the amount of the tax due under this Section.

(2) The Director may inspect any records required to be kept under this Section at any reasonable time.

(h) If a hotel or motel stops doing business or a hotelkeeper disposes of its business, the hotelkeeper must immediately file a report under subsection (d) and pay any tax due.

(i) Each hotelkeeper or transient that does not comply with any provision of this Section has committed a class A violation. A finding of violation under this subsection does not relieve any hotelkeeper or transient of any tax, including any applicable interest or penalty, due under this Section.

(j) At least 7% of the revenue from the tax levied under this Section must be used for the Conference and Visitors Bureau, Inc., as designated by the Council in a budget resolution to promote travel to the County. The County Executive must report to the Council on the use of these funds by March 15 each year. (1975 L.M.C., ch. 38, § 1; 1983 L.M.C., ch. 22, § 56; 1984 L.M.C., ch. 38, § 1; 1987 L.M.C., § 24, § 1; CY 1991 L.M.C., ch. 11, §§ 1 and 4; CY 1991 L.M.C., ch. 25, § 1; 1994 L.M.C., ch. 7, § 1; Council Resolution No. 13-524; 2009 L.M.C., ch. 14, § 1; 2013 L.M.C., ch. 6, § 1; 2015 L.M.C., ch. 25, § 1; 2016 L.M.C., ch. 14, § 1.)

Editor's note— The U.S. Court of Appeals upheld the constitutionality of this statute in United States v. Montgomery County, 761 F.2d 998 (4th Cir. 1985).

See County Attorney Opinion dated 6/17/04-B describing the procedures for approving a tax rate change for admissions and amusements.

1984 L.M.C., ch. 38, § 3 provides as follows: Sec. 3. This Act shall apply to:

(a) All taxes paid within three years prior to the effective date of this Act.

(b) All taxes due and/or assessable for periods within four years prior to the effective date of this Act.

(c) All taxes due, payable, billed or assessed where legal action has been instituted and is pending on the effective date of this Act.

Sec. 52-16A. Admissions and amusement tax.

(a) As authorized by Section 4-102(a)(1) of the Tax-General Article of the Maryland Code, a tax is imposed at a rate set by resolution adopted by the Council and approved by the Executive on the gross receipts derived from any admissions and amusement charge as defined in Section 4-101(b) of the Tax-General Article except to the extent this rate is limited by Section 4-105(b) of the Tax-General Article. If the Executive disapproves a resolution within 10 days after it is adopted and the Council readopts it by a vote of six Councilmembers, or if the Executive does not act within 10 days after the Council adopts it, the resolution takes effect.

(b) In addition to the exemptions listed in Section 4-103 of the Tax-General Article, the following gross receipts are exempt from this tax:

(1) gross receipts used exclusively for community or civic improvement by a not for profit community association as defined by Section 4-104(a) of the Tax-General Article;

(2) gross receipts from any charge for admission to a concert or theatrical event of a not for profit organization organized to present or offer any of the performing arts as defined by Section 4-104(b) of the Tax-General Article;

(3) gross receipts from any admissions and amusement charge by the County Board of Education or Montgomery College, or by any County, bi-county, or municipal government agency, including the Revenue Authority and the Maryland-National Capital Park and Planning Commission;

(4) gross receipts from any admissions and amusement charge levied by an arts and entertainment enterprise or qualifying residing artist in an arts and entertainment district designated under state law;

(5) gross receipts from any public daily fee golf course for which admission or a playing fee is charged; and

(6) gross receipts from any activity related to agricultural tourism for which admission is charged. Agricultural tourism means the act of visiting a farm, vineyard, winery, or orchard for entertainment, education, or participation in agricultural activities. Agricultural tourism does not include any activity at a County fair.

(c) Revenue from the admissions and amusement tax set at a rate of 7 percent or less may be used for General Fund purposes. Additional revenue generated from levying the tax at a higher rate must be used to support, encourage, and promote arts and humanities in the County, including projects, performances, historic and heritage preservation, and other activities that advance the artistic, cultural, and intellectual environment in the County. The Council must decide in the annual operating budget how these funds are administered. (Res. No. 7-832; Res. No. 7-1079; Res. No. 8-237; Res. No. 8-1975; Res. No. 12-431; 1999 L.M.C., ch. 8, § 1; 2002 L.M.C., ch. 1, § 1; 2004 L.M.C., ch. 7; 2007 L.M.C., ch. 9, § 1.)

Editor's note—Section 52-16A is cited in Comptroller of the Treasury v. Clyde's of Chevy Chase, 377 Md. 471, 833 A.2d 1014 (2003). In Twinbrook Swimming Pool Corp. v. Comptroller of the Treasury, Admissions Tax Division, 274 Md. 88, 333 A.2d 49 (1979), it was held that where a fee paid which is not related to the use of a swimming pool, i.e. where the same fee is paid regardless of the frequency of the use of the pool, is not subject to the above tax.

Sec. 52-16B. Recordation Tax.

(a) Rates. The rates and the allocations of the recordation tax, levied under Md. Tax- Property Code §§12-101 to 12-118, as amended, are:

(1) for each $500 or fraction of $500 of consideration payable or of the principal amount of the debt secured for an instrument of writing, including the amount of any mortgage or deed of trust assumed by a grantee;

(A) $2.08, of which the net revenue must be reserved for and allocated to the County general fund; and

(B) $2.37, of which the net revenue must be reserved for and allocated to the cost of capital improvements to public schools; and

(2) if the consideration payable or principal amount of debt secured;

(A) exceeds $500,000 and is less than or equal to $600,000, an additional $2.30 for each $500 or fraction of $500 of the amount over $500,000; and

(B) exceeds $600,000 and less than or equal to $750,000, an additional $5.75 for each $500 or fraction of $500 of the amount over $600,000; and

(C) exceeds $750,000 and less than or equal to $1,000,000, an additional $6.33 for each $500 or fraction of $500 of the amount over $750,000; and

(D) exceeds $1,000,000, an additional $6.90 for each $500 or fraction of $500 of the amount over $1,000,000

(3) Allocation of revenue collected. The net revenue collected under paragraph (2) must be reserved for and allocated as follows:

(A) one-third for the cost of County government capital improvements; and

(B) one-third for rent assistance for low and moderate income households, which must not be used to supplant any otherwise available funds; and

(b) Exemption. The first $100,000 of the consideration payable on the conveyance of any owner-occupied residential property is exempt from the recordation tax if the buyer of that property is an individual and intends to use the property as the buyer’s principal residence by actually occupying the residence for at least 7 months of the 12-month period immediately after the property is conveyed. (2002 L.M.C., ch. 9, § 1; 2007 L.M.C., ch. 17, § 1; 2016 L.M.C., ch. 19, § 1; 2023 L.M.C., ch. 15, § 1.)

Editor’s note—2023 L.M.C., ch. 15, § 2, states: Effective date. This Act takes effect on October 1, 2023, and must apply to any transaction which occurs on or after October 1, 2023.

2016 L.M.C., ch. 19, § 2, states: The allocation of recordation tax revenue made in Section 1 replaces each allocation of recordation tax revenue established in previously enacted uncodified legislation.

2007 L.M.C., ch. 17, § 2, states: This Act takes effect on March 1, 2008, and applies to any transaction which occurs on or after that date.

2007 L.M.C., ch. 17, § 3, amended by 2009 L.M.C., ch. 17, § 1, further amended by 2010 L.M.C., ch. 19, § 1, and further amended by 2011 L.M.C., ch. 8, § 1, states: Allocation of Revenue. During any fiscal year that begins on or after July 1, 2012, the net revenue attributable to the increase in the rate of the recordation tax enacted in this Act must be reserved for and allocated equally to:

(a) the cost of County government capital improvements; and

(b) rental assistance programs for low- and moderate-income households, which must not be used to supplant any otherwise available funds.

2002 L.M.C., ch. 9, § 3, states:

Sec. 3. Effect of Previous Actions. Effective July 1, 2002, this Act supersedes Resolution No. 7-182. Any action taken under that resolution before that date, including the levy and collection of the recordation tax, is ratified and confirmed as if that action had been taken under authority of a law enacted by the County Council.

