With only a few days until the end of the 2026 legislative session, the Maryland Hospital Association (MHA) is pushing forward Senate Bill 890 that would provide a two-year moratorium and pause collection of $25 million in back taxes that hospitals owe. It would also pause requirements that the hospitals pay taxes going forward.

Although all Maryland hospitals are nonprofit, it has come to light that 16 nonprofit Maryland hospitals created for-profit insurance subsidiaries in the Cayman Islands.

Under Maryland law, the insurance subsidiaries must pay a 3% premium receipt tax on the gross premiums charged for the insurance. These taxes go into the General Fund. Cumulatively, these 16 Maryland nonprofit hospitals are holding more than $3 billion dollars offshore and have failed to pay taxes on these assets. A whistleblower estimates the hospitals owe $20-$25 million in back taxes to the state.

Act now to tell Maryland hospitals they are not above the law.

SB890 prohibits the Maryland Insurance Administration from charging and collecting premium receipts tax and related fees, penalties and interest accrued for failure to pay from Maryland nonprofit hospitals for two years. The bill passed the Senate and was heard Wednesday in the House Ways and Means Committee.

No other state has done this – states where hospitals have off-shore for-profits are actively collecting taxes from these nonprofit hospitals and enforcing payment and penalties when hospitals break state tax laws.

This is unfair to Maryland companies that did the right thing and paid these taxes all along as well as to companies that reached a settlement with MIA and paid their back taxes. Yet Maryland hospitals think the law should not apply to them.

SB890 deprives Maryland of critically needed tax revenue at a time when we fact a structural deficit and many hard choices in the 2027 budget. A $25 million payment would help the state pay for critically needed services.

Your voice is needed – tell hospitals they are not above the law.