One of Governor Hogan's top legislative priorities of 2017, More Jobs for Marylanders, promotes the growth of manufacturing in Maryland by providing tax incentives for manufacturing job creation, encourages manufacturers to invest in new equipment through accelerated and bonus depreciation, and funds job training and apprenticeship programs to help strengthen Maryland's workforce. In 2019, the tax credit program was expanded to non-manufacturers that locate or expand in Opportunity Zones.
More Jobs for Marylanders Tax Credits
Tax credits are available to new and existing manufacturers that locate or expand in Maryland and create new manufacturing jobs and to non-manufacturers that locate or expand in Maryland Opportunity Zones.
The benefits are available for a 10 year period.
TIER 1 NEW MANUFACTURING BUSINESS: (a) a refundable credit against the State’s income tax of 5.75% of wages for each qualified positon; (b) a credit against the State’s portion of the property tax; (c) a refund of sales and use tax; and (d) a waiver of fees charged by SDAT.
TIER 1 OR TIER 2 EXISTING MANUFACTURING BUSINESS: A refundable credit against the State’s income tax of 5.75% of wages for each qualified positon.
OPPORTUNITY ZONE NEW NON-MANUFACTURING BUSINESS: (a) a refundable credit against the State’s income tax of 5.75% of wages for each qualified positon; (b) a credit against the State’s portion of the property tax that is the lesser of 100% of state property tax OR $250 per qualified position; (c) a refund of sales and use tax; and (d) a waiver of fees charged by SDAT.
OPPORTUNITY ZONE NON-MANUFACTURING EXISITING BUSINESS: A refundable credit against the State’s income tax of 5.75% of wages for each qualified positon.
Note 1: Tier 1 Areas include: Baltimore City, Allegany, Baltimore, Caroline, Cecil, Dorchester, Garrett, Kent, Prince George’s, Somerset, Washington, Wicomico and Worcester Counties. Tier 1 Areas also include Opportunity Zones located in any Maryland county. Tier 2 Areas are any areas which are not Tier 1 Areas.
Note 2: The total amount of income tax credits is capped for all businesses in a fiscal year. The credits are issued on a first come, first-served basis.
The total amount of sales and use tax credits is capped at $1 million in a fiscal year.
To qualify manufacturing businesses must:
- Be a manufacturer primarily engaged in activities at the facility 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 post-secondary education program (e.g. tuition reimbursement).
- Provide Notice of Intent to enroll in the program.
- New or existing manufacturers in Tier 1 Areas must create at least 5 new Qualified Positions.
- A Qualified Position is a job that is full-time, pays at least 120% of State minimum wage, and is filled for 12 months before they qualify for credits.
- State Minimum wage will be increasing beginning January 1, 2020. Please see the schedule below:
120% State Minimum Wage|
- Existing manufacturers in Tier 2 Areas must create at least 10 new qualified jobs.
- Begin hiring within 12 months of the Notice of Intent to Commerce. Once a business begins hiring, it must add 5 new qualified positions (Tier 1 Areas) or 10 new qualified positions (Tier 2 Areas) within 12 months after the date of its first new hire.
- Existing manufacturers that move their facility from one Maryland County to another after June 1, 2017 will not be eligible to participate.
- Be certified by Commerce as a qualified business entity.
To qualify, non-manufacturing businesses must:
- Be located in an Opportunity Zone
- Provide Notice of Intent to Commerce before hiring.
- Create at least 5 Qualified Positions.
- A Qualified Position is a job that is full-time, pays at least $50,000 per year, and is filled for 12 months before they qualify for credits.
- Offer ongoing job training or provide a post-secondary education program.
- Begin hiring within 12 months of its Notice of Intent to Commerce. Once a business begins hiring, it must add 5 new qualified within 12 months after the date of its first new hire.
- Existing businesses that move their facility from one Maryland County to another after June 1, 2017 will not be eligible to participate.
- Be certified by Commerce as a qualified business entity.
- Non-manufacturing businesses do NOT include businesses that: (i) provide adult entertainment; (ii) are primarily engaged in retail activities (except Grocery Stores); (iii) are primarily engaged in the sale or distribution of alcoholic beverages; or (iv) are one of the following types of entities: a private or commercial golf course or country club, a tanning salon or a bailbondsman.
Businesses can enroll their project in the program and be certified as a Qualified Business Entity until June 1, 2022. Businesses who have been certified to receive benefits under the program will receive for the full ten year duration, subject to appropriation.
If during the 10-year benefit period, the number of new qualified positions falls below the number the business received credit for in the first benefit year, the project will removed from the program and all benefits will be terminated.
If you are a new business, you must provide Commerce with a Notice of Intent before establishing your facility in Maryland. If you are an existing business, you must provide Commerce with a Notice of Intent before you begin creating new jobs.
Commerce will then provide you with an application to enroll your project in the More Jobs for Marylanders Tax Credit Program.
A business that meet the program’s requirements will be certified by Commerce as a Qualified Business Entity eligible for the applicable tax credits available under the program.
A Qualified Business Entity must apply separately for income tax credits and the sales and use tax refund.
Additional Benefits Available to Manufacturers
Accelerated and bonus depreciation encourages additional investment in new equipment. Accelerated and bonus depreciation is available to any Maryland manufacturer and not dependent on facility location, offering job training, creating new jobs, or providing notices of intent to Commerce. Accelerated and bonus depreciation is available beginning January 1, 2019.
Partnership for Workforce Quality, Apprenticeship Tax Credits and other funding for workforce development 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.
Apprenticeship Tax Credit of $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.
For more information, please contact:
, Tax Incentive Specialist, Tax Incentives
Maryland Department of Commerce, Office of Finance Programs
401 E. Pratt St, 17th floor
Baltimore, MD 21202
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