The 2026 Maryland General Assembly session did not produce the major new tax increases that many businesses were watching for, but it still created meaningful planning issues for business owners, entrepreneurs, investors, nonprofits, and companies preparing for growth.
New laws may affect Maryland tax treatment, State incentives, AI-related business and workforce resources, utility planning, data-driven pricing, and long term operating strategy. For businesses, the practical takeaway is to look beyond whether a law creates a direct new tax or mandate and consider whether it changes the assumptions behind transactions, expansion plans, capital investments, vendor relationships, pricing practices, or compliance risk.
Budget Reconciliation and Financing Act of 2026 (SB 284, cross-filed with HB 392)
The Budget Reconciliation and Financing Act of 2026, or BRFA, is the annual budget related legislation used to implement funding, revenue, and programmatic changes tied to the State budget. This year’s BRFA makes a number of changes to State appropriations, fund transfers, revenue distributions, and tax provisions.
For businesses, one notable tax-related provision involves changes in Maryland income tax treatment of certain federal depreciation benefits. Newly imposed caps on bonus depreciation and disallowance of some special depreciation allowances effectively decouples Maryland from the Federal tax treatment, particularly for businesses that make capital investments, purchase equipment, or rely on depreciation planning should review whether the BRFA affects their Maryland tax position.
The BRFA also affects funding and eligibility for a variety of State programs, including certain economic development, workforce, health care, agricultural, environmental, education, and local government funding provisions. Although many BRFA provisions are budgetary or administrative, the practical effect may be felt by businesses, nonprofits, local governments, and organizations that rely on State grants, reimbursements, tax treatment, or program funding.
Practical impact: Businesses making major purchases, capital investments, or funding-dependent plans should coordinate with tax and business advisors to evaluate whether the BRFA affects Maryland tax treatment, program eligibility, or State funding assumptions.
Effective dates: June 1, 2026 and July 1, 2027
The DECADE Act (SB 388 / HB 898)
One of Governor Moore’s priority initiatives was the Delivering Economic Competitiveness and Advancing Development Efforts Act, or the DECADE Act. The Act is intended to modernize and expand Maryland’s economic development programs so the State can better compete for private sector investment and support key industries, including life sciences, information technology, aerospace, and defense.
The DECADE Act extends or expands several economic development and tax credit programs, including extending the Job Creation Tax Credit Program through January 2032, extending the Employer Security Clearance Costs Tax Credit for tax year 2026, extending the Research and Development Tax Credit for tax years 2026 through 2030, increasing Maryland Economic Development Assistance Authority and Fund assistance, and increasing the Maryland Small Business Development Financing Authority’s financing authority.
The Act also restructures and moves the Sunny Day Program to the Maryland Department of Commerce, where it is rebranded as the Strategic Closing Fund. For businesses that provide, purchase, or structure transactions involving digital goods or technology services, the Act also creates an intercompany exemption from the sales and use tax for certain data and information technology services, digital codes, and digital products.
Practical impact: Businesses planning hiring, expansion, capital investment, research and development activity, or intercompany digital transactions should evaluate whether the Act creates incentive opportunities or reduces tax friction.
Effective dates: June 1, 2026 and July 1, 2026
Maryland Artificial Intelligence Partnership (SB 597)
SB 597 establishes the Maryland Artificial Intelligence Partnership within the University System of Maryland to coordinate AI initiatives involving higher education, State government, workforce development, business development, research, and innovation.
For Maryland businesses and employers, the law is less about immediate compliance and more about future opportunity. The Partnership must develop a strategic plan addressing AI literacy, workforce development, business support, training opportunities, technology extension hubs, and long-term sustainability. Those initiatives may help small and midsize businesses access AI resources, training, partnerships, technical assistance, and infrastructure that would otherwise be difficult to develop internally.
The law also establishes an AI Public Service Fellowship and, subject to certain conditions, an AI Incubation Lab to support State agency use of AI. As public-sector adoption grows, businesses should monitor how AI may affect procurement, agency operations, service delivery, and future regulatory expectations.
Practical impact: Business owners and employers should watch how these programs develop and consider whether their own AI policies, vendor relationships, employee training, and data practices are keeping pace.
Effective date: October 1, 2026
Utility RELIEF Act (HB 1532 / SB 841)
One of the most contentious policy debates of the session involved the Utility RELIEF Act, an omnibus energy bill developed after consolidating several bills aimed at reducing energy costs for Marylanders. The expected savings are approximately $150 annually for ratepayers. The relief is provided by transferring funds from the Strategic Utility Investment Fund, which is funded through the EmPOWER surcharge on utility bills, and reducing the EmPOWER charge.
The Act also temporarily prohibits utilities from requesting rate hikes based on projected spending and limits certain recoverable costs. Advocates argue that these provisions, together with other changes in the Act, will provide additional savings.
The Act makes several changes to existing energy programs, including expanding the definition of entities required to pay for infrastructure upgrades necessary for connection to the grid. This change was primarily directed at data centers, with the stated goal of preventing the cost of utility upgrades from being passed on to residential customers. However, some non-data center businesses whose energy consumption exceeds the new threshold may also be covered. At the same time, the Act provides faster permitting for data centers that supply their own clean energy.
Practical impact: Businesses planning major facilities, energy-intensive operations, data centers, manufacturing sites, or other large-load projects should evaluate utility infrastructure responsibility early in site selection and development planning.
Effective dates: Generally July 1, 2026, with certain emergency provisions effective May 12, 2026
Protection from Predatory Pricing Act (HB 895 / SB 387)
The Protection from Predatory Pricing Act addresses the use of dynamic pricing and consumer personal data in the food retail and third-party delivery context. The law prohibits certain food retailers and third-party delivery service providers from engaging in dynamic pricing for single customers or specific groups of customers and significantly restricts the sing consumer personal data to set prices for consumer goods or services. It also prohibits certain uses of protected class data in connection with offering, advertising, or selling consumer goods or services and requires a mandated disclosure to customers when dynamic pricing or customer data is used. The Act does include carveouts for certain business practices, including loyalty, membership, rewards, or subscription programs.
Violations are treated as unfair, abusive, or deceptive trade practices, which means businesses covered by the law may face enforcement and penalties under Maryland consumer protection law. The Act reflects Maryland’s broader focus on data-driven pricing, artificial intelligence, consumer data, and pricing transparency.
Practical impact: Covered businesses should review pricing practices, consumer data policies, vendor arrangements, advertising practices, and technology tools used to adjust or personalize prices, as well as reconsidering any necessary disclosures to its customers.
Effective date: October 1, 2026
Business Planning Takeaways
For Maryland businesses, the 2026 session underscores the importance of monitoring legislation not only for new taxes or direct regulatory mandates, but also for budget, energy, incentive, technology, workforce development, and consumer protection changes that may affect planning and operations. Businesses should consider whether any of these laws affect current or upcoming transactions, expansion plans, capital investments, AI adoption, workforce training, utility needs, pricing practices, vendor relationships, or tax positions.
Contact Us
For more information about business planning and transactional legislation that may impact you or your business, please contact the Davis, Agnor, Rapaport & Skalny attorney with whom you typically work, or an attorney in our Business Planning & Transactions Practice Group.