The governor of Maryland called on the state general assembly to swiftly pass its $ 1 billion stimulus and tax package and, in his speech on the state, proposed a retirement tax break for the second year running.
In an address streamed live on Wednesday, Republican Governor Larry Hogan urged lawmakers to pass his pandemic aid proposal, which will be called the RELIEF Act as soon as possible. The proposal, introduced in law as SB 496 and HB 612, would abolish all state and local income taxes on unemployment benefits.
“There is absolutely nothing more important to lawmakers, and Marylanders just can’t afford to wait,” Hogan said, calling the proposal the state’s top legislative priority.
SB 496 was amended in the Senate on Wednesday to provide a Recovery Now fund that finances about 30 agencies including the Juvenile Services Education Program, Maryland State Arts Council, and Maryland Economic Development Assistance Authority and Fund.
Hogan also proposed tax breaks for retirees for the second year in a row, resulting in a tax break of more than $ 1 billion. Hogan said Marylanders are fleeing the state because of its “sky-high” retirement taxes, adding that the current situation has meant that citizens must be able to keep more of their money more than ever.
The RELIEF Act would extend a December emergency order issued by Hogan to allow the calculation of the small business unemployment tax rate for 2021 to be based on fiscal years 2017, 2018, and 2019 excluding fiscal 2020. According to Hogan, between his emergency order and the new one, small businesses would receive $ 326 million in benefits.
The law would also provide sales tax credits for businesses for up to $ 12,000 over a four month period. Hogan said this would help 55,000 small businesses for $ 300 million in total. The governor also proposed prohibiting tax increases on income from government loans or grants.
Hogan’s plan would give low-income Marylanders an additional incentive in addition to the $ 600 provided for under federal law on consolidated funds The stimulus money would be available to families and individuals applying for the state tax credit.
The state stimulus would come in two waves. In the first case, families who applied for the credit in tax year 2019 would receive $ 500 and individuals would receive $ 300. In the second case, families eligible for the credit in 2020 would receive an additional $ 250 and individuals would receive an additional $ 150.
Maryland Democrat Peter Franchot criticized aspects of Hogan’s RELIEF Act in an article posted online on Tuesday. According to Franchot, who is running for governor of Maryland in 2022, the direct stimulus payments would not be enough. Franchot also said the proposal to include sales tax credits of up to $ 12,000 looked impressive, but in reality it wouldn’t bring much relief as the companies’ sales tax bills aren’t that high. He added that about 50% of Maryland’s small businesses would receive $ 500 or less from the governor’s relief package.
Additionally, Hogan’s stimulus payment plan would leave out families who don’t use Social Security numbers for filing, Franchot told Law360.
“These are mostly immigrants who pay millions in taxes, but because the federal government doesn’t allow them to make claims [the earned income tax credit]they would not be included in the governor’s proposal, “Franchot said.
Hogan’s office and party leadership in both legislative houses did not respond to requests for comment.
– Additional reporting by Maria Koklanaris. Arrangement by Vincent Sherry.
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