Maryland Real Property Tax Exemptions


Maryland’s tax laws contain a variety of tax exemptions for different types of real property uses.  It’s important to note that just because a property owner is a church, charity or non-profit organization, such status does not automatically qualify the real estate for a property tax exemption.  Additionally, a tax exemption is not the same as a tax credit, which is available to certain property owners under a different section of the Maryland Code.  

View the article by MM&C Litigation Attorney, Michael Campbell, which discusses some of the more common tax exemptions available and the process for obtaining an exemption by clicking the download attachment link below.

Miller, Miller & Canby has been handling assessment appeals of various types of commercial properties in Maryland for more than 30 years.  In 2016, we obtained over $20,000,000 in property assessment reductions for our clients.  Our litigation attorneys regularly represent clients at the assessor level, before the Property Tax Assessment Appeals Board (PTAAB) and in the Maryland Tax Court.  We have successfully appealed the assessments on office buildings, hotels, casinos, retail stores, industrial sites, warehouses, apartment buildings and land at various stages of development.  

Michael Campbell is a partner in the litigation group at Miller, Miller & Canby. In addition to trial and appellate advocacy, his practice focuses on real estate litigation and property tax assessment appeals.  Please feel free to contact Mr. Campbell at 301.762.5212 or send him an email for property tax guidance.  For more information about the firm’s Maryland property tax appeals practice and representative cases, click here.
 





Business Attorney Glenn Anderson Featured on Executive Leaders Radio Program


Glenn Anderson joined Executive Leaders Radio on January 12 and was interviewed by host Herb Cohen, co-founder of the program.

Executive Leaders Radio conducts interviews of prominent CEOs, CFOs, and organizational leaders,  focusing on factors that contribute to success.

The ten to twenty-five minute on-air interviews are essentially informal conversations, where guests are asked about their background, education, influences, mentors and early career experiences. Guests also talk about their business, what they do and who they serve. Additionally, questions probe “interests outside of work, personal turning points and family sacrifices to capture the unique human aspect behind these prominent leaders."

During his interview Glenn spoke at length about the entrepreneurial drive that he possessed at a young age, and how his father influenced this passion. He also spoke about his education, the leadership roles he has held at Miller, Miller & Canby, which include Chief Financial Shareholder and Managing Shareholder, and his belief in the importance of mentoring.

In addition to launching Executive Leaders Radio, Herb Cohen also co-founded the University of Pennsylvania’s Wharton Entrepreneurial Network, Fairleigh Dickinson Entrepreneurial Center, and the Center for the Advancement of Study of Entrepreneurship at Temple University.

Executive Leaders Radio airs on Federal News Radio (WFED 1500 AM and streams at federalnewsradio.com). The program also airs nationally in major markets.

Glenn Anderson
leads the Business & Tax practice and Estates & Trusts practice at Miller, Miller & Canby.  He can be reached 301-762-5212.





Property Owners Have 45 Days to Appeal New Maryland Property Tax Assessments


Last week, the Maryland Department of Assessments and Taxation (SDAT) issued new Assessment Notices to owners of one-third of all commercial and residential properties in Maryland.  Property owners have 45 days from the date of the Assessment Notice to challenge these new assessments.  The “first-level” appeal allows the owner the opportunity to convince the assessor that the assessment is incorrect.  If the assessor refuses to reduce the assessment, the owner may file a further appeal within 30 days to the county Property Tax Assessment Appeals Board (PTAAB).   The Board will consider the evidence and issue a written decision, usually within two weeks.  If the property owner is still dissatisfied, another appeal may be filed to the Maryland Tax Court.

Miller, Miller & Canby has been protesting the assessments of various types of commercial properties and high-value residential properties in Maryland for more than 30 years and has obtained substantial reductions in real property assessments for our clients.  Our litigation attorneys regularly represent clients before the local Assessment Office, PTAAB and the Maryland Tax Court.  We have successfully appealed the assessments on office buildings, retail stores, senior living centers, warehouses, casinos, apartment buildings, cemeteries and property being developed.  Let us help you reduce your Maryland property assessments in 2017.  

Michael Campbell
is a partner in the litigation group at Miller, Miller & Canby. In addition to trial and appellate advocacy, his practice focuses on real estate litigation and property tax assessment appeals.  Please feel free to contact Mr. Campbell at 301.762.5212 or send him an email for property tax guidance or to help reduce your commercial Maryland property tax assessment.  For more information about the firm’s Maryland property tax appeals practice and representative cases, click here.
 





Have you Updated Your Employee Handbook to Comply with the New Ordinance on Sick and Safe Leave?


