To support Maryland’s small businesses facing continued financial impacts from the novel coronavirus, the state established through bipartisan legislation the new Maryland Small Business COVID-19 RELIEF Grant Program in 2021 with $10 million in state RELIEF Act funding.
The grant offers working capital to assist certain Maryland small businesses with disrupted operations due to COVID-19. Grant assistance is intended to provide interim relief complementing actions with its bank, business interruption insurance, and financial partners.
GENERAL TERMS AND CONDITIONS
PLEASE NOTE: Businesses that primarily sell goods or offer services that require collection of sales & use tax are not eligible for this program.If a business is primarily engaged in activities that do not require the collection of sales & use tax but also engages in the sale of goods or the offering of services that do require the collection of sales and use tax as an incidental or ancillary part of its business activities, the business may still qualify for this program.For example, a hair salon may not have to collect sales and use tax for haircuts or styling, but may also sell shampoo or other products for which that tax is collected. Such a business may still be eligible for this grant.If your business does not qualify for this grant, please note that the bipartisan RELIEF Act of 2021 established a Sales and Use Tax Credit for which your business may be eligible. More information can be found here.
Eligible applicants must be a Maryland based for profit business which primarily engage in non tangible services not subject to the Maryland sales and use tax (see examples below).
- Must have between 1 and 20 employees;
- Must have at least 1 W2 employee and the business must have an active account with the Maryland Department of Labor’s Division of Unemployment Insurance;
- Must demonstrate a 25% or greater reduction in revenue adjusted for COVID-19 costs such as sanitation, PPE in 2020 over 2019;
- Must be established prior to March 9, 2020;
- Must be registered and in good standing with Maryland SDAT;
- Applicants who did not receive a COVID-19 Business Relief Grant or Loan will be prioritized over applicants which received a COVID-19 Business Relief Grant or Loan from the Maryland Department of Commerce;
- The applicant, affiliates, subsidiaries, and parent company of the applicant must have combined revenues less than $5 million in 2020;
- Economically disadvantaged applicants as defined by personal net worth of $750,000 or less, adjusted gross income of $350,000 or less, and $6 million or less in assets will be prioritized;
- Business must have an eligible NAICS code as defined and categorized by North American Industry Classification System;
- Applications will be prioritized by industries most impacted by COVID-19;
- Business must currently be in operation;
- Business must have a physical Maryland location;
- Funds will be distributed to the extent practicable by Commerce, among the counties based on population; and
- Your application will be rejected without further review if the application is incomplete and not signed by a person with authority to bind your business.
EXAMPLES OF NONTAXABLE SERVICES
Maryland law states that a charge for the following services is not part of taxable price and thus, is not subject to sales and use tax. Some examples of businesses that offer nontaxable services may include:
- A personal, professional, or insurance service, that is not a defined taxable service and involves a sale as an inconsequential element for which no separate charge is made
- Custom computer services
- A labor or service for application or installation
- Any service for the operation of equipment used for the production of audio, video, or film recording
The charge for labor to repair or alter existing tangible personal property belonging to
another for the purpose of restoring the property to its original condition or usefulness is
not subject to sales and use tax.
At minimum, a completed application must provide:
- A valid Maryland unemployment insurance number and proof of at least one W2 employee, which may include the owner;
- 2019 Federal Tax Return or 2019 Profit and Loss/Income Statement prepared in house or by a CPA;
- 2020 Federal Tax Return or 2020 Profit and Loss/Income Statement prepared in house or by a CPA;
- Certificate of Good Standing with Maryland State Department of Assessment and Taxation;
- Business NAICS code as defined and categorized by North American Industry Classification System;
- An explanation of how COVID-19 has impacted your business and the purpose of the grant;
- As part of the application, you will be asked to provide a list of specific expense items such as rent, fixed debt payments (p+i), payroll expenses, other taxes and fees, utilities, equipment repairs, supplies, and other cash expenses.