2002 L.M.C., ch. 9, § 4, amended by 2003 L.M.C., ch. 21, § 1, further amended by 2003 L.M.C., ch. 33, § 1, and further amended by 2010 L.M.C., ch. 19, § 2, states:

Sec. 4. Allocation of Revenue. During any fiscal year that begins on or after July 1, 2004, except a fiscal year that begins on July 1, 2010, the net revenue attributable to the increase in the rate of the recordation tax enacted in this Act must be reserved for and allocated to the cost of capital improvements to schools and educational technology for Montgomery College in the form of debt service for debt-eligible projects and current revenue for debt-eligible or non-debt-eligible projects.

Former Section 52-16B, relating to a beverage container tax, was repealed by §§ 1 and 2 of 1994 L.M.C., ch. 21. The section was derived from 1976 L.M.C., ch. 22, § 1; 1976 L.M.C., ch. 43, § 2; 1977 L.M.C., ch. 4, § 1; 1978 L.M.C., ch. 8, § 1; 1983 L.M.C., ch. 22, § 56; 1984 L.M.C., ch. 24, § 50; 1984 L.M.C., ch. 27, § 33; and CY 1991 L.M.C., ch. 10, § 1.

Editor’s note—Former Section 52-16C, Real property tax recapture, derived from 1977 L.M.C., ch. 41, § 1, was repealed by 2010 L.M.C., ch. 49, § 1, after it was ruled invalid in Montgomery County Board of Realtors v. Montgomery County, 287 Md. 101, 411 A.2d 97 (1980).

Sec. 52-17. Additional taxing powers; prohibited taxes.

(a) Generally. The County Council for Montgomery County is hereby empowered and authorized to have and exercise, within the limits of the County, in addition to any and all taxing powers heretofore granted by the General Assembly, the power to tax to the same extent as the state has or could exercise said power within the limits of the County as a part of its general taxing power, which includes the power to impose and provide for the collection of development impact taxes for financing, in whole or in part, the capital costs of additional or expanded public transportation facilities required to accommodate new construction or development; and to provide by resolution for the imposition, assessment, levy and collection of any tax or taxes authorized by this Section; and from time to time to grant exemptions and to modify or repeal existing or future exemptions.

(b) Exceptions. Provided, that the Council shall not have the power to impose any tax upon any alcoholic beverages, intangible personal property or upon the subject matter of Annotated Code of Maryland, 1957, Sections 135 to 157 of Article 56 (Gasoline Tax); Sections 3-601.1, 3-801 to 3-824, 11-706, 14-112 of Article 66 1/2 (Motor Vehicle Registration); Section 3-831 of Article 66 1/2 (Titling Tax); Sections 181 to 190 of Article 56 and Section 273 of Article 81 (Motor Vehicle Taxation); Section 9(32) of Article 81 (Class A and Class D Motor Vehicles); Sections 279 to 323 of Article 81 (Tax on Incomes); Article 78B (Horseracing and Pari-mutuel Betting); Sections 194 and 195 of Article 81 (Bonus Tax); Sections 197 to 201 of Article 81 (Tax on Franchise to a Corporation); Sections 129 and 130 of Article 23 (Recording Corporate Papers); Section 128 of Article 81 (Deposits of Savings Banks); Sections 135 to 143 of Article 81 (Insurance Premiums); Sections 149 to 193 of Article 81 (Inheritances); Article 62A (Estate Tax); or Section 144 of Article 81 (Tax on Commissions of Executors and Administrators); or Sections 431 to 464 of Article 81 (State Tobacco Tax Act) or Sections 12-A and 12-B of Article 81 (Sales Tax and Gross Receipt Tax on Advertising, etc.) to the extent applicable; or any other tax prohibited to a political subdivision of this state by any applicable statewide law; nothing in this Section shall be construed to authorize the County to impose a tax upon the gross receipts of any person in the County; provided, however, that the County in taxing the receipts, from motor vehicle operations, may only tax receipts from operations of motor vehicles having a permit from the Public Service Commission of Maryland authorizing both the taking on and discharging of passengers at more than one point within the County and/or the transportation of passengers between 2 or more points within the County.

(c) Advertisement required. On or after June 1, 1963, no tax shall be levied or imposed by the County pursuant to any of the provisions of this Section unless the levy or imposition of the tax is advertised for 3 consecutive weeks in 2 newspapers having a general circulation in the County. After such advertising a public hearing shall be held concerning the levy and imposition of such tax. The provisions of this Section shall not apply to any tax levied and imposed prior to June 1, 1963.