A new Montgomery County ordinance took effect on October 1, 2016, which now requires Employers in Montgomery County to provide certain paid sick and safe leave, to expand the permitted uses of this sick and safe leave, and to permit certain carryovers of unused leave into the next year.  Do the provisions of your current employee Handbook comply with these new requirements?  Are your policies consistent with the law?  If not, an experienced business law attorney can assist you in these areas.

A summary of the principal provisions of the new requirements are as follows:

  1. Employers must allow employees who regularly work more than eight (8) hours each week to accrue paid time off in order to provide care for themselves or family members in cases of illness, preventative care, or in response to sexual violence or stalking.
  2. Employers in Montgomery County are required to provide each employee earned sick and safe leave for work performed in the County paid at the same rate and with the same benefits that the employee normally earns.  
  3. An employer with less than 5 employees is only required to provide up to 32 hours of paid sick and safe leave and 24 hours of unpaid sick and safe leave in a calendar year.
  4. An employer with 5 or more employees is required to provide up to 56 hours of paid sick and safe leave in a calendar year.  
  5. An employee can carryover up to 56 hours of unused sick and safe leave into the next calendar year.
  6. The definition of activities qualifying for sick and safe leave has been expanded.
  7. Employers must keep records for at least 3 years of: (i) earned sick and safe leave by each employee and (ii) earned sick and safe leave used by each employee.

The business law attorneys at Miller, Miller, and Canby can assist employers with setting up or updating their employee handbook, so that it complies with the County’s ordinance on sick and safe leave. To learn more about MM&C’s business law practice and to contact one of the firm’s business law attorneys click here.





The Prestigious 2017 Maryland Super Lawyers List Includes Four MM&C Attorneys


Miller, Miller & Canby is proud to announce that attorneys James (Jim) L. Thompson, Joel (Jody) Kline and Donna McBride have been selected to the 2017 Maryland Super Lawyers list and attorney Diane Feuerherd has been named to the 2017 Rising Stars list, which recognizes attorneys under the age of 40. No more than five percent of the lawyers in Maryland are selected by Super Lawyers.

Jim Thompson
has been a leader in Miller, Miller & Canby's Litigation Group for more than 35 years, concentrating his practice in eminent domain (with partner Joe Suntum) and in real estate valuation litigation, as well as in property tax assessment appeals and general civil litigation. For more than a decade, Mr. Thompson represented Maryland as the sole member in the Owners’ Counsel of America, a national network of property rights attorneys with demonstrated excellence in this area, focusing upon the representation of landowners in eminent domain litigation. Currently Mr. Suntum is the selected member for the state of Maryland. With Mr. Thompson’s breadth of legal experience, proven results, mature judgment, and tenured leadership within the judicial system and the bar, having served as president of the Maryland State Bar Association, he brings the ideal blend of proven trial experience and legal skill to client representations.

Jody Kline
has led Miller, Miller & Canby’s Land Development department since 1981, focusing his practice in land use, zoning and subdivision law and representing clients in many of Montgomery County’s planning and economic development initiatives. In addition to zoning and subdivision law, he represents clients in matters related to master planning, zoning text amendments, conditional use permits, building permit issuance, and other administrative and real estate matters related to land use and development. His clients include residential and commercial developers, private individuals, religious institutions, private schools, non-profit entities and municipal corporations and agencies.

Donna McBride
, a partner in Miller, Miller & Canby's Litigation practice since 2009, has tried hundreds of lawsuits throughout the state of Maryland and in the District of Columbia, approximately 100 of which were jury trials. She focuses her practice in litigation in the following areas:  business and commercial, employment, estates and trusts, personal injury and insurance, as well as real estate.  In addition to her extensive background as a trial lawyer, Ms. McBride is a co-chair of the Maryland State Bar Association’s Judicial Selections Committee, served on the Character Committee for the Court of Appeals, is a member of the Montgomery Inn of Court and volunteers as a mediator for the District Court. She also serves on the Executive Committee for the Montgomery County Bar Association and on the Standing Committee on Rules of Practice and Procedure for the Court of Appeals of Maryland.

Diane Feuerherd
is an associate in the firm’s Litigation practice, focusing in appellate, employment, commercial and business litigation. Ms. Feuerherd joined the firm in the fall of 2013 after serving for two years as an appellate law clerk to the Honorable Lynne A. Battaglia of the Court of Appeals of Maryland, the State’s highest court.  In her two years since joining the firm, Diane has briefed and successfully argued cases before the Court of Special Appeals and the Court of Appeals, and, most recently represented a commercial developer challenging the validity of Montgomery County’s “Rain Tax.”  She is an active member of the Montgomery County Inns of Court and the Montgomery County Bar Association. She also contributes her time to the Finding Justice Project, a committee of the Women’s Bar Association Foundation, researching and memorializing the history of women lawyers in Maryland.
 
