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Incentives
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Enterprise Zone
Enterprise Zone Maps Salisbury
(pdf)
Fruitland (pdf)
Application
(pdf) |
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Businesses locating within an
enterprise zone may be eligible for real property and state income tax credits.
Upon application and approval, the zone offers a ten year credit against local
real property taxes on a portion of real property improvements. Credit is 80%
the first five years, and decreases 10% annually to 30 percent in the tenth and
final year.
The zone also offers a one time $1,000 credit per new worker on state income
taxes. |
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Example Calculation:
ABC, Inc. owns land with a
market value of $200,000. The firm elects to construct a 100,000
sq ft plant (at a cost of $30 per sq. ft.) that will house 200
employees. The plant is located within the Salisbury Enterprise
Zone. |
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Property Tax Rates |
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Salisbury |
$ .819 per
$100 |
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Wicomico |
$ .760 per
$100 |
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Total Tax Rate |
$ 1.58 per $100 |
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Property Tax
Credits |
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Current assessed value of
land: |
$200,000 |
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Assessed value with improvements
(100,000 x $30 +
$200,000) |
$3,200,000 |
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Annual Tax:
($3,200,000 / $100) x $1.58
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$50,560 |
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Ten year taxes: ($50,560 x 10)
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$505,600 |
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Assessment differential:
($3,200,000 - $200,000) |
$3,000,000 |
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Tax credits applicable to: |
$3,000,000 |
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Total tax credit (Years 1-5)
($3,000,000 / $100) x $1.58 x 80% x 5 |
$189,600 |
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Total tax credit (Years 6-10)
($3,000,000 / $100) x $1.58 x 50% x 5 |
$118,500 |
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Total Property Tax Credits
($189,600 + $118,500) |
$308,100 |
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State Income Tax
Credits |
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Enterprise Zone income tax
credit:
($1,000 x 200 emp's) |
$200,000 |
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Total Tax Credits |
$508,100 |
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Job
Creation Tax Credits
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Maryland provides a
$1,000 tax credit to businesses that create new jobs to encourage
businesses expanding or relocating to Maryland.
In most cases, the
JCTC is 2.5% of annual wages for all newly created, full-time jobs,
subject to a limit of $1,000 per new job. The credit earned by a
qualified business entity may not exceed $1 million per credit year. The
business must create 60 new, full-time jobs during a 24-month period.
For a business that locates or expands in a Priority Funding Area, the
minimum is 25 jobs. Outside of a Priority Funding Area, the requirement
may be reduced to as few as 30 jobs if the aggregate annual salary for
new employees exceeds
$2.85 million for 2009. All positions must be
filled for 12 months.
If the
credit is more than the tax liability, the unused credit may be carried
forward for 5 years following the credit year. The credit may be
recaptured if the business experiences job losses. |
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Manufacturing Equipment and Machinery |
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Maryland does not impose a
personal property tax on business. Wicomico County, upon application
and approval, exempts manufacturing equipment and machinery from personal
property tax. |
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Sales Tax Exemptions |
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Wicomico
County does not impose a sales tax. Maryland exempts sales tax
from the following items: |
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Sales of capital
manufacturing machinery and equipment, including equipment used for testing
finished products, assembling, processing or refining, in the generation of
electricity, or used to produce or repair production equipment. |
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Sales of tangible personal
property consumed directly in manufacturing, testing of finished products,
assembling, processing or refining, or in the generation of electricity, if
consumed within one year after it is first used in a manufacturing process. |
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Sales of equipment or
materials used or consumed in research and development. |
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Sales of fuels used in
manufacturing, except those used to cool, heat, light the manufacturing
facility. All fuels through a particular meter are exempt if more than half are
used directly in manufacturing. |
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Sales of computer programs
reproduced for sale or incorporated in whole or in part into another computer
program intended for sale. |
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Sales of customized computer
software. |
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Arts and Entertainment District |
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An Arts and Entertainment
District is a geographically designated area in which a high concentration of
arts and entertainment facilities serve as an anchor attraction. The intent of
the District is to stimulate neighborhood revitalization, improve the
attractiveness and safety of areas, stimulate business activity (particularly in
the evenings and on weekends), attract residents and visitors and build the tax
base.
The tax incentives available upon the
designated Arts and Entertainment District include: an income tax
subtraction modification for qualifying residing artists; a property tax
credit; and an exemption from the Admissions and Amusement Tax.
For more information, contact
Deborah Stam, Director of Community
Development, City of Salisbury at 410-334-3031, or visit
www.ci.salisbury.md.us.
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