Business Resources

Enterprise Zone

Enterprise Zone Application

A geographically designated area wherein investments in commercial development and redevelopment and job creation are eligible to receive tax credits.

Infrastructure exists to support new, infill and redevelopment of commercial property.

Eligible commercial projects within the Enterprise Zone can be certified to receive a commercial real property tax credit prorated over 10 years.

Eligible businesses operating within the Enterprise Zone can receive income tax credits for the creation of full-time jobs.

The following uses are not eligible: fast-food restaurants, convenience stores, stand-alone gas stations, adult entertainment and gambling facilities.

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About the Enterprise Zone Commercial Real Property Tax Credit

In order for a business to qualify for the property tax credit, it must meet all state and local eligibility requirements. To be qualified the business must satisfy one of the two specific statutory requirements, which are that business must either (1) make and investment in capital improvements, or (2) hire new employees. The business must contact the local enterprise zone administrator regarding the local eligibility requirements because the local eligibility requirements vary by the enterprise zone.

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About the Enterprise Zone Income Tax Credit

General Requirements:

Not every new employee hired by a business located in an enterprise zone is eligible for one of the enterprise zone income tax credits. The following requirements apply to both the general income tax credit and the income tax credit for hiring economically disadvantaged employees:

The employee must have been hired after the business was located in the enterprise zone or focus area, or after the enterprise zone or focus area is designated,

The employee must have been employed for at least 35 hours per week for six months (or 12 months in a Focus Area) before or during the taxable year in which the credit is taken,

The employee must spend at least 50% of all work time in the enterprise zone or on activities of the business resulting from its location in the enterprise zone or focus area,

The employee must have been hired to fill a new position. That is, the firm’s number of full-time positions must increase by the number of credits taken, and

The employee must earn at least 150% of the federal minimum wage.

Requirements for Economically Disadvantaged Employees:

The following requirements apply the income tax credit for hiring economically disadvantaged employees in addition to the general requirements:

To claim the income tax credit for hiring the economically disadvantaged employees, the business must obtained the certification from the Maryland Department of Labor, and

To receive the income tax credit, an economically disadvantaged employee must remain in the position for three years.

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