Mr. Thompson has been named a Super Lawyer for each of the past 11 years; Mr. Kline for the past 10 years, and Ms. McBride since 2014. 2017 is the second year Ms. Feuerherd has been selected as a Rising Star. They join other Miller, Miller & Canby attorneys previously named Super Lawyers, including Joe Suntum and Pat McKeever.

Super Lawyers, part of Thomson Reuters, is a research-driven, peer influenced rating service of outstanding lawyers who have attained a high degree of peer recognition and professional achievement. Attorneys are selected from more than 70 practice areas and all firm sizes, assuring a credible and relevant annual list.

The annual selections are made using a patented multiphase process that includes:
•    Peer nominations
•    Independent research by Super Lawyers
•    Evaluations from a highly credentialed panel of attorneys

The objective of Super Lawyers is to create a credible, comprehensive and diverse listing of exceptional attorneys to be used as a resource for both referring attorneys and consumers seeking legal counsel. The Super Lawyers lists are published nationwide in Super Lawyers Magazines and in leading city and regional magazines and newspapers across the country, as well as the Maryland Super Lawyers Digital Magazine. For more information about Super Lawyers, go to SuperLawyers.com.

Click the download button below to view the firm's formal press release.  Click here to view the digital article in The Daily Record.





Jim Thompson’s Successful MD Tax Appeal Case Chosen as one of the “Top 10 Ad Valorem Tax Cases"


The 46th Annual Wichita Program Appraisal for Ad Valorem Taxation of Communications, Energy and Transportation Properties was held on July 24-28, 2016 at Wichita State University.  MM&C litigation attorneys, James (“Jim”) Thompson and Michael Campbell, represented Charles County, and David Lyon represented the State Department of Assessments and Taxation against the taxpayer’s efforts to obtain a dramatic reduction in the value of an electric generating plant in Charles County.  After a lengthy trial, they were successful in the reported case of GenOn Mid-Atlantic, LLC v. State Dept. of Assessments and Taxation, 2015 WL 9875283 (Md. Tax 2015).  This case was selected as one of the top ten significant ad valorem cases in 2015-2016 because of the complexity of the issues and the large dollar amount involved.  The case involved personal property assessments on property owned by a non-regulated coal plant in excess of One Billion Dollars.  Witnesses for the taxpayer stated that the fair market value of the plant would have been severely reduced by a number of factors, among them the contention that coal plants were becoming obsolete as new environmental regulations added increased costs to their operation and the availability of cheap natural gas made them non-competitive.  The Tax Court considered those issues, but also evaluated the long-term economics of the plant and ruled that the “highest and best use” of the property was a continuation of the existing plant, and there was nothing obsolete about the coal technology as of the valuation dates in 2009-2010.  The Court affirmed the assessments.

For a detailed summary of the case, click here.  For more information regarding the Annual Wichita Program Appraisal for Ad Valorem Taxation, click here.

Miller, Miller & Canby has been handling tax assessment appeals for owners of various types of properties in Maryland for more than 30 years, and occasionally represents governmental entities trying to protect their tax base.  In 2014, MM&C’s attorneys obtained millions of dollars in property assessment reductions for its clients.  Our litigation attorneys regularly represent clients at the assessor level, before the Property Tax Assessment Appeals Board (PTAAB), and in the Maryland Tax Court.  We have successfully appealed the assessments on office buildings, hotels, casinos, retail stores, industrial sites, warehouses, apartment buildings and land at various stages of development.  Jim Thompson and Michael Campbell have headed up the firm’s ad valorem tax assessment practice for years.

Also, Jim Thompson and Joe Suntum have an extensive practice in eminent domain and real estate valuation litigation.  Currently, Joe is the Maryland Member in the Owners’ Counsel of America, a national network of property rights attorneys with demonstrated excellence in this area, focusing upon the representation of landowners in eminent domain litigation.  With their breadth of legal experience, proven results and mature judgment, they have been extremely successful.

Please feel free to contact Mr. Thompson, Mr. Campbell or Mr. Suntum, at (301) 762-5212 for any property value litigation issues.  For more information about the firm’s litigation practice and representative cases, click here.





