Three New Maryland Laws Business Owners Should Know About

Maryland business owners have seen the state’s minimum wage increase coming for a few years. The hike (from $9.25 to $10.10 per hour) went into effect July 1, 2018, and was the final phase of a law passed by the General Assembly in 2014. The first raise, from $7.25 to $8, went into effect in 2015, increasing three times after that.

The minimum wage increase was not the only law to take effect on July 1. There are a few other new laws on the books now that business owners will want to keep an eye on.

Corporate income tax: As of July 1, Maryland has officially initiated a phase-in of a single-sales factor apportionment system to calculate corporate income tax.

What it means: In tax years 2017 and earlier, all multistate Maryland corporate taxpayers calculated sales tax with a three-factor formula based on property (how much land the corporation owns in the state), payroll (how many people the corporation employs in the state), and sales (how much the corporation sells in the state). Under the new law, the sales factor will be given more weight with each tax year, leading up to 2022, when the state will start to calculate tax based solely on sales. Proponents of the bill hope that the new tax structure will help attract new businesses, according to the Baltimore Sun. About 20 other states currently use this apportionment structure, the Sun reports.

Small Business Relief Tax Credit: Maryland small businesses that provide paid sick leave to their employees may be eligible to receive tax credits.

What it means: Businesses with 14 or fewer employees are eligible to receive the tax credit, which is meant to offset the costs incurred by an earlier law that required small businesses to provide paid sick leave. The credits can be as much as $500 per qualified employee, and the Department of Commerce may provide up to $5 million annually in credits, according to the Baltimore Business Journal.

Baltimore’s “Tourism Improvement District”: A new law authorizes the mayor and city council of Baltimore to create a “Tourism Improvement District” funded by the city’s hotels.

What it means: The new district is meant to help Visit Baltimore, the city’s tourism organization, increase its budget. The funds would be raised by means of a new fee paid by visitors to Baltimore hotels within the district, and would go directly to help Visit Baltimore promote tourism and meet industry needs, reports Baltimore Business Journal. However, to take effect, at least half of the hotels in the proposed district would need to add their names to a petition. San Francisco, New Orleans, and Seattle are among the cities that currently have special apportionments to fund tourism.

Could one of these new regulations change the way you do business in Maryland, for better or worse? A qualified business law attorney can help you understand the implications of these new laws and find ways to make them work to your advantage. Contact Lusk Law, LLC, for more information.

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