MD Incentives | Finance, Loans, IRB, Workforce Development

A comprehensive list of Maryland financial aid, loans, grants, abatements, workforce development, exemptions, funds & capital investment opportunities.


https://businessfacilities.com/2015/01/md-incentives-and-workforce-development-guide/
A comprehensive list of Maryland financial aid, loans, grants, abatements, workforce development, exemptions, funds & capital investment opportunities.
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Maryland Incentives and Workforce Development Guide

MD Incentives | Finance, Loans, IRB, Workforce Development

For a list of Maryland economic development agencies that can help with the site selection process, visit our Online Site Seekers’ Guide.

 

FINANCING & GRANTS

ADVANCE Maryland: In partnership with the National Center for Economic Gardening, this is a program for second-stage entrepreneurs that use a “grow from within” strategy targeting existing growth companies and offering them critical strategic information customized to their needs.

Community Development Block Grant Program: Provides funding to commercial and industrial economic development projects. Program funds are dispersed to a local jurisdiction in the form of a conditional grant and are then used for public improvements or loaned to a business.

Economic Development Opportunities Fund (Sunny Day): Supports extraordinary economic development opportunities that create and retain employment as well as create significant capital investments.

Maryland E-Nnovation Initiative Fund (MEIF): Offers a state match to private funds raised in support of endowed chairs at Maryland’s nonprofit institutions of higher education. Under the fund, $8.5 million will be appropriated by the Governor annually from fiscal 2016 through 2021.​

Maryland Economic Adjustment Fund (MEAF): Assists business entities in the state with modernization of manufacturing operations, development of commercial applications for technology, and exploring and entering new markets.

Maryland Economic Development Assistance Authority Fund: There are five financing capabilities offered through the Maryland Economic Development Assistance Authority and Fund (MEDAAF), with assistance being provided to the business community and political jurisdictions. To qualify for assistance from MEDAAF, applicants are restricted to businesses located within a priority funding area and an eligible industry sector. With a few exceptions, assistance cannot exceed 70% of the total project costs.

Maryland Industrial Development Financing Authority (MIDFA): MIDFA encourages private sector investments through the use of insurance, the issuance of tax-exempt and taxable revenue bonds, and linked deposits. Insurance reduces the lender’s credit risk. All MIDFA projects must be in a Priority Funding Area.

Maryland Innovation Initiative (MII): Created as a partnership between the State of Maryland and five Maryland academic research institutions, the program is designed to promote commercialization of research conducted in the partnership universities and leverage each institution’s strengths. Qualifying Universities, faculty from Qualifying Universities, and other entrepreneurs interested in creating a University Start-up are eligible for funding.

Maryland Small Business Development Financing Authority (MSBDFA): Created to promote the viability and expansion of businesses owned by economically and socially disadvantaged entrepreneurs, MSBