(a) Tax credits. The Director of Finance must allow a new jobs tax credit or an enhanced new jobs tax credit against the County property tax imposed on real property owned or leased by a business entity or its affiliate and on personal property owned by that business entity or its affiliate if the business entity qualifies for either credit under this Article.
(b) Definitions. In this Article, the following words have the meanings indicated:
Affiliate, Business Entity, New or Expanded Premises, New Permanent Full-Time Position, and Notification Date have the meanings defined in Section 9-230, Tax- Property Article, Maryland Code, or any successor provision.
Finance Director means the Director of the Department of Finance or the Director’s designee.
New Jobs Tax Credit means the credit granted under this Article to a qualified business entity against the County property tax imposed on the new or expanded premises and the personal property located on those premises.
Enhanced New Jobs Tax Credit means the credit granted under this Article to a qualified business entity against the County property tax imposed on the new or expanded premises that qualify under state law for an enhanced new jobs credit and the personal property located on those premises.
(c) Eligibility for tax credit.
(1) To qualify for a new jobs tax credit under this Article, a business entity must, on or after July 1, 1998:
(A) construct, or expand by at least 5,000 square feet, premises in the County on which it conducts business by buying, building, or leasing new premises; and
(B) employ at least 25 persons in new permanent full-time positions located in the new or expanded premises in the County during a 24-month period when it occupies the new or expanded premises.
(2) To qualify and be certified for an enhanced new jobs tax credit under this Article, a business entity must, on or after December 31, 1998:
(A) notify the Finance Director as required under state law; and
(B) meet all requirements under state law to qualify for an enhanced new jobs tax credit.
(3) A business entity does not qualify for a new jobs tax credit or enhanced tax credit if:
(A) the business entity has moved the operations which are located on new or expanded premises from another county (including Baltimore City) in Maryland;
(B) the business entity or another taxpayer has been given a tax credit or exemption for the new or expanded premises during the same taxable year under any other state or County law;
(C) the new permanent full-time positions are solely or primarily involved in retail sales of goods or services, except when a small number of positions involved in retail sales are incidental to the primary purpose of a building;
(D) the business entity is a type of business entity that the County Council by resolution before the Notification Date has made ineligible for a new jobs tax credit or enhanced new jobs tax credit, or the new permanent full-time positions are a type of position that the Council by resolution before the Notification Date has made ineligible for a new jobs tax credit or enhanced new jobs tax credit, or the new or expanded premises are located in a geographic area that the Council by resolution before the Notification Date has made ineligible for a new jobs tax credit or enhanced new jobs tax credit; or
(E) the location of the new or expanded premises is inconsistent with any applicable land use master plan.
(4) To qualify for a credit against property tax imposed on personal property, a business entity must certify that the personal property is located on premises that qualify for a new jobs tax credit or enhanced new jobs tax credit under this Article.
(d) Amount of tax credit; pass-through to lessees.
(1) The new jobs tax credit that a taxpayer may claim against County property taxes under this Article is the following percentage of the property tax imposed on the assessment of the new or expanded premises:
(A) 52% during the first and second taxable years in which a credit is allowed;
(B) 39% during the third and fourth taxable years in which a credit is allowed; and
(C) 26% during the fifth and sixth taxable years in which a credit is allowed.
After the sixth taxable year, the Finance Director must not allow a new jobs tax credit under this Article.
(2) The enhanced new jobs tax credit that a taxpayer may claim against County property taxes under this Article is 58.5% of the property tax imposed on the increase in assessment of:
(A) the new or expanded premises; and
(B) any substantially renovated real property adjoining or neighboring the new or expanded premises. A renovation is substantial for purposes of this subsection if the renovation results in a complete rehabilitation of at least 50% of each building on the property.
The taxpayer may claim this credit in each of the first 24 taxable years after the Director certifies that the taxpayer is eligible for the credit.
(3) A lessor of real property must reduce the amount of taxes for which an eligible business entity is contractually liable under a lease or rental agreement by the amount of any tax credit allowed under this Article.
(e) Recapture of tax credit.
(1) A business entity which does not satisfy all applicable requirements under this Article to qualify for a tax credit during the three taxable years after any year when a credit was allowed must repay the tax credit to the County after receiving notice from the Finance Director that the credit must be repaid.
(2) Interest must accrue on any repayable tax credit at the rate established for overdue property taxes, beginning 30 days after the notice from the Finance Director.
(3) Any unrepaid tax credit is a lien on real and personal property owned by the business entity in the same manner as unpaid real property taxes under state and County law.
(f) Administration of tax credit.
(1) A business entity must apply for either tax credit on a form furnished by the Finance Director, and must state which tax credit it intends to request and when and how it expects to qualify for the credit.
(2) When a business entity believes it has met all requirements for the tax credit, it may apply for certification on a form furnished by the Director and must provide sufficient information to show that all requirements under this Article and applicable state law have been met.
(3) The Finance Director must:
(A) determine the eligibility of the business entity for the tax credit;
(B) notify the State Department of Assessments and Taxation that a business entity has been approved for the tax credit; and
(C) require submission of reports by the business entity during the three taxable years after any year when the tax credit was earned to verify that the business entity continues to satisfy all applicable requirements under this Article.
(4) A person who submits a false or fraudulent application, or withholds information, to obtain a tax credit under this Article has committed a Class A violation. In addition, the person must repay the County for all amounts credited and all accrued interest and penalties that would apply to those amounts as overdue taxes. A person who violates this subsection is liable for all court costs and expenses of the County in any civil action brought by the County against the violator. The County may collect any repayable tax credit, and otherwise enforce this Article, by any appropriate legal action.
(5) The County Executive may adopt regulations under method (2) to administer this Article. (1998 L.M.C., ch. 9, § 1; 1999 L.M.C., ch. 16, § 1; 2001 L.M.C., ch. 28, §§ 12, 15 and 16; 2016 L.M.C., ch. 7, § 2; 2016 L.M.C., ch. 18, § 1.)
Editor’s note—The effective date of the amendments made to this section by 2001 L.M.C., ch. 28, § 12, is the same effective date as 1999 L.M.C., ch. 16, § 1.