Enterprise Zone Application

This application will determine whether your business, property, or developer is eligible for Maryland Enterprise Zone tax credits. If determined to be eligible, you will receive a letter from the Enterprise Zone Administrator indicating which tax credit(s) you are eligible to receive

A ten-year credit against local property taxes is available to companies that locate, expand, or substantially improve business properties in the Enterprise Zone. The property tax credit is equal to 80% of the difference between the base value of the property (the assessment in the year prior to new construction, expansion, or substantial improvement) and the newly assessed value of the property after the investment is made. The property tax credit is 80% for five years. During the last five years, the property tax credit declines 10% annually; the credit is 70%, 60%, 50%, 40%, and 30% respectively. This tax credit is administered to the real property owner in their Property Taxes.

Necessary Qualifications:
 Applicant must plan to make a capital investment in its property of $50,000 or more
 Applicant should be mindful of having a base assessment done before commencing work
 Applicant should apply after receiving all required building permits and before or at the beginning of construction.
 Only commercial properties may apply, any portion of the property devoted to residential (including multifamily and single family homes) use may not receive the credit
 In order to receive a property tax credit for the next taxable year (beginning on July 1 when the tax bill is issued), the local Zone Administrator must certify to the Department of Assessments and Taxation the eligibility of a particular business by no later than the end of the preceding calendar year on December 31st.
 The granting of an Enterprise Zone property tax credit is affected by the timing of the completion of capital improvements, the assessment cycle, and how the improvements are assessed. (I.E. the improvement must change the value of the real property)
 The law states that the credit shall be granted to the “owner” of a qualified property. In cases where a lessee make the capital improvements, the lessees should make a contractual provisions with the owner of the qualified property regarding receipt of the property tax credit

This credit is applied to your state income taxes, and its value is based on the number and type of new employees hired by the business. To receive the credit the business must meet the following criteria

Necessary Qualifications:
 Must have hired two or more employees that meet necessary qualifications
 Must have been hired after the date on which the Enterprise Zone was designated or the date on which the business relocated in the Enterprise Zone, whichever is later.
 Must be filling a new position or replacing an employee who was previously certified as economically disadvantaged
 Must have been employed at least 35 hours a week for at least six months  Must be paid at least 150% of the federal minimum wage throughout his or her employment by a business entity before or during the taxable year for which the entity claims a credit
 Must have spent at least half of his or her working hours in the Enterprise Zone or on activities directly resulting from the business location in the zone
 Must be a new employee or an employee rehired after being laid off by the business for more than one year There are two types of income tax credits. If the employee is not economically disadvantaged, you may qualify for a one-time credit of $1,000 per employee. If the employee is economically disadvantaged (as determined by the Maryland Jobs Service), you may take a credit up to $3,000 of the employee’s wages in the first year of employment. The credit is $2,000 in the second year, and $1,000 in the third. Once/if you have been certified, you can claim these credits upon filing a Tax Return.

1. Fill out the attached application and submit to the Business Development Specialist. The application will allow us to determine whether or not your business is eligible to receive Enterprise Zone benefits. You will receive a letter acknowledging the receipt of your application. 2. The Zone Administrator will review and forward to the appropriate State entities for approval 3. If determined eligible, you will receive a letter confirming this determination from the City of Salisbury. Keep this letter as proof of your Enterprise Zone certification. 4. If you are applying for the Real Property Tax Credit, you will automatically see the Tax Credit reflected in your Property Taxes (either at the start of the next Fiscal Year or after the next Assessment Cycle). If you are applying for the State Income Tax Credits, you will have to claim them or have your accountant/bookkeeper claim them when you file your business entity tax returns.

To be eligible for Enterprise Zone property tax credits, the application must be submitted prior to the project completion date and issuance of User/Occupancy Permits. If the developer or company making property improvements is applying on behalf of the property owner, the property owner must concur with the application by co-signing below. The property tax credits are automatically applied to the property tax bill (i.e., directly awarded to the property owner only). If you are not applying for the property tax credit, this section may be left blank.