HB 590/SB 657 was signed into law by by Governor Martin O'Malley and went into effect on May 20th, 2010 in Maryland. This bill clearly states that recordation and transfer taxes may not be imposed on the forgiven debt in short sale transactions. Three counties--Anne Arundel, Prince George’s and Montgomery--began levying recordation taxes on the forgiven debt in short sale transactions at the end of 2009
Maryland Attorney General Doug Gansler released an opinion at MAR’s Legislative Day confirming that recordation taxes & transfer taxes cannot be levied on the forgiven debt.
