ANNAPOLIS, Md. — Maryland lawmakers recently passed the final budget for FY 2026. The $67 billion budget is aimed at decreasing the state’s $3.3 billion deficit by increasing taxes and fees in Maryland.
April 7 was the last day of the recent legislative session. By implementing multiple changes to income brackets and state taxes, Maryland lawmakers hope to close the deficit gap.
Last week, The BayNet reached out to Gov. Wes Moore’s administration for comment. They responded by highlighting Moore’s goal to reform Maryland’s budget, while avoiding placing the hardship on middle-class residents.
“The governor will continue to work with the state legislature, local leaders and all partners involved to ensure that we pass a budget that will give middle-class families a break, grow our economy, and protect and invest in our people.”
Though sales tax is increasing on many products, other measures have been approved to offer relief for Maryland residents, like a program creating subsidies for young adults seeking health insurance.
New Taxes & Fees in Maryland
The new taxes will have the most significant effect on Maryland consumers. Cannabis and gambling taxes have been raised, while a new tax has been placed on all information technology services.
Here are the most notable tax additions and changes in Maryland’s new budget:
- 6% sales tax on all vending machine goods
- 3% tax on most information technology services
- Vehicle excise tax increase from 6% to 6.5%
- Sports betting tax increase from 15% to 20%
- Cannabis tax increase from 9% to 12%
- $5 tax for every tire purchased
New tax brackets have also been introduced, specifically for high-income Marylanders. This includes a bracket for residents who earn over $500,000 per year, and another for residents who earn $1 million annually. All residents with $250,000 or more in annual income were previously taxed at a single rate of 5.75%.
- Residents earning over $500,000 — now taxed at 6.25%
- Residents earning over $1 million — now taxed at 6.5%
Updates to Maryland’s tax brackets aren’t the only change that will affect high-income residents. Anyone earning over $350,000 annually will now also have to pay a 2% tax on capital gains.
The goal of targeting high-income residents is to close the deficit gap without burdening middle-class families in Maryland. However, tax hikes on common goods, like vending machine products, may make them less affordable for low-income people.
Maryland’s Budget in the Wake of New Tariffs
Though the new budget finally passed on Monday, the debate surrounding it echoed fiercely on all sides. Gov. Wes Moore had his own vision, but the finalized budget didn’t meet all of his goals.
The Trump administration’s downsizing of federal agencies and the recently introduced tariffs have also made it hard for lawmakers to predict far into the future.
Tariffs are already shaking up the market, and while they might help American manufacturing in the long run, they’re also expected to raise prices on everyday products. That’s why lawmakers are keeping tariffs in mind as they decide how to roll out new state taxes.
For example, cannabis sold in dispensaries throughout Maryland is typically grown and processed in-state, so it wouldn’t be subject to a price increase due to tariffs. By identifying products produced in the U.S., like cannabis, lawmakers can make informed decisions on which items should receive tax hikes in 2025.
Taxes will likely be implemented on July 1, when the fiscal year begins for 2026.
To learn more about the FY 2026 budget, visit maryland.gov.
Contact our news desk at news@thebaynet.com
wow, the stuff you think is off limits ——————- + then its not
just how much of a roll is anapolis (Annapolis)on? 878
help!
No surprise. Got another O’Malley in office, sad for the State. If you’re young, move now! I wish I had when I was younger. Deeply regretting it.
I agree. I’m retired now, too late for me. If I were a young person, I’d move to another state. Maryland politicians are grifters.
“The new taxes will have the most significant effect on Maryland consumers.”
Add Trump’s tariffs and it’s best to buy only necessities, and save, especially if we’re headed for a recession/depression.
Oh look more taxes. More taxes for their terrible spending habits. Maybe start cutting funding on bs programs. Instead of taking our money. Useless government.
Lets close this budget gap by making these tens of thousands of vehicles on the roads with Historic tags that are driven as everyday vehicles tag them properly and pay their share!!!
are vending machines going to start taking pennys now? I don’t think so.
the bordering countys have the luxury of going to the next state over for their tires.
is there a conversation between ____________ and ______________ about whether we can afford these taxes?
is right to life in the budget? Is pro choice in the budget? Is pro abortion in the budget? There are 3 states: pro life states (no funding for abortion), pro choice states (funding for abortion + adoption\ pregnancy care) + pro abortion states funding for abortion + adoption\ pregnancy care, but more). A pro choice state provides funding for abortion + adoption\ pregnancy care, but more for adoption\ pregnancy care than the other. A pro abortion states provides more funding for abortion than it does for adoption\ pregnancy car.e . I suppose you could say a prro abortion state also provides funding for abortion, but not pregnancy care + adoption.