Real estate investment trusts (REITs) are entities that invest in real estate and generate income through property ownership, management, and disposal. In Maryland, REITs are considered corporations for income tax purposes, as specified in Section 10-101 and Section 10-304 of the Tax General Article.
According to Maryland law, a REIT is defined as an incorporated business trust or association that acquires, holds, manages, administers, controls, invests, or disposes of property for the benefit and profit of its shareholders, as outlined in Section 8-101 of the Tax General Article.
Title: Maryland’s Definition of REITs and Their Taxation as Corporations
It is important to note that Maryland’s tax treatment of REITs is likely to mirror that of the federal government, as Maryland computes taxable income based on federal taxable income after special deductions for dividends.
In essence, this means that Real estate investment trusts operating in Maryland are subject to the same tax laws as other corporations, with their taxable income being subject to Maryland’s corporate income tax rates. This treatment of REITs as corporations ensure that they contribute their fair share of taxes to the state’s revenue, while also providing a transparent and predictable tax environment for investors in this asset class.