(d) (1) From the revenues derived from any hotel and motel room rental tax imposed by the County, the County shall distribute 50% of the revenue attributable to a hotel or motel located in a municipal corporation or in a special taxing district created by the General Assembly to the Municipal Corporation or special taxing district.

(2) Paragraph (1) of this subsection shall apply only to tax revenues generated from hotels and motels located in any area that is added to the County by an alteration of the boundary line between Montgomery County and any other County after July 1, 1995.

(e) The Council may not impose a tax on the sale of a right to occupy a room or lodgings as a transient guest at a dormitory or other lodging facility that:

(1) is operated solely in support of the headquarters, a training facility, a conference facility, an awards facility, or the campus of a corporation or other organization;

(2) provides lodging solely for employees, contractors, vendors, and other invitees of the corporation that owns the dormitory or lodging facility; and

(3) does not offer lodging services to the general public. (Mont. Co. Code 1965, §2-129; 1963, ch. 808, § 1; 1990, ch. 707, § 1; 1995, ch. 55, § 1; 2013, ch. 510, §1.)

Editor's note—In GenOn Mid-Atlantic v. Montgomery County, 650 F.3d 1021 (2011), the Court cited Section 52-17 in declaring the carbon emissions tax in Sec. 52-96 to be a regulatory fee.

In Montgomery County v. Maryland Soft Drink Ass’n., Inc., 281 Md. 116, 377 A.2d 486 (1977), the court upheld the constitutionality of the Maryland General Assembly's grant to the County (codified in § 52-17) of the broad power to impose excise taxes (non-property taxes) in addition to the power of chartered counties to impose property taxes set forth in the Express Powers Act, Md. Code Ann., Art. 25A, § 5(O). The same broad taxing power was granted by the General Assembly to Baltimore City and Baltimore County and this was confirmed in Hampton Associates v. Baltimore County, 66 Md. App. 551, 558, 505 A.2d 537 (1986), cert. denied, 307 Md. 406, 514 A.2d 24 (1986), Kimball-Tyler v. Balto. City, 214 Md. 86, 92, 96, 133 A.2d 433 (1957), State Tax Commission v. Armco, 226 Md. 533, 544-545, 174 A.2d 327 (1961). The Maryland appellate court held that the County Council had the authority to impose the development impact tax under ch. 808, Laws of 1963, codified in §§ 52-47 through 52-59 of the County Code, in Montgomery County v. Waters Landing Limited Partnership, 99 Md. App. 1, 635 A.2d 48, aff’d., 337 Md. 15, 650 A2d 712 (1994).

Many of the laws referenced in Sec. 52-17(b) have been repealed or moved to a different section of the Annotated Code of Maryland, as follows: Art. 56, §§ 135 to 157 (Gasoline Tax) appear in Tax-Gen. § 9-101 et seq.; Art. 66 ½, §§ 3-601.1, 3-801 to 3-824, 11-706, and 14-112 (Motor Vehicle Registration) appear in Transp. §§ 13- 623, 13-617, 13-901 to 13-946, 21-706, and 22-228; Art. 66 ½, § 3-831 (Titling Tax) appears in Transp. §§ 13-809 to 13-811 and 13-814; Art. 81, § 273 (Motor Vehicle Taxation) was repealed in 1981; Art. 81, § 9(32) (Class A and Class D Motor Vehicles) appears generally in Tax Prop., Title 7; Art. 81, §§ 279 to 323 (Tax on Incomes) appear in Tax-Gen., Titles 10 and 13, Nat. Res. § 5-219, Corp. & Assns. §§ 1-203, 8-204, and 8-403, and Cts. & Jud. Proc. § 5-106; Art. 78B (Horseracing and Pari-mutuel Betting) appears in the Bus. Reg. Art.; Art. 81, §§ 194 and 195 (Bonus Tax) were repealed in 1985; Art. 81, §§ 197-201 (Tax on Franchise to a Corporation) were repealed in 1972; Art. 23, §§ 129 and 130 (Recording Corporate Papers) were repealed in 1975 and portions moved to the Corp. and Assns. Art.; Art. 81, § 128 (Deposits of Savings Banks) appears in Tax-Gen., Title 8; Art. 81, §§ 135 to 143 (Insurance Premiums) appear in Tax-Gen. art. 48A §§ 631 to 640; Art. 81, §§ 149 to 193 (Inheritances) appear in Tax-Gen., Title 7; Art. 62A (Estate Tax) appears in Tax-Gen., Title 7; Art. 81, § 144 (Tax on Commissions of Executors and Administrators) appears in Tax-Gen. §§ 7-401, 7-403, and 7-405; Art. 81, §§ 431 to 464 (State Tobacco Tax Act) appear in Tax-Gen., Titles 1, 2, 12, and 13 and Art. 56 ch. 6; Art. 81, §§ 12-A and 12-B (Sales Tax and Gross Receipt Tax on Advertising, etc.) appear in Art. 24, §§ 9-201 and 9-202.

