Data Center Maryland Sales and Use Tax Exemption Incentive Program

Data centers that locate or expand in Maryland and create new full-time positions may receive an exemption from Maryland sales and use tax on the purchase of qualified data center personal property.

BENEFITS

A business is eligible for a 10-year consecutive benefit period, subject to an annual renewal.  Within the first three years after submitting an application, the business must create at least five qualified positions and make a minimum investment of: 

• At least $2 million in qualified data center personal property for a business located within a Tier 1 Area, and
• At least $5 million in qualified data center personal property for a business located in any other area of the State.

The benefit period expands to 20 years, subject to annual renewal, if the business invests at least $250 million in qualified data center personal property within the first ten years after submitting an application.

Note: Tier 1 Areas include: Baltimore City, Allegany, Caroline, Dorchester, Garrett, Kent, Somerset, Washington, Wicomico and Worcester Counties. Tier 1 Areas also include Opportunity Zones located in any Maryland county.  

ELIGIBILITY

• Certification – A business must be certified as a "Qualified Data Center" by the Maryland Department of Commerce.
  
  
• Investment Minimum – The business must invest at least $2 million in qualified data center personal property if the business located in a Tier 1 Area, and invest at least $5 million qualified data center personal property if the business is located in any other area in the State.
  
  
• Job Creation Minimums – The business must create at least five qualified positions. The positions must be full-time, pay 150% of the State minimum wage, be filled for 12 months and be a "net new" job to Maryland. The business must create the minimum number of jobs in a three-year period. 

APPLY 

The business must submit an Eligibility Application to Commerce. Commerce will issue a Certificate of Eligibility and notify the Comptroller's Office who will issue the sales and use tax exemption certificate to the business. 

Application Materials 

• Application
  

RESOURCES

• Chapter 640 (Senate Bill 397)
• Maryland Energy Administration (MEA) Data Center Energy Efficiency Grant Program
  
• Comptroller Sales & Use Tax Tip #28 
  

CONTACT

For more information, please contact:

FREQUENTLY ASKED QUESTIONS

• What is the Data Center Maryland Sales and Use Tax Exemption Eligibility Incentive Program? 
  This program incentivizes data center investment and job creation by exempting sales and use tax on the purchase data center personal property.
  
  
• Who qualifies for the tax incentive? 
  A data center located in the State in which an individual or a corporation, within 3 years after submitting an application for the sales and use tax exemption, has created at least five qualified positions and invested at least $2 million in qualified data center personal property if the facility is located in a Tier 1 Area or invested at least $5 million in qualified data center personal property if the facility is located in any other county of the State.
  
  
• When will I qualify?  
  The business may submit an Eligibility Application to Commerce before commencing the project.
  
  
• How long does the benefit last? 
  The certificate of eligibility may be renewed each year for no more than 10 consecutive years if the data center invests at least $2 million in a Tier 1 Area facility or at least $5 million in a Tier 2 Area within 3 years after submitting an application for the sales and use tax exemption.  The certificate of eligibility may be renewed each year for no more than 20 consecutive years if the data center invests at least $250 million within ten years after submitting an application for the sales and use tax exemption.
  
  
• What is a qualified position? 
  A qualified position is a position that pays at least 150% of the State minimum wage, is full-time, is newly created, was not moved or transferred from another facility in the State, and is filled for at least 12 months. Only positions that pay 150% of the State minimum wage for that tax year will qualify.  A business has to main, at a minimum, at least five qualified positions for the duration of the 10- or 20-year benefit period in order to remain eligible for the exemption. 
   
• What are Tier 1 Areas? 
  Tier 1 Areas include Baltimore City, Allegany, Caroline, Dorchester, Garrett, Kent, Somerset, Washington, Wicomico, and Worcester Counties. Tier 1 Areas also include Opportunity Zones located in any Maryland county.
  
  
•  If I have multiple projects, can I apply for each one project? 
  Yes, a business can apply for multiple projects. Each project must qualify on its own.