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Md. Residents, Businesses To Get Pandemic Aid, Tax Relief

By Maria Koklanaris · February 17, 2021, 5:40 PM EST

Some Maryland residents could see checks as soon as Friday after the governor signed a $1 billion tax relief and stimulus plan that was his top legislative priority, the Maryland comptroller said.

In a news conference Tuesday, Comptroller Peter Franchot, a Democrat who is running for governor, said some residents would begin receiving checks that are part of S.B. 496, the RELIEF Act, signed Monday by Gov. Larry Hogan, a Republican. The RELIEF Act is meant to complement federal stimulus to help residents and businesses suffering financial setbacks as a result of the coronavirus pandemic.

However, Franchot said the state should have done more, saying the plan "falls far, far short of the goal of genuine relief."

At his bill signing Monday, the governor, who is serving his second term and cannot run again for his position, sounded a different note.

"The RELIEF Act offers a real lifeline to those hardest-hit people who are struggling to get by and small businesses desperately trying to stay afloat," Hogan said, noting that his administration had introduced the plan as emergency legislation. "I said that there wasn't anything that could possibly be more important for the legislature to pass."

Hogan celebrated the RELIEF Act as a bipartisan victory after his agenda suffered a few setbacks the previous week. On Feb. 12, the Maryland General Assembly voted to override a group of bills he had vetoed last year. Among them was H.B. 732, which is set to create the nation's first tax on digital advertising. The General Assembly, controlled by Democrats, also voted to override Hogan's veto of H.B. 932, which will expand Maryland's sales tax to digital downloads.

The tax on large online companies that sell digital advertising to be placed on their platforms is so far unique and is almost certain to be challenged in court before it takes effect. As for H.B. 932, expanding the sales tax to digital downloads is an increasingly commonplace measure that has been adopted by 28 other states and will almost certainly take effect 30 days after passage, as provided for in Maryland's Constitution.

The RELIEF Act extends an emergency order Hogan issued in December to allow the calculation of a small business's unemployment tax rate for 2021 to be based on fiscal years 2017, 2018 and 2019, excluding fiscal year 2020. Between his emergency order and the RELIEF Act, small businesses get $326 million in benefits, according to Hogan.

The act also provides sales tax credits for businesses of as much as $12,000 over four months. Hogan said helps 55,000 small businesses with a total benefit of $300 million. The act also bars any tax increases on income received via state loans or grants.

The RELIEF Act gives low-income Marylanders an additional stimulus in addition to the $600 provided for in the federal Consolidated Appropriations Act, which was enacted in late 2020. The stimulus money is available to families and individuals filing for the state earned income tax credit.

The state stimulus comes in two waves. In the first, families who claimed the credit in tax year 2019 get $500, and individuals get $300. In the second, families who will be eligible for the credit in 2020 get an additional $250 and individuals an additional $150.

--Additional reporting by Daniel Tay. Editing by Robert Rudinger.

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