This summer, the Maryland Department of Commerce announced the designation of the City of Frederick's first Enterprise Zone. New and existing businesses within a 530-acre area along Route 40 now potentially qualify for substantial new real property and state income tax credits.
Below we breakdown the who/what/when/where/and how of the incentive program so that your business can take advantage of the benefits.
Who can apply?
To be eligible, a business must be established or opening within the designated 530-acre Enterprise Zone. Click here to view a map of the eligible area.
• To claim the property tax credit, at least $25,000 in capital investment in the
enterprise zone must occur
• For the general income tax credit, business must create at least one full-time
position (35+hours a week) where employee is paid at least 150% of the
federal minimum wage and remains in the position for at least 6 months doing
at least 50% of the work time in the enterprise zone
• To claim the income tax credit for hiring economically disadvantaged
employees, business must have certification from the Maryland Department
of Labor, Licensing and Regulation and the employee must remain in the
position for three years.
• For full information, visit the MD Department of Commerce's website
What are the Benefits?
There are two separate tax credits available through the Enterprise Zone program. A business may qualify for one or both of these credits:
Real Property Tax Credit
A 10-year County and City tax-credit based on the increase in real property
tax assessments resulting from commercial capital investment. The credit is
calculated during the first five years as 80 percent of the assessed property
improvement, and then decreases 10 percent annually to 30 percent in the
10th year.
State Income Tax Credit
- A one-time $1,000 state income tax credit for each qualified employee
filling a newly created position.
OR
- A three-year state income tax credit for each qualified new economically
disadvantaged employee, earned at $3,000 in Year One, $2,000 in Year
Two, and $1,000 in Year Three.
When Do I apply?
To capture the property tax credit, capital projects must receive certification PRIOR to the commencement of work. Income tax credits can be claimed within the year of the employee's hire.
Where can i find more Info?
The Maryland Department of Commerce's website offers full program details.
How Do I Apply?
Contact the City of Frederick's Department of Economic Development for the necessary certification forms.
Email: businessinfrederick@cityoffrederick.com
Phone: 301-600-6360