One of Governor Hogan’s top legislative priorities of 2017, More Jobs for Marylanders is a new program that incentivizes and encourages manufacturers to create jobs in areas of Maryland that need jobs the most.
Created for new and existing manufacturing businesses, the Program provides tax incentives tied to job creation for a 10-year period, encourages additional investment in new equipment through accelerated and bonus depreciation and helps to strengthen Maryland’s workforce.
New manufacturing businesses locating in a Tier 1 county and creating at least five news jobs may be entitled to a 10-year (1) income tax credit based on the number of jobs created; (2) State property tax exemption; (3) sales and use tax refund for specific purchases; and (4) waiver of all State Department of Assessment and Taxation fees. Tier 1 jurisdictions include Baltimore City and Allegany, Dorchester, Somerset, and Worcester Counties. Tier 2 counties that have been promoted for Tier 1 benefits, per the Secretary's approval authority to designate three counties, are Baltimore, Prince George's and Washington Counties.
Additionally, existing manufacturing businesses will qualify for the 10-year income tax credit if they create five jobs in a Tier 1 county or 10 jobs in a Tier 2 County. Maryland’s Tier 2 includes all remaining counties.
Provides tax incentives tied to job creation for a 10-year period
New businesses in Tier 1 jurisdictions receive a refundable State income tax credit (5.75% of the wage per new position); State Property Tax Credit ($0.112 per $100 assessed); refund of Sales and Use Tax; and waiver of SDAT fees for the creation of 5 or more new jobs.
Existing businesses in Tier 1 and Tier 2 jurisdictions receive a refundable State income tax credit of 5.75% of wage per new position, for the creation of 5 new jobs and 10 new jobs, respectively.
Encourages additional investment in new equipment through accelerated and bonus depreciation
Recouples Maryland to Federal Internal Revenue Code Section 179 and 168(k).
Frees up capital more rapidly, for application into facility upgrades, hiring and other growth-related initiatives.
Most effective with small manufacturers that need capital to reinvest in their businesses.
For tax years beginning after 12/31/2018, under IRC Section 179 manufacturers can expense capital expenditures up to $510,000/year, with the expensing option phased out after $2,030,000 for 2019.
Bonus depreciation under IRC Section 168(k) is independent from IRC Section 179. Bonus depreciation allows a business to deduct as a depreciation expense, 30% of the adjusted basis of certain qualified property in the year that the property is placed in service after 2019.
Strengthens Maryland’s Workforce
$1 million for Partnership for Workforce Quality (PWQ), providing matching grants to manufacturers that provide incumbent worker training programs.
$1 million for Workforce Development Scholarships to eligible students enrolled in job training programs at community colleges.
$1,000 income tax credit, per apprentice, for manufacturers that employ eligible apprentices.
Additional measures to encourage high schools to provide increased vocational training programs.
To qualify a business must:
- Be a manufacturer engaged in activities that according to the North American Industrial Classification System, would be included in Sector 31, 32, or 33, except for Refiners.
- Offer ongoing job training or a postsecondary education program (e.g. tuition reimbursement).
- A new manufacturer must notify Commerce of its intent to be designated eligible before it establishes a facility in the state.
- An existing manufacturer must notify Commerce of its intent to be designated eligible for the program incentives before it creates new jobs.
- New or existing manufacturers in Tier 1 counties must create at least 5 new qualified jobs. (A qualified job is a job that is full-time, pays at least 120% of State minimum wage and is filled for 12 months.)
- Existing manufacturers in Tier 2 counties must create at least 10 new qualified jobs.
- Jobs must be created within 12 months of the Notice of Intent.
- Be certified by Commerce as a qualified business entity.
- A manufacturer may submit its
Notice of Intent beginning June 1, 2017. A new manufacturer must provide notice before establishing its facility in Maryland and an existing manufacturer must provide notice before it begins creating new jobs.
- Upon receipt of the Notice of Intent, Commerce will provide the business with an application to enroll its project in the More Jobs for Marylanders Incentive Program.
- Businesses that meet the requirements to enroll their project in the program will be certified by Commerce
as a Qualified Business Entity eligible for the applicable incentives available under the program.
- July 1, 2017 – Tax Credit on Property Tax
- January 1, 2018 – Tax Credits on State Income Tax, Sales & Use Tax
- January 1, 2019 – Accelerated and Bonus Depreciation
- Program will sunset on June 1, 2020. Businesses who have been certified to receive benefits under the program will receive for full ten year duration, subject to appropriation. Commerce will not certify any additional business after June 1, 2020.
For more information, please contact:
Mark A. Vulcan
, Program Manager, Tax Incentives
Maryland Department of Commerce, Office of Finance Programs
401 E. Pratt St, 15th floor
Baltimore, MD 21202
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