Sec. 52-18. Appeal tax court.

(a) There is hereby created an appeal tax court to be known as "the appeal tax court for Montgomery County, Maryland."

(b) The appeal tax court for the county, shall consist of three (3) members, to be appointed by the county executive, subject to the confirmation of the county council, one (1) of such members to be designated by the county executive as chairman, subject to the confirmation of the county council.

(c) Each member of the appeal tax court for the county appointed after June 9, 1953 shall be paid for the performance of public duties imposed upon him by virtue of his appointment the sum of twenty dollars ($20.00) for each meeting of the appeal tax court which the member attends in person, but not to exceed twenty dollars ($20.00) for any one (1) day or three thousand dollars ($3,000.00) during any fiscal year; except, that each member of the appeal tax court appointed or re-appointed after May 30, 1960 shall be paid for the performance of public duties imposed upon him by virtue of his appointment the sum of thirty dollars ($30.00) for each meeting of the appeal tax court which the member attends in person, but not to exceed thirty dollars ($30.00) for any one (1) day or three thousand dollars ($3,000.00) during any fiscal year. (Mont. Co. Code 1965, § 84-2; 1971 L.M.C., ch. 15, § 1.)

Sec. 52-19. Moderate-income multifamily rental housing facility real property tax deferral.

(a) For the purpose of this section, a moderate-income multifamily rental housing facility is a rental apartment facility which (1) has five (5) or more dwelling units, (2) has entered into an agreement with the housing opportunities commission to participate in the section 8 housing assistance payments program for existing housing and (3) as of the January 1 preceding the tax year for which the tax deferral is sought has at least fifteen (15) percent of its units renting at or below the fair market rents for existing facilities as established by the department of housing and urban development for Montgomery County under section 8 of the United States Housing Act of 1937, as amended.

(b) Owners of rental facilities may apply for a deferral of Montgomery County real property taxes due and payable for a rental facility. Taxes eligible for the deferral shall, where applicable, consist of:

(1) General county tax.

(2) Washington Suburban Transit District tax.

(3) Fire district tax.

(4) Advance land acquisition tax.

(5) Metropolitan district tax.

(6) Regional district tax.

(7) Recreation district tax.

(8) WSSC sanitary district tax.

(9) Storm drainage district tax.

(10) Suburban district tax.

(c) The amount of taxes which may be deferred for any one (1) year shall be the amount calculated by taking the percentage of dwelling units renting at or below fair market rents as of January 1 to the total number of dwelling units in the facility, and multiplying the percentage by the assessment of the rental facility, and multiplying the product by the applicable tax rates. Where a rental facility consists of two (2) or more buildings, the owner may elect to have the tax deferral calculated separately for each building. The election shall be made at the time of application for the deferral and shall be final for the taxable year for which the deferral is sought.

(d) Interest must accrue on the deferred taxes at the rate specified in Sections 8-421, 10-102, 14-602, and 14-603 of the Tax-Property Article of the Maryland Code.

(e) At no time may the accumulation of deferred taxes and accrued interest exceed fifty (50) percent of the full cash value of the rental facility as determined by the supervisor or assessments for Montgomery County.