Valuation Discount for Gift & Estate Tax Planning May Be Ending;Take Advantage of Current Tax Law


A popular technique used by some business owners to reduce estate taxes and facilitate business succession planning may soon be closing.  On August 2, 2016, the IRS issued proposed regulations which, if adopted, would substantially reduce the ability of business owners to achieve certain valuation discounts on the transfers of minority interests in family owned businesses for gift and estate tax purposes.  As the proposed regulations must go through a 90-day public comment period, and will not go into effect until 30 days after being finalized, these changes will not likely take effect until early 2017.  That creates an excellent planning opportunity now until the end of the year to take advantage of the existing law before potential changes take effect.

Current Business Valuation Law Benefit for Estate & Gift Tax Planning

Under current law, the value of a fractional share in a business is not as a mere fraction of the value of the whole business, but factors in certain discounts that a neutral third-party buyer would normally require.  For example, a buyer would generally expect a discount to compensate that buyer for lack of control of the business if receiving less than a controlling interest.  In addition, that buyer would also want a discount for the lack of marketability of a fractional interest if there were restrictions on his or her ability to sell that interest.  Depending on the facts and circumstances, these discounts could be as much as fifty (50%) percent of the proportionate part of the business.  For purposes of simplicity, I will use a 50% discount in my example below.

Assume I own a one hundred (100%) percent ownership interest in a business which as a whole is worth $10 million. That interest is worth $10 million.  However, if a majority vote in interest (more than fifty percent (50%)) is needed to approve any action in the business, and that no interest in the business can be transferred without the consent of a majority vote in interest a neutral third-party buyer would expect discounts for anything less than a controlling interest.

 If I gift a twenty-four (24%) percent in the business to each of my three children and retain the remaining twenty-eight percent (28%), none of us will have control of the business and none of us will be able to make any further transfers of interest without consent (one of my three children will need to vote with me on any issue to reach a majority interest). Based on the lack of control and substantial restrictions on transfer, the interest owned by each of my three children is not worth $2.4 million, but rather is worth $1.2 million. Further, the interest that I have retained is not worth $2.8 million, but rather is worth $1.4 million.

I have therefore gifted seventy-two (72%) of the business to my children utilizing only $3.6 million dollars of my gift tax exclusion and the value of the interest retained by me is now worth only $1.4 million dollars.  Instead of having a $10 million taxable estate on my death with a marginal federal tax rate as high as forty (40%) percent and a marginal Maryland estate tax rate as high as sixteen (16%) percent, I would now have a federal estate below the $5 million dollar exemption and may have a Maryland estate below the applicable exemption amount (which is currently $2 million and will be gradually increased to $5 million dollars (indexed for inflation) by 2019).  I have therefore avoided the federal and Maryland estate taxes involved in passing my business down to my children.

Take Advantage of Current Tax Planning Opportunity Before 2017

The IRS proposal, if adopted in its current form, would make it more difficult for owners of family businesses to utilize these types of valuation discounts as part of their business planning/estate planning strategies.  

There is also uncertainty with an upcoming November election.  Democratic presidential candidate, Hillary Clinton, has indicated that if elected she would work towards changing the gift and estate tax laws back to the way they existed in 2009.  At that time, the estate tax exclusion was only $3.5 million per person, the gift tax exclusion was only $1 million per person, and the marginal federal gift/estate tax rate was 45%.  Republican presidential candidate, Donald Trump, has indicated that he does not support these proposals.

In this time of uncertainty, the one thing we can be certain of is that a planning opportunity exists now to take advantage of the existing law before potential changes could take effect in 2017.  Contact Glenn Anderson at 301-762-5212  to take advantage of this tax planning opportunity.

Miller, Miller & Canby has assisted clients with business law, tax planning and estates & trusts for 70 years. Glenn Anderson leads the Business & Tax and Estates & Trusts practice groups at Miller, Miller & Canby.  As both a CPA and a practicing attorney, he has developed a recognized expertise in taxation law.

Please feel free to contact Glenn or any of the business & tax planning attorneys at Miller, Miller & Canby to take advantage of current business succession planning tax law and other tax planning needs.  View more information about Miller, Miller & Canby's Business & Tax practice by clicking here.  View more information about Miller, Miller & Canby's Elder Law and Estates & Trusts practice by clicking here.
 





Michael Campbell, Litigation Attorney, Published in the August 2016 IPT Insider


The Institute for Professionals in Taxation published Michael Campbell's article that analyzes a recent decision by Maryland’s highest appellate court concerning the interpretation of the “date of finality” rule, which was thought by many practitioners to exclude comparable sales after January 1 of the tax cycle. The Court of Appeals interpreted the statute expansively to allow sales after the date of finality in certain circumstances, joining such states as New York, New Jersey, Illinois and Oregon. Mr. Campbell's article is published in the August 2016 issue of The IPT Insider.  Click here to view the issue or click the download attachment link below.

