WVTC provides an income tax credit for qualified capital expenses related to a Maryland winery or vineyard.
A Maryland Winery/Vineyard may be qualified for an income tax credit equal to 25% of qualified capital expenses. Total credits granted may not exceed $500,000 in a year. If the total amount of credits applied for exceeds $500,000, the credit will be prorated among the certified applicants.
A qualified winery is defined as an establishment licensed by the Comptroller of Maryland as either a Class 3 or Class 4 winery.
A qualified vineyard is defined as agricultural lands located in Maryland consisting of at least one contiguous acre used solely to grow grapes and other plants that will be used in the production of wine by a winery licensed by the Comptroller of Maryland.
Qualified capital expenses must be made in connection with the establishment of new wineries or vineyards, or capital improvements made to existing wineries or vineyards in Maryland.
"Qualified capital expenses" include expenditures made by the taxpayer for the purchase and installation of equipment or agricultural materials for use in the production of agricultural products at a vineyard or in a winery. Qualified capital expenses do not include the cost of construction or installation of buildings or structures. Specifically, qualified capital expenses include:
- Bottling equipment
- Canopy management machines
- Capsuling equipment
- Fermenters or other recognized fermentation devices
- Fertilizer and soil amendments
- Fruit harvesters
- Fruit plants
- Irrigation equipment
- Labeling equipment
- Pruning equipment
- Refrigeration equipment
- Small tools
- Weeding and spraying equipment
- Wine tanks
For a winery or a vineyard to claim a tax credit, an individual or corporation on behalf of the winery or vineyard must apply to and be certified by the Maryland Department of Commerce (Commerce). The winery or vineyard must submit an application to Commerce by September 15th following the tax year in which the costs were incurred. By December 15th of that year, Commerce will certify the approved amount of credit. To claim the credit, the applicant may file an amended Maryland income tax return for the taxable year in which the qualified expenses were incurred and attach a copy of the Commerce certification OR; may file an income tax return for any taxable year after the qualified expenses were incurred and attach a copy of the Commerce certification.
The total Maryland Wineries and Vineyards Tax Credit approved by Commerce may not exceed $500,000 for any calendar year. If the total amount of credits applied for by all businesses exceeds $500,000, the credits will be approved on a pro-rata basis. The excess credit may be carried forward for 15 years.
The application for Tax Year 2020 is available now, and must be submitted electronically by September 15, 2021.
WVTC Application Materials
For more information about WVTC contact:
Cindy Zeng, Tax Specialist
Maryland Department of Commerce, Office of Finance Programs
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