(f) All taxes deferred and interest accrued thereon shall be a first lien on the property, having the priority of real property taxes, until paid or otherwise extinguished by operation of law. The taxes are collectible by suit or by tax sale, regardless of any period of limitations imposed under law. In the event of tax sale for nonpayment of taxes, the property shall be sold for all unpaid taxes and interest, including deferred taxes and interest. In addition to being a first lien on the property, the deferred taxes and accrued interest shall be a personal liability of the owner of the property immediately prior to the happening of any of the conditions listed in subsection (g) below.

(g) All taxes deferred and interest accrued thereon shall be due and payable upon any of the following conditions:

(1) The property no longer qualifies as a moderate-income multifamily rental housing facility, as defined above;

(2) The owner fails to submit a timely annual application for deferral;

(3) Title to or controlling interest in the rental facility is conveyed, except in the case of a distribution by will or descent upon the death of the owner;

(4) A notice of intent to establish a condominium regime or create a cooperative housing project is given to tenants; or

(5) The rental facility becomes subject to tax sale.

(h) The director of finance, at the director's discretion, and upon request of the owner, may at any time enter into an installment agreement, in form acceptable to the director, to repay the county the accumulated deferred taxes and accrued interest except where deferred taxes have become due under subsection (g)(3), (4) or (5). All amounts to be paid under an installment agreement (1) shall bear interest at the rate specified in subsection (d); (2) shall remain a first lien on the property; and (3) shall become due and payable upon the happening of any condition listed in subsection (g)(3), (4) or (5) above. Once an installment agreement has been entered into, the property shall not be eligible for further deferral of taxes until all taxes previously deferred and accrued interest have been paid in full. In the event an installment payment agreement is entered into and the payment of any installment becomes delinquent, the property may be sold at tax sale or legal action may be instituted for the remaining balance due under the agreement.

(i) Applications for a tax deferral under this section shall be submitted to the director of finance by the first day of April immediately preceding the taxable year for which a tax deferral is sought to be applied or continued. The application shall include a certification as to the number of units rented at or below fair market rentals as of the prior January 1. Applications shall be on forms acceptable to the director and shall be sworn to by the applicant. The director shall notify the applicant of approval or disapproval.

(j) Any person who knowingly transmits a false or fraudulent application, or statement, or withholds information, in order to obtain a deferral under this section shall be guilty of a misdemeanor and upon conviction thereof shall be fined not more than one thousand dollars ($1,000.00) for each offense or six (6) months in jail or both. In addition, such persons shall be liable for and shall repay to the county any and all amounts of taxes and interest deferred. The county may enforce this provision by propriate civil action; and such persons shall be liable for all fees, costs and expenses of such proceedings.

(k) The county executive is authorized to adopt regulations under method (2) of section 2A-15 of this Code, for the administration of this deferral program. (1981 L.M.C., ch. 24, § 1, 1984 L.M.C., ch. 24, § 50; 2010 L.M.C., ch. 52, § 1; 2016 L.M.C., ch. 7, § 2.)

Editor’s note—Section 52-19 is cited in Montgomery County v. Federal National Mortgage Association, 740 F.3d 914 (4th Cir. 2014).

Sec. 52-20. Residential real property tax deferral—Government-initialized rezonings.

(a) Taxpayers who own, in fee simple, and actually occupy residential real property as their principal place of residence may, upon written application approved as provided below, receive a deferral of due and payable county real property taxes on the property for the levy year July 1, 1981, and thereafter. For the purposes of this section, residential real property includes property owned by the taxpayer adjacent to his residence, provided it is unimproved and not assessed on the basis of agricultural use. The real property on which the residence is located must be included in the property for which deferral is sought, and not more than ten (10) acres in total shall be eligible for the deferral of real property taxes under this program. The amount of taxes which may be deferred pursuant to this section, for any one (1) year, is that amount, as determined by the county's director of finance, to be attributable to an assessment increase resulting directly from a government-initiated change in the zoning classification of the property to a higher intensity use. In determining the applicable increase in assessment, the director shall utilize information to be requested from the office of the supervisor of assessments for Montgomery County relative to the full cash value assessment of the subject property for each triennial cycle based on the residential zoning of the property prior to its reclassification.

(b) County real property taxes eligible for the deferral shall, where applicable, consist of:

(1) General county tax;

(2) Washington Suburban Transit District tax;

(3) Fire district tax;

(4) Advance land acquisition tax;

(5) Metropolitan district tax;

(6) Regional district tax;

(7) Recreation district tax;

(8) Washington Suburban Sanitary District tax;

(9) Storm drainage district tax; and

(10) Suburban district tax.

