Tax Talk: Comptroller Schaefer Distributes Guide Listing Tax Credits for Businesses

TAX TALK

Volume IX Number 3

Winter 2001

Editor's Note: The following is a press release from the Comptroller's Office.

Comptroller Schaefer Distributes Guide Listing Tax Credits for Businesses

Benefits Available for New Jobs, Research, Training, Commuters, Telecommunications

ANNAPOLIS (November 8, 2000)-Comptroller of Maryland William Donald Schaefer today announced that, for the first time, his office is distributing a new guide explaining business tax credits worth potentially millions of dollars annually for companies providing research and development, clean energy, long term care insurance, work-based training, new jobs, and other services in Maryland.

"This new booklet can be an excellent resource for Maryland’s business community," said Comptroller Schaefer. "It fills the need for a single source of business tax credit information that many business leaders in Maryland have long desired."

The guide offers a brief summary of 17 tax credits, many of which became effective on July 1,2000. Aside from a detailed description, the guide also explains how each credit is calculated and lists appropriate government agencies taxpayers may have to contact to seek any necessary certification.

Taxpayers can download the guide from the comptroller’s Internet Web site at www.marylandtaxes.com 24 hours a day, seven days a week. Requests for a free copy can also be relayed to the Comptroller’s Office e-mail address at taxhelp@comp.state.md.us or by calling 410-260-7300 from Central Maryland or toll-free 1-877-708-8866. The guide is also available at any of the Comptroller’s 20 taxpayer service offices located throughout Maryland. The offices are open Monday through Friday, from 8:00 a.m. until 5:00 p.m.

Comptroller Schaefer noted that Maryland businesses might be eligible for federal and local tax credits in addition to the state tax credits listed in the guide.

"I urge every local business to contact their federal and local government officials to see if their business can qualify for other tax benefits," said Comptroller Schaefer. "We’re going to be sending copies of the business tax credits guide to the chambers of commerce, several business and trade associations and other interested groups."

A list of the 17 business tax credits follows:

· Tax Credit for Businesses that Create New Jobs —Provides a tax credit to businesses located in Maryland that create at least 25 positions and establish or expand operations in Maryland.

· Clean Energy Incentive Tax Credit — Offers a credit to businesses that purchase and install solar water heating property and photovoltaic property or use waste materials to produce electricity that is sold to an unrelated person.

· Commuter Tax Credit - Provides a credit to Maryland-based businesses that pay part of an employee’s commuting costs by transit or van-pools, or provide payments made under a Guaranteed Ride Home and Parking "Cash-Out" programs, starting January 1, 2001.

· Maryland Disability Employment Tax Credit —Provides a tax credit for businesses that hire persons with disabilities for wages paid to the employees and for child care and transportation expenses paid on behalf of the employees. The credit also applies to newly hired U.S. military veterans released from service with service-related disabilities.

· Electric and Gas Utility Tax Credit - Offers an income tax credit for a portion of property taxes paid by an electric or gas public utility on its operating real property in Maryland, other than operating land, that is used to generate electricity or steam for sale, and a credit for wages paid to qualified employees at a multi-jurisdictional electric company’s qualified corporate headquarters.

· Employer-Provided Long-Term Care Insurance Credit — Provides a credit for 5% of the costs, up to the lesser of $5,000 or $100 per employee, for employers who provide long-term care insurance as part of an employee benefit package.

· Employment Opportunity Tax Credit — Offers a credit to businesses that hire an individual who received Aid to Families with Dependent Children (AFDC) or Family Investment Program (FIP) entitlements, of up to $1,800 for wages paid to the employee during the first year, as well as $600 in child care or transportation expenses paid on behalf of the employee.

· Enterprise Zone Tax Credit — Offers a credit to businesses located in a certified enterprise zone in Maryland for wages ranging from $1,500 to $3,000 paid to newly-hired employees who meet certain qualifications.

· Heritage Preservation Tax Credit/Mortgage Credit Certificate - Provides a credit for substantial expenditures incurred in a 24-month period to rehabilitate a certified heritage structure located in Maryland or in a state with a reciprocal agreement to allow a tax credit for historic restoration of structures located in Maryland. The credit is available for owner-occupied residential property as well as income-producing property and unused credits may be transferred to new owners.

· Job Creation Tax Credit — Allows businesses that expand or establish a facility in Maryland resulting in the creation of new jobs in the state to claim a credit based on the number of positions created or on the wages paid to the new employees.

· Maryland-Mined Coal Tax Credit — Offers a tax credit of $3 per ton of purchased coal to a co-generator, a public service company, or an electricity supplier that purchases coal mined in Maryland.

· Neighborhood Partnership Program Tax Credit — Provides a credit of up to $125,000 per year to businesses that contribute cash or goods to approved projects operated by organizations who are tax exempt under IRC rules. The credit is in addition to any charitable contribution deduction that is allowed for these contributions on both the state and federal income tax returns.

· One Maryland Economic Development Credit —Offers a credit for setup or expansion costs to businesses that establish or expand a business facility in certain economically distressed Maryland counties or other qualifying areas.

· Research and Development Tax Credit — Allows businesses that incur qualified research and development expenses in Maryland to claim a credit. The total credits for all businesses may not exceed $6 million per year.

· Telecommunications Property Tax Credit - Provides a credit to a public utility that is a telecommunications company for a portion of the total property taxes paid by the company on its operating real property in Maryland, other than operating land, used in telecommunications.

· Water Quality Improvement Credit — Provides a credit of up to 50% of the costs for additional commercial fertilizer necessary to convert agricultural production to a certified management plan, up to $4,500.

· Work-Based Learning Program Credit — Offers a credit to businesses for 15% of the wages — up to $1,500 - paid to a student hired as part of an approved work-based learning program.