Maryland Legislators Seek Bigger Tax Breaks for Industrial Sites

Maryland Legislators Seek Bigger Tax Breaks for Industrial SitesMayor Stephanie Rawlings-Blake has recently gone on record saying that she plans to implement “bigger” property tax breaks for the major industrial zones of southeast Baltimore. Rawlings-Blake and her administration wants to create a new “focus area” which must be approved by the state for the targeted tax credits, an area that is already part of the city’s 14,000-acre Enterprise Zone.

Enterprise Zones are designated areas where the state would like to see more investment and economic growth. With 30 such zones registered in the state, businesses within these zones are eligible for special tax credits for a variety of reasons, such as hiring a certain demographic of worker to infrastructure improvement.

In an interview with the Baltimore Sun, Rawlings-Blake expressed the rationale behind the focus on industrial sites, explaining that many industrial sites “continue to remain underdeveloped and underutilized.” It is also worthy of speculation as to how much this move is intended to bring more shipping-related industry to the city, given the Port of Baltimore expansion and the new 1 million square foot Amazon distribution center, slated to open at the end of 2014. The new focus area is also directed at two operations scheduled to close in the same area, the Sun Products plant and Mars distribution center.

Under the current tax credit program, businesses which are located in an enterprise zone are eligible for “a general income tax credit and a larger income tax credit for hiring economically disadvantaged employees.” The program awards tenants, among other things, a tax credit to be phased out over a ten year period, going from 80% in the first five years to 30% in the final year.

Resolution 14-0150R, which contained the proposal, was set to be proposed March 3rd at the City Council meeting, however the meeting was cancelled due to inclement weather. Though the city has until April 15th to submit its formal application to the state, the council is set to take up the measure on its next scheduled meeting.

Read the Baltimore Sun article with the Rawlings-Blake interview here.

To learn more, you can also reach Andrew Bareham, 410-307-6442 or abareham@katzabosch.com.

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