(c) Interest must accrue on the deferred taxes at the rate specified in the Tax-Property Article, section 14-603 of the Annotated Code of Maryland.

(d) At no time may the accumulation of deferred taxes and accrued interest exceed fifty (50) percent of the current full cash value of the property as determined by the supervisor of assessments for Montgomery County, or a lesser amount elected by the taxpayer by written notice to the director. The election of a lesser amount does not constitute a withdrawal from the program. Where such maximum amounts have been reached, they may continue to be deferred until any of the conditions of subsection (g) occurs.

(e) No penalty shall be charged during the period of the deferral on any taxes deferred pursuant to this section.

(f) All taxes deferred and interest accrued thereon shall be a first lien on the property, having the priority of real property taxes, until paid or otherwise extinguished by operation of law. The deferred taxes and accrued interest are collectible by suit or by tax sale, regardless of any period of limitations imposed under law. In the event of tax sale for nonpayment of taxes, the property shall be sold for all unpaid taxes and interest, including deferred taxes and interest. In addition to being a first lien on the property, the deferred taxes and accrued interest shall be a personal liability of the person or persons who owned the property immediately prior to the occurrence of any of the conditions listed in subsection (g) below.

(g) All taxes deferred and interest accrued thereon shall be due and payable upon any one of the following conditions:

(1) The taxpayer ceases to own the property in fee simple;

(2) The taxpayer ceases to occupy the property as his principal place of residence;

(3) The property becomes subject to tax sale; or

(4) The use of the property changes.

(h) A taxpayer shall be eligible for the tax deferral provided for by this section only if he had a fee simple ownership interest in the property and occupied the property at his principal place of residence for at least twenty-four (24) months immediately prior to the effective date of the zoning resolution as a result of which a tax deferral under this section is sought.

(i) Applications for a tax deferral under this section shall be submitted to the director of finance no later than September 1 of the first tax year in which the taxpayer wishes to participate in the program. The taxpayer may receive a refund, without interest, for deferrable taxes paid for the first tax year. Applications shall be on forms acceptable to the director and shall be sworn to by the taxpayer. The director shall notify the taxpayer of approval or disapproval. Once approved, no further applications are required.

(j) A taxpayer may withdraw from the program by giving written notice to the director and paying all deferred taxes and accrued interest, whereupon the director shall cease deferral of taxes, effective the following tax year; and the taxpayer shall not be eligible for further participation in the program.

(k) Any person who knowingly transmits a false or fraudulent application, or statement, or withholds information, in order to obtain a deferral under this section shall be guilty of a misdemeanor and upon conviction thereof shall be fined not more than one thousand dollars ($1,000.00) for each offense or six (6) months in jail or both. In addition, such persons shall be liable for and shall repay to the county any and all amounts of deferred taxes, and interest and penalties accrued thereon. The county may enforce this provision by appropriate civil action, and such persons shall be liable for all fees, costs and expenses of such proceedings.

(l) Where the council president notifies persons who may be affected by a pending comprehensive rezoning application, the notification shall include notice to the effect that in the event property is rezoned to a higher intensity use, the taxpayer may be eligible for a tax deferral and should contact the county division of revenue for further information.

(m) The county executive is authorized to adopt regulations, under method (2) of section 2A- 15 of this Code, for the administration of this deferral program. (1982 L.M.C., ch. 60, § 1; 1984 L.M.C., ch. 24, § 50; 1986 L.M.C., ch. 18, § 1; 1989 L.M.C., ch. 44, § 1; 1990 L.M.C., ch. 42, § 2; 2016 L.M.C., ch. 7, § 2.)

Editor's note-Section 2 of 1982 L.M.C., ch. 60, reads as follows: "Sec. 2. Notwithstanding anything in this Act to the contrary, applications for the deferral of taxes due and payable on or after July 1, 1981, and subsequent tax years, may be submitted during a sixty-day period beginning on the first day following the effective date of this Act [June 23, 1982]. That portion of the taxes due and payable for such tax years which the director determines could have been deferred and which have been paid may be refunded, without interest."