Maryland – Disaster or Emergency Related Work Does Not Create Nexus

SALT Report 2445 – The state of Maryland enacted legislation the allows out-of-state businesses to perform disaster or emergency related work in Maryland during a declared disaster period without establishing a presence that would require the business or its employees to be subject to certain tax obligations or licensing and registration requirements.

The Bill specifically states that qualified business would not be subject to the state or local licensing or registration requirements, state or county income taxes, income tax withholding requirements for out-of-state employees, unemployment insurance contributions, personal property taxes, or any requirement to collect and remit sales and use tax to the state.

To qualify for the exclusion, any business that enters the state to conduct emergency or disaster related work would be required to provide the Comptroller with a statement indicating that the business is in the state solely for disaster related purposes. A written statement must be provided for every business affiliate that enters the state and must include all of the following information:

  • The business name
  • The state of domicile
  • The principal address
  • The Federal tax identification number
  • The date of entry into the state, and
  • Contact information

Additionally, a business that is registered in Maryland must also provide this information for any out-of-state business affiliate that enters the state to perform disaster- or emergency-related work.

For purposes of the Bill, a disaster period is defined as a period that begins 10 days before the first day, and ends 60 days after the end, of a declared state disaster or emergency. Disaster or emergency related work includes repairing, renovating, installing, building, rendering services, or other activities related to infrastructure that was damaged, impaired or destroyed by the declared disaster or emergency.

The provisions in this Bill are effective June 1, 2013.

For Further Information

Maryland State Legislature – House Bill 1513, Laws 2013