Hogan introduces $1B COVID-19 stimulus, tax relief package
Hogan said the legislative package will provide immediate targeted tax cuts for working families, small businesses and those who have lost their jobs as a result of the pandemic.
Hogan said the priority in the upcoming legislative session should be "additional, immediate economic relief to hundreds of thousands of struggling families and tens of thousands of small businesses that have been impacted by the pandemic."
"Amid so much suffering, the last thing we should ever do is raise taxes," Hogan said. "So today, I am announcing our top legislative priority, the Recovery for the Economy, Livelihoods, Industries, Entrepreneurs and Families, or the RELIEF Act of 2021, which will provide $1 billion in immediate, targeted financial relief and tax cuts for Maryland's working families, small businesses, and those who have lost their jobs and are suffering financially as a result of the COVID-19 pandemic."
STIMULUS: The governor said the RELIEF Act provides direct stimulus payments for low-to-moderate income Marylanders -- totaling $750 for families and $450 for individuals. This is for Earned Income Tax Credit filers, and relief is broken up into two rounds. The first checks can go out once RELIEF Act is law, Hogan said.
TAX RELIEF: The governor said the RELIEF Act repeals state and local income taxes on unemployment benefits and makes a $300 million commitment to supporting small businesses with sales tax credits of up to $3,000 per month for four months, for a total of up to $12,000. Hogan said this relief will directly help more than 55,000 Maryland small businesses.
Hogan said this relief is automatic and based on a sliding scale up to $3,000. For examples, if you're a business with $100,000 in monthly revenue and you collect $6,000 in sales taxes, you only remit $3,000. If you have $50,000 revenue and you collect $3,000 in sales taxes, you keep it all.
EMERGENCY LEGISLATION: The RELIEF Act will be introduced as emergency legislation, so that it can take immediate effect upon enactment, and checks can begin to go out immediately.
"I cannot imagine anything that would be more important for the Legislature to pass," Hogan said. "Every day that goes by without passing this stimulus and tax relief package means more jobs that will be lost, more families who will lose their homes and more businesses that will go out of business and more people will suffer."
FUNDING:Hogan said the money to fund the RELIEF Act will come from a variety of sources that includes a leftover surplus from fiscal year 2020, budget actions taken earlier in the year by the Board of Public Works, the state's reserve fund is doing better than anticipated, and about $100 million is coming from the Rainy Day Fund to pay for unemployment.
UNEMPLOYMENT TAX RELIEF FOR SMALL BUSINESSES: The RELIEF Act extends unemployment tax relief for small businesses, staving off sudden and substantial tax hikes in 2021. This provision codifies an emergency order the governor issued last month.
Additionally, The National Restaurant Association has created a PPP User Manual to help restaurants and other small businesses navigate this second round of PPP.