It occurred to me this may be part of a MD initiative to exempt military retirement income from state income tax. I found this link
http://www.afsa.org/congress/FSRetir...background.cfm which implies that is the case.
"Currently, the bills only allow military retirees with 20 years of active-duty service to exempt 100 percent of their military retirement income. Language in the legislation provides for a gradual phase-in over a five-year period of this exemption. Therefore, 20 percent of military retirement income would be exempt in 2006, 40 percent in 2007, etc."
I hadn't heard anything about this until you posted the link - thanks! That's one more reason to live in Maryland.