Michael Campbell
leads the Litigation practice of Miller, Miller & Canby. In addition to appellate advocacy, he concentrates his practice in the following areas of litigation:  Business & Commercial, Real Estate, Residential & Commercial Construction, and Maryland Property Tax Appeals. He has particular expertise in property tax litigation and appeals. Please feel free to contact Mr. Campbell at 301.762.5212 or send him an email for commercial property tax guidance in Maryland. For more information about the firm's Maryland Property Tax Appeals practice click here.





Maryland’s Highest Court Affirms “Date of Finality” Rule for Property Tax Assessments


In a recent decision by the Maryland Court of Appeals concerning the interpretation of the “date of finality” rule, which was thought by many practitioners to limit the consideration of comparable sales to a time frame before January 1.  The Court interpreted the statute more expansively to allow sales after the date of finality in certain circumstances, joining such states as New York, New Jersey, Illinois and Oregon.

View the article by MM&C Litigation Attorney, Michael Campbell, which reviews the recent ruling and its effect on property tax appeals in Maryland by clicking the download attachment link below.

Miller, Miller & Canby has been handling assessment appeals of various types of commercial properties in Maryland for more than 30 years.  In 2014, we obtained over $20,000,000 in property assessment reductions for our clients.  Our litigation attorneys regularly represent clients at the assessor level, before the Property Tax Assessment Appeals Board (PTAAB) and in the Maryland Tax Court.  We have successfully appealed the assessments on office buildings, hotels, casinos, retail stores, industrial sites, warehouses, apartment buildings and land at various stages of development.  

Michael Campbell
leads the litigation practice group of Miller, Miller & Canby. In addition to trial and appellate advocacy, his practice focuses on real estate litigation and property tax assessment appeals.  Please feel free to contact Mr. Campbell at 301.762.5212 or send him an email for property tax guidance.  For more information about the firm’s Maryland property tax appeals practice and representative cases, click here.
 





Montgomery County Council Passes Increase on Recordation Tax


The Montgomery County Council passed legislation on May 18th, which will impose additional costs on property owners engaged in transfers or certain financial transactions.   The new law, introduced as Expedited Bill 15-16 and signed into law by the County Executive on May 25th, increases the rate of the Recordation Taxes (or “stamp taxes”) for any transaction which occurs after September 1, 2016.  

What the Increase Means for Homeowners
The current rate(s) imposed by Montgomery County are $3.45 per $500 of consideration payable, or debt secured in the case of financings, on the first $500,000.  For any amount in excess of $500,000, the rate of tax increases to $5.00 per $500.  The law raises these rates by $1.00 to $4.45 on the first $500,000. For amounts over $500,000 the increase is $1.75, to $6.75 per $500.  To soften this blow on the sale of residential owner-occupied property, which in most instances enjoyed an exemption from recordation taxes on the first $50,000 of consideration, the new law increases this exemption amount to $100,000.  As before, this exemption applies only on the sale of owner-occupied property to a buyer intending to use the property as their principal residence. But the law qualifies that the buyer must be an “individual”, which may be interpreted by the Montgomery County Transfer Office to deny the exemption on transactions where the “individual” intending to occupy the property might desire to acquire title through a revocable or special needs trust or other estate planning device.

Implications for Commercial Transactions
For commercial transactions, including refinancing, the implications on costs of transactions become more costly if the financing is one that cannot be structured to take advantage of certain exemptions that may be available. This type of exemption may include the recently limited utility of financing using an Indemnity Deed of Trust loan structure or considerations in loan structuring when contemplating a refinancing.   While both provide some measure of relief, the ability to fully avoid the imposition of recordation taxes has become more restricted and, at least in Montgomery County, the costs of those transactions will soon become more expensive.  Indeed, some members of the County Council  supported revisiting the rate to be imposed on amounts over $1,000,000 to an even higher rate.  It is recommended that consultation with an attorney, along with discussions with your loan officer, regarding these increased impositions (or prospect of potential future increases) be undertaken in order to evaluate options for loan structuring that may help to minimize such costs.  

Robert Gough is a principal of the firm and serves as the firm's Managing Shareholder.  Mr. Gough focuses his practice in the areas of commercial real estate transactions and leasing, commercial and residential closings, and related matters. With more than two decades of legal experience, he represents a variety of developers, institutions and individuals in the acquisition, ownership and disposition of real property.

2016 marks the 70th anniversary Miller, Miller & Canby has represented businesses and property owners. Please feel free to contact Robert Gough or any of the real estate attorneys with Miller, Miller and Canby for a complete range of transactional and advisory services.  For more information on the firm's real estate practice, click here.





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