State Income Tax Lien Laws in Maryland

by Jill Stimson J.D. ; Updated July 27, 2017
The Comptroller's Office can revoke professional licenses or suspend business registrations.

In Maryland, the Comptroller's Office is responsible for collecting income tax from residents within the state and nonresidents who earn income in Maryland. The comptroller must follow the state's tax laws when pursuing delinquencies. Before the comptroller can file a tax lien, however, the Comptroller’s Office must first send delinquent taxpayers a Nonpayment of Personal Income Tax Due notice to pay taxes within 30 days or face collection proceedings.

Penalty and Interest

Taxpayers who receive the initial Nonpayment of Personal Income Tax Due notice must pay the delinquent tax amount, interest assessment and penalty fees. Under Maryland law, the comptroller’s notice is presumed to contain correct information, and taxpayers must file a written appeal to contest the delinquent tax amount. Maryland law requires the comptroller to assess an annual 13 percent interest assessment and up to 25 percent in late fee penalties. After 30 days, the comptroller begins legal collection proceedings against the taxpayer if the taxpayer did not request a hearing and file an appeal.

Collection Methods

In addition to filing liens against taxpayer’s personal and real property, the comptroller may levy bank accounts or lien income directly from employers. The comptroller may also send the taxpayer’s delinquent account to outside collection agencies to pursue legal collection efforts on the comptroller’s behalf. The comptroller can also revoke personal licenses or suspend professional licenses for nonpayment.

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Salary Liens

The comptroller or outside collection agencies can lien a taxpayer’s salary up to a certain amount in order to satisfy the delinquent tax liability. In 2002, the Maryland Assembly passed a new tax bill that changed the salary lien amounts. As of 2011, Maryland allows exemptions from the lien liability up to $145 for each week the taxpayer earned income, up to 75 percent of disposable wage income or up to the total medical insurance payment deductions from the employee’s paychecks. Maryland exempts the larger of the three lien limits as the exempted amount. Thus, the limit collection agents may lien is the tax liability amount minus the exemption. A few counties in Maryland provide a different formula for the lien exemption.

Property Lien

The Maryland Comptroller’s Office files a tax lien in the circuit court of the county the taxpayer lives. The office sends a notification to all of the taxpayer’s creditors notifying them of lien priority. Under Maryland law, the lien simply provides notice to other credits of the state’s interest and priority of the lien. After filing the lien, the comptroller can seek payment of the tax debt through levying bank accounts, filing wage liens, seizing equipment or real property and using the federal offset program.

Considerations

Since tax laws can frequently change, you should not use this information as a substitute for legal or tax advice. Seek advice through a certified accountant or tax attorney licensed to practice law in your jurisdiction.

About the Author

Jill Stimson has worked in various property management positions in Maryland and Delaware. Stimson worked for the top three property management companies in the commercial industry and focuses her career on property building logistics and tenant relationships. She holds a Juris Doctor and a Bachelor of Science in psychology.

Photo Credits

  • maryland - USA image by michanolimit from Fotolia.com
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