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Maryland: Tax Break for Disaster Responders


 Lend a hand: Baltimore neighborhood after Hurricane Isabel. 2003.

When disaster strikes, people from all over the country offer their help. This altruistic tendency is one of the most beautiful aspects of human nature. We've seen it again and again. Some people risk their lives to help others, some simply open their homes and offer shelter and food. Every gesture is appreciated. Every bit of assistance helps.

Last week, Maryland added a new law to the books that should encourage aid during disasters. House Bill 1513, which takes effect June 1, 2013, exempts from numerous taxes specified out-of-state businesses and employees that are in the state to respond to a state disaster or emergency.

Pursuant to the law, "An out-of-state business that performs disaster- or emergency-related work during a disaster period does not establish a level of presence that would require the out-of-state business or its out-of-state employees to be subject to:

  • State or local licensing or registration requirements;
  • State or county income taxes;
  • Unemployment insurance contributions;
  • Personal property tax; or
  • Any requirement to collect and remit the sales and use tax."

Out-of-state businesses include business entities and employees that:

  • Have no nexus in the state;
  • Have no tax filings in the state prior to the emergency situation;
  • Are affiliated with a registered business in the state through common ownership; and
  • Do not work in the state "except during a declared state disaster or emergency."

"'Disaster- or emergency-related work' means repairing, renovating, installing, building, rendering services, or other business activities that relate to infrastructure that is damaged, impaired, or destroyed by the declared state disaster or emergency."

The disaster period officially starts "10 days before the first day" of a declared state disaster or emergency. It concludes "60 calendar days after the end of the declared state disaster or emergency."

Thanks to this law, businesses and individuals that come to Maryland to lend a hand during a state of emergency or natural disaster can focus on helping. They need not worry about taxes and the like. That's a relief.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.