A bipartisan group of Senate leaders is backing legislation that would exempt family farms from Maryland’s estate tax.
“When someone who owns a farm passes, so often the farm is lost to congestion, to sprawl,” said Senate President Thomas V. Mike Miller Jr., D-Calvert and Prince George’s.
The Senate’s bill will exempt up to $5 million in agricultural property passed to a “qualified recipient” who will use the property for farming purposes.
If the property is sold and not used as a farm within a decade, the estate tax would then have to be repaid.
Senators said too often, family members who inherit farms are forced to sell off pieces of their land to pay the estate tax bill.
“I hear this from a number in the industry, that they’re land rich but cash poor,” said Senate Majority Leader Rob Garagiola, D-Montgomery.
Garagiola, who is running for the 6th Congressional District seat in Western Maryland, was joined in promoting the bill by Sen. David R. Brinkley, a Republican who has also thrown his hat into that race.
“The best farm preservation tool we have is anything that makes farming profitable,” said Brinkley, R-Carroll and Frederick.
Gov. Martin O’Malley, a Democrat, has said he will propose a similar measure to defer estate taxes on family farms until they are subdivided or developed.
The bill was not part of the legislative agenda the governor rolled out on Monday, but his administration has said it will be coming soon.