Recognizing how disrupted all residents’ lives have been due to the coronavirus outbreak, Peter Franchot, the Maryland state comptroller, has already extended the state’s personal income tax filing deadline to July and paused the state’s collection of many current tax bills.
However, he said he knows the impact of the state’s mandatory shut down of many small businesses will be long-running, and he wants to help business owners who don’t have a financial cushion.
Franchot said the state can’t wait to begin looking at how to reconstruct the local economy and keep businesses from going bankrupt.
“We’re asking them to shut down,” he said. “But they don’t have the resources to pay their fixed costs. So the concept is no small business in Maryland should close its doors permanently.”
Once the public health emergency ends, many small businesses will need time to get back on their feet before bills are due.
As a result, he’s suggesting the state will take steps to encourage landlords, utilities and insurance companies hold off on collecting payments after the shut down ends.
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How can it happen?
“Big banks, insurance companies, landlords, utility companies. We simply go on a payment holiday for 30 or 60 days,” he said. “We’re going to have to do some kind of reconstruction of the region’s economy.”
Franchot is also urging business owners to conserve the cash they have in order to move forward with business once they are allowed to reopen. “Do not contemplate bureaucracy and permanently closing your doors, even if you’ve laid off your employees. Do not pay your fixed expenses without
communicating,” he said, pointing out that the move could be the difference between opening or closing for good.
“We let the public health emergency end, and then we let the businesses open up, but they will have not spent every available piece of cash that they have in paying their fixed expenses,” Franchot said.
Maryland is able to extend deadlines for taxes, due to “good cause,” and when Maryland Gov. Larry Hogan declared a state of emergency, that measure was met. It is not clear, however, what the state’s comptroller can do to encourage some of the larger businesses to extend their deadlines.