Sec. 52-54. Imposition and applicability of tax.
Montgomery County, Md., Code § 52-54 (2026)
Sec. 52-54. Imposition and applicability of tax.LinkCopy Citation
(a)
An applicant for a building permit for a residential development must pay a development impact tax for public school improvements in the amount and manner provided in this Article before a building permit is issued for any residential development in the County unless:
(1)
a credit for the entire tax owed is allowed under Section 52-58; or
(2)
an appeal bond is posted under Section 52-48.
(b)
Except as expressly provided in this Article, this tax must be levied, collected, and administered in the same way as the tax imposed under Article IV. All provisions of Article IV apply to this tax unless the application of that Article would be clearly inconsistent with any provision of this Article. This tax is in addition to the tax imposed under Article IV, and any tax paid under this Article must not be credited against any tax due under Article IV.
(c)
The following public school impact tax districts are established, as identified in the County Growth Policy:
(1)
Infill Impact Areas; and
(2)
Turnover Impact Areas.
(d)
The tax under this Article must not be imposed on:
(1)
any Moderately Priced Dwelling Unit built under Chapter 25A or any similar program enacted by either Gaithersburg or Rockville;
(2)
any other dwelling unit built under a government regulation or binding agreement that limits for at least 15 years the price or rent charged for the unit in order to make the unit affordable to households earning equal to or less than 60% of the area median income, adjusted for family size;
(3)
any Personal Living Quarters unit built under Section 59-3.3.2.D, which meets the price or rent eligibility standards for a moderately priced dwelling unit under Chapter 25A;
(4)
any dwelling unit in an Opportunity Housing Project built under Sections 56-28 through 56-32, which meets the price or rent eligibility standards for a moderately priced dwelling unit under Chapter 25A;
(5)
any development located in an enterprise zone designated by the State;
(6)
except for a development located in the City of Rockville, any development located in a Qualified Opportunity Zone certified by the United States Treasury Department or in an area previously designated as an Opportunity Zone, including a development located in the following census tracts as defined by their 2010 Census Boundaries: Silver Spring – 25.00, 26.01; Takoma Park – 17.03, 20.00, 23.01; White Oak – 15.05, 15.09, 14.21; Wheaton – 38.00; Rockville – 9.04; Gaithersburg – 7.24, 7.23, 7.13, 8.13; and Germantown – 8.30; or
(7)
a house built by high school students under a program operated by the Montgomery County Board of Education.
(e)
The tax under this Article does not apply to:
(1)
any reconstruction or alteration of an existing building or part of a building that does not increase the number of dwelling units of the building;
(2)
any ancillary building in a residential development that:
(A)
does not increase the number of dwelling units in that development; and
(B)
is used only by residents of that development and their guests, and is not open to the public; and
(3)
any building that replaces an existing building on the same site or in the same project (as approved by the Planning Board or the equivalent body in Rockville or Gaithersburg) to the extent of the number of dwelling units of the previous building, if:
(A)
an application for a building permit is filed within four years after demolition or destruction of the previous building was substantially completed;
(B)
the Director of the Department of Permitting Services or the Director’s designee finds that the applicant was unable to apply for a building permit or commence construction within four years after demolition or destruction of the previous building was substantially completed due to circumstances beyond the control of the applicant or the applicant’s agents; or
(C)
the previous building is demolished or destroyed, after the replacement building is built, by a date specified in a phasing plan approved by the Planning Board or equivalent body.
However, if in any case the tax that would be due on the new, reconstructed, or altered building is greater than the tax that would have been due on the previous building if it were taxed at the same time, the applicant must pay the difference between those amounts.
(f)
If the type of proposed development cannot be categorized under the residential definitions in Section 52-39 and 52-52, the Department must use the rate assigned to the type of residential development which generates the most similar school enrollment characteristics.
(g)
A Clergy House must pay the impact tax rate that applies to a place of worship under Section 52-41(d) if the house:
(1)
is on the same lot or parcel, adjacent to, or confronting the property on which the place of worship is located; and
(2)
is incidental and subordinate to the principal building used by the religious organization as its place of worship.
The place of worship tax rate does not apply to any portion of a Clergy House that is nonresidential development.
(a)
must not require the payment of a transportation mitigation payment or a school facilities payment for the same development; and
(b)
must refund the payment or give the property owner a credit against the development impact tax for transportation due for the development in the amount of any transportation mitigation payment made for the same development prior to March 1, 2017.
(a)
Except as provided in paragraph (b) or (c), County Code Section 52-41(g)(5), formerly 52-49(g)(5), and Section 52-54(c)(5), formerly 52-89(c)(5), both inserted by Section 1 of this Act, do not apply to any development which received preliminary subdivision plan approval or site plan approval (or a similar approval in a municipality) before October 22, 2015.
(b)
If a development approved before October 22, 2015 is amended any time thereafter to include additional dwelling units and at least 25% of the additional dwelling units are exempt under paragraph (1), (2), (3), or (4) of Section 52-54(c), or any combination of them, then Section 52-41(g)(5) and Section 52-54(c)(5), apply to the additional units.
(c)
If the relevant preliminary subdivision plan was approved before January 1, 2008, Sections 52-41(g)(5) and 52-54(c) apply to building permit applications for the unbuilt portion of the development.
of Permitting Services must report to the Council the use of any impact tax exemption under Section 52-49(c)(5) and Section 52-89(c)(5) within 30 days from the date the exemption is granted.
(a)
This Act takes effect on March 1, 2004, and the development impact tax for public school improvements imposed under Section 52-89 (now Section 52-54, 2016 L.M.C., ch. 7, § 1), added by Section 1 of this Act, applies to any building for which an application for a building permit is filed on or after that date.
(b)
The development impact tax for public school improvements does not apply to any residential building located in a Metro Station Policy Area or Town Center Policy Area if:
(1)
a site plan which includes that building was approved by vote of the County Planning Board, or the equivalent body in any municipality, before May 1, 2003; and
(2)
(A)
a building permit is issued for that building before September 1, 2006; or
(B)
if the building is part of a mixed use project, a building permit is issued for any building or structure in that project before March 1, 2005.