Tax Candi

I live very close to a continental divide--half of the rainwater runs towards the Great Lakes, the other half drains into the Mississippi.  And as I re-read the posts I've collected for the past 3 months, I notice there isn't such even split between the geographic coverage of my states incentive summaries.  So, to remedy my focus on the western part of the country, this week we will be exploring the economic development offerings of the Eastern Seaboard.

First up, the One Maryland Tax Credit.

Eligible businesses may receive up to $5,500,000 in tax credits for expanding in Maryland.  This tax credit comes in two parts: 

The Project Tax Credit -- Companies may receive tax credits totaling $5,000,000, equal to the costs and expenses of eligible expansion projects.  These costs include, among others, land acquisition, bonding costs, insurance, architectural and engineering services and utility installation.  Of course, you're more than welcome to spend more than $5 million, but your potential credits max out at that amount.

The Start-Up Tax Credit -- Companies relocating from outside Maryland can receive up to an additional $500,000 for office start-up costs, such as furnishing and equipping the new location.

To be eligible, businesses must locate or expand in a "Priority Funding Area" and create at least 25 new jobs within 2 years. 

Companies interested in pursuing the credit must submit a Declaration of Intent to Maryland's Department of Business and Economic Development and be certified as a qualifying company.

Now, the actual application of the credit is a bit complicated.  Maryland has specific rules for what income the tax credits may offset in what year.  In a nutshell, the tax credits may be taken for up to 14 years and are initially limited to project income tax liability. Interestingly, companies paying 250% of the national minimum wage may use excess credit against non-project tax liabilities, so it might pay to give your employees a higher salary.  (And that's the definition of a win-win situation.)