By Michael Colavito and Leighton Regis
On February 13, 2021, the Maryland legislature approved Governor Larry Hogan’s Recovery for the Economy, Livelihoods, Industries, Entrepreneurs and Families (RELIEF) Act (Senate Bill 496). The $1 billion emergency legislative package includes up to $300 million of direct support for small businesses, including a sales tax credit that allows businesses to keep collected sales taxes rather than remitting to the Comptroller.
The sales tax credit will provide more than 55,000 Maryland small businesses with up to $3,000 per month for four months, a total relief of $12,000 that can be utilized to preserve payroll and keep businesses afloat. In order to qualify businesses must:
- timely file the applicable sales and use tax returns for the applicable months; and
- have total gross sales and use tax remitted on return should not exceed $6,000.
For example, if a business with $100,000 in monthly sales collects $6,000 in Maryland sales tax, it will only be required to remit $3,000. However, if a business has $50,000 in monthly revenue and collects $3,000 in sales taxes, it will keep the total $3,000.
The sales tax credit is claimed from March 2021 through to June 2021 and in lieu of the general vendor credit of up to $500 per month.
If you have questions about Maryland’s enhanced sales tax credit or any other sales tax issues, please contact your Aronson tax advisor or Michael L. Colavito, Jr. at 301.231.6298.