Financial Assistance and Tax Extensions for Maryland Small Businesses

3 min

Federal, state, and local governments are taking emergency action to assist the business community during this sharp economic downturn, with the state of Maryland on the forefront of these efforts.

In addition to the $2 trillion federal stimulus package announced earlier today, the state of Maryland has implemented its own “Covid-19 Business Response” — a set of emergency loans, grants, and tax extensions aimed to support Maryland businesses during this crisis.

Emergency Loans:

Small businesses with fewer than 50 employees experiencing losses in revenue, illiquidity, or major supply chain or inventory disruptions due to the COVID-19 epidemic can apply for an unsecured, low-interest working capital loan of up to $50,000.

Loan Terms:

  • 48-month term
  • No interest for 12 months
  • 2% interest for the remainder of the loan
  • No payments for the first 12 months, straight amortization for the remainder of the loan

Emergency Grants

Small businesses with 50 or fewer employees and annual revenues of less than $5 million can apply for emergency working capital grants of up to $10,000 to support payroll, rent, or mortgage payments, utility expenses, or other business expenses.

Manufacturing Fund

A $5 million incentive-based program to assist with the production of personal protective equipment (PPE) by Maryland manufacturers for distribution to healthcare providers and institutions on the front line of the medical crisis. The governor plans to announce the details of this program later in the week.

Layoff Prevention

The state’s emergency Layoff Aversion Fund will provide grants of up to $50,000 to eligible businesses with 500 or fewer employees to implement creative measures aimed to mitigate potential layoffs, including funds for:

  • Purchasing remote-access equipment and software
  • Deep cleaning and sanitization services to allow employees to remain at work
  • Job training and professional development
  • Employee income and benefits to support participation in the State Department of Labor’s Unemployment Insurance Work Sharing Program

Tax Filing and Payment Extensions

The Comptroller of Maryland announced the following tax extensions and relief measures for business filers in Maryland:

  • A 90-day extension (from April 15, 2020 to July 15, 2020) for corporate and pass-through entity income tax payments (including March estimated payments). This includes no interest or penalties for late payments for 2019, as long as tax payments are made by July 15, 2020. No state extension filing is required to take advantage of this extension. Fiscal year filers with tax years ending January 1, 2020, through March 31, 2020, are also eligible for the July 15, 2020 extension.
  • The deadlines for certain business-related tax filings due in March, April, and May of 2020 have been extended to June 1, 2020, covering businesses filing sales and use, withholding, admissions and amusement, alcohol, tobacco, and motor fuel taxes, as well as tire recycling fee and Bay restoration fee returns. This extension includes an automatic waiver of interest and penalties for businesses that file and make payments by June 1, 2020.
  • Businesses that have already paid their Maryland Sales & Use Taxes for March 2020 may request a refund of their payment.

Business Licenses and Permits

For the duration of the state of emergency and for 30 days thereafter, all state licenses, permits, registrations, and other authorizations that would have otherwise expired during this time period will receive an automatic extension without further action by the Maryland business.

Federal SBA Designation

Maryland is among the states designated by the SBA to receive disaster assistance loans for small businesses impacted by the COVID-19 crisis.

As our clients across the state of Maryland continue to grapple with the economic effects of the COVID-19 epidemic – the shuttering of non-essential businesses, loss of revenue, creeping illiquidity, and the many difficult decisions that lie ahead – the lawyers at Venable remain dedicated to serving Maryland businesses through this difficult period, offering guidance and support as we collectively navigate these challenges.