Maryland Economic Development Corp. v. Montgomery County, 64 A.3d 478

MEDCO is a Maryland public corporation created to promote economic development and is broadly exempt from taxes on its properties or activities under ED § 10-129(a).
MEDCO financed the Shady Grove Technology Development Center project and later sought to retire bonds by borrowing $3.3 million from PNC, securing the loan with a deed of trust on MEDCO property.
MEDCO recorded a Leasehold Deed of Trust and sought an exemption from the recordation tax under ED § 10-129(a); Montgomery County denied the exemption and assessed $31,450.
Tax refunds and appeals followed: Tax Court denied MEDCO’s appeal; Circuit Court reversed; Court of Special Appeals affirmed the Tax Court’s denial; the case was appealed to the Maryland Court of Appeals.
The Maryland Court of Appeals held that ED § 10-129(a) plain meaning exempts MEDCO from the recordation tax on the deed of trust, reversing the Court of Special Appeals and remanding with instruction to affirm the Circuit Court.
The decision notes MEDCO’s exemption is liberal construction of the MEDCO statute, harmonizing with Tax-Property provisions and not waiving MEDCO’s tax-exempt status.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether ED § 10-129(a) exempts MEDCO from the recordation tax.	MEDCO contends ‘any... tax’ includes the recordation tax.	County argues the exemption does not cover excise taxes like recordation.	Yes; ED § 10-129(a) exempts MEDCO from the recordation tax.
Whether recording a deed of trust is MEDCO’s “activity”	Recording is part of MEDCO’s loan-transaction activity.	Recording the deed is not expressly MEDCO’s activity in the statute.	Recording a deed of trust falls within MEDCO’s activities.
Whether the recordation tax is a “requirement” MEDCO was obligated to pay	MEDCO was required to pay by contractual loan terms.	Tax is not a legal requirement imposed on MEDCO; it is contract-based.	MEDCO was required to pay the tax.
Whether ED § 10-129(a) harmonizes with TP Article	ED § 10-129(a) narrowly limits to MEDCO; TP §§ 12-108/12-116 are general.	Tax-Property provisions apply generally and may be overridden by MEDCO’s specific exemption.	ED § 10-129(a) overrides to create a limited exception; harmonization exists.
Whether MEDCO waived its tax-exempt status by agreeing to pay the tax	MEDCO’s agreement to pay was a waiver of exemption.	No waiver; MEDCO had no choice in the loan terms.	No waiver; agreement to pay under loan conditions does not relinquish exemption.

Wells Fargo Bank, United States v., 485 U.S. 351 (U.S. (1988)) (exemption of government-related financing and tax characterization of taxation types)
Pittman v. Housing Authority of Baltimore City, 180 Md. 457 (Md. 1942) (exemption primarily to annual property taxes; exemptions may not shield excises unless statutory intent indicates)
Federal Land Bank v. Bismarck Lumber Co., 314 U.S. 95 (U.S. (1941)) (unqualified term ‘taxation’ includes taxes like sales tax when intended by statute)
Pittman v. Home Owners’ Loan Corp., 308 U.S. 21 (U.S. (1939)) (mortgage and recordation are indispensable elements in lending operations; state taxes imposed on instrument)
Md. State Fair & Agric. Soc. v. Supervisor of Assessments, 225 Md. 574 (Md. 1961) (liberal construction of tax exemptions to effectuate legislative intent)