A tax on investments that raises more than $1 billion will be paid to the state’s coffers in a deal reached Monday, bringing the state more than half a billion dollars in revenue over the next decade.
The plan would raise $500 million from a 5.3 percent payroll tax on businesses that are publicly traded and invest in real estate.
The state is proposing a 2.3-percent flat rate for businesses that pay dividends or distribute profits to employees.
The tax would be applied on investment income, including capital gains and dividends.
The plan would also raise the top income tax rate from the current 11.4 percent to 15 percent.
The governor signed the plan into law Monday after signing a bill that raised the top personal income tax to 5.8 percent from 5.4.
Larry Hogan said in a statement that the tax, if approved, would bring in $400 million in the first year and $1 million in each of the next three years.
He said it would help build more than 10,000 jobs over the coming years.
The governor’s office said the tax will be fully paid by businesses and individuals and will generate $400 in annual revenue for Maryland, plus an additional $400 a year from the sales tax.
The measure also allows businesses to deduct any payroll taxes they collect, though they must pay those taxes at least once a year.