SB 325
Department of Legislative Services
Maryland General Assembly
2021 Session
FISCAL AND POLICY NOTE
Third Reader
Senate Bill 325 (Chair, Budget and Taxation Committee)(By Request -
Departmental - Assessments and Taxation)
Budget and Taxation Ways and Means
Tax Sales – Redemption – Nondelinquent Taxes
This departmental bill alters the amount that a person must pay to a local tax collector to
redeem a property sold at a tax sale in the State by requiring that only delinquent taxes
accruing after the date of the tax sale be paid, instead of any taxes accruing after the date
of the tax sale. The bill takes effect June 1, 2021.
Fiscal Summary
State Effect: The bill is not expected to materially affect State operations or finances.
Local Effect: Local government administrative expenses may increase relatively
minimally, as discussed below.
Small Business Effect: The State Department of Assessments and Taxation (SDAT) has
determined that this bill has minimal or no impact on small business (attached). The
Department of Legislative Services concurs with this assessment.
Analysis
Current Law: If a property sold at a tax sale is redeemed by the owner or other person
that has an estate or interest in the property, the person redeeming the property is required
to pay the local tax collector:
 the total lien amount paid at the tax sale for the property together with interest;
 any taxes, interest, and penalties paid by any holder of the certificate of sale;
 except for owner-occupied residential property in Baltimore City, any taxes,
interest, and penalties accruing after the date of the tax sale;
 specified expenses or fees for which the plaintiff or the holder of a certificate of sale
is entitled to reimbursement; and
 for vacant and abandoned property sold for less than the amount due, the difference
between the price paid and the unpaid taxes, interest, penalties, and expenses.
Background: SDAT advises that the current requirement that a person redeeming a
property pay any taxes accrued after the tax sale date can result in a large portion of the
taxes added to the redemption amount being nondelinquent taxes. For a homeowner’s
principal residence, half of the fiscal year tax bill is due by September 30, and the
second half is due by December 31. Under current law, after June 30, the redemption
payoff amount immediately includes the entire next fiscal year’s tax bill even though it is
not yet delinquent or not all of it is delinquent during the period from July 1 to December 31.
For more information about the tax sale process, see the Appendix – Tax Sale Process.
Local Revenues: The bill is not expected to materially affect local tax revenues, though
it may delay collection of the nondelinquent taxes no longer included in redemption payoff
amounts. Local government administrative expenses may increase relatively minimally.
Harford County indicates that its costs increase by $2,500 in fiscal 2022 and 2023, and by
$3,500 in fiscal 2024 and future years, for administrative costs of delinquent tax notices
and tax sale notices.
Additional Information
Prior Introductions: None.
Designated Cross File: None.
Information Source(s): Harford, Montgomery, Prince George’s, Talbot, and Wicomico
counties; Judiciary (Administrative Office of the Courts); Maryland Tax Court; State
Department of Assessments and Taxation; Department of Legislative Services
Fiscal Note History: First Reader - January 26, 2021
rh/sdk Third Reader - February 18, 2021
Analysis by: Donavan A. Ham Direct Inquiries to:
(410) 946-5510
(301) 970-5510
SB 325/ Page 2
SB 325/ Page 3
 Appendix – Tax Sale Process
In general, a tax collector must sell, at an auction, not later than two years from the date
the tax is in arrears, all property in the county on which the tax is in arrears. However, this
requirement does not apply in Baltimore City, and statute is silent as to any timeline for
the sale. The time for the tax sale is established by local law. Failure of the collector to sell
the property within the two-year period does not affect the validity or collectability of any
tax or the validity of any sale subsequently made.
The tax collector sets specified terms for the auction and publishes public notice of the
tax sale, including requirements for potential bidders.
When a property is purchased at a tax sale, the purchaser must pay to the tax collector any
delinquent taxes, penalties, sale expenses, and a high-bid premium, if any. The terms for
payment of the purchase price and high-bid premiums, if any, are determined by the
collector.
Generally, the property owner has the right to redeem the property within six months from
the date of the tax sale by paying the total lien amount on the property, delinquent taxes,
penalties, interest, and certain expenses of the purchaser. If the owner redeems the property,
the purchaser is refunded the amounts paid to the collector plus the interest and expenses.
If the owner does not redeem the property, the purchaser has the right to foreclose on the
property after the six-month right of redemption period has passed. Under most
circumstances, if the right to foreclose is not exercised by the purchaser within two years,
the certificate of sale is void, and the purchaser is not entitled to a refund of any monies
paid to the collector.
Chapter 440 of 2020 requires the State Department of Assessments and Taxation (SDAT)
to issue a report each year that includes an analysis and summary of the information
collected through an annual tax sale survey. Each county must provide SDAT all specified
information on the form that SDAT provides. For more information regarding tax sales in
the State – see 2020 Annual Maryland Tax Sale Report.
SB 325/ Page 4
 ANALYSIS OF ECONOMIC IMPACT ON SMALL BUSINESSES
TITLE OF BILL: Tax Sales – Redemption – Nondelinquent Taxes
BILL NUMBER: SB 325
PREPARED BY: Jason Davidson, 410-767-5754, Jason.davidson2@maryland.gov
PART A. ECONOMIC IMPACT RATING
This agency estimates that the proposed bill:
_X__ WILL HAVE MINIMAL OR NO ECONOMIC IMPACT ON MARYLAND
SMALL BUSINESS
OR
WILL HAVE MEANINGFUL ECONOMIC IMPACT ON MARYLAND SMALL
BUSINESSES
PART B. ECONOMIC IMPACT ANALYSIS
The proposed legislation will not have an economic impact.
SB 325/ Page 5


Statutes affected:
Text - First - Tax Sales – Redemption – Nondelinquent Taxes: 14-828 Tax Property, 14-833 Tax Property, 4-843 Tax Property
Text - Third -: 14-828 Tax Property, 14-833 Tax Property, 4-843 Tax Property