ANNAPOLIS, MD—Governor Larry Hogan on Tuesday afternoon announced the largest tax relief package in state history to deliver more than $4.6 billion in relief for Maryland families, small businesses, and retirees.
“Next to our health recovery from the worst pandemic in more than a century, nothing is more important than our continued economic recovery,” said Governor Hogan. “With all of the important announcements we are making today, we are continuing our focus on delivering exactly what we promised—real, long-term relief to hardworking Marylanders, small business, and retirees, creating more jobs and more opportunity in every corner of the state, and continuing to lead the nation in economic recovery so that our state comes back even stronger and better than ever before.”
Last fall, the governor announced a five-point framework for the record budget surplus, including increasing the Rainy Day Fund, major tax relief for retirees, direct tax relief for Marylanders, additional relief for underserved Marylanders, and enhancements for state employees.
Tax Relief For All Retirees
The Retirement Tax Reduction Act will eliminate 100% of state retirement taxes in Maryland, providing $4 billion in cumulative relief to deserving retirees. Tax relief is phased in over time using an income exclusion, and begins in tax year 2022. In past years, the governor has been successful in enacting retirement tax relief for law enforcement and first responders, as well as military veterans, but to date the legislature has failed to act on broad-based relief for retirees.
Permanent Tax Relief For Working Families
The Working Marylanders Tax Relief Act will make permanent the enhanced earned income tax credit (EITC) in the RELIEF Act of 2021. The RELIEF Act increased the refundable EITC to 100% for workers without a qualifying child and 45% for other workers, but this relief is currently temporary. This bill would provide working families with another $650 million in cumulative tax relief.
Small Business Fee Relief
The governor will also propose legislation to eliminate the filing fees for businesses that submit their annual report online with the Maryland State Department of Assessments and Taxation (SDAT), including the $300 annual filing fee for companies, LLCs, and other legal entities, and $100 for family farms. This would make Maryland the first state in the country to provide a zero-fee option for all businesses for this type of filing.
Expansion of Manufacturing Incentives
The More Jobs for Marylanders Act 3.0 extends the successful More Jobs for Marylanders program an additional five years, through 2027. The More Jobs for Marylanders program provides tax incentives to new and existing manufacturers that locate or expand in Maryland and create new manufacturing jobs and to non-manufacturers that locate or expand in Maryland Opportunity Zones.
Long-Term Economic Development
The Project Restore Act will codify and make permanent one of the state’s successful COVID-19 economic recovery initiatives, which provides financial assistance for small businesses and commercial developers to revitalize vacant retail and commercial space. The governor recently announced the first round of Project Restore awards to businesses in 23 of the state’s 24 jurisdictions.
Video from Tuesday’s press conference can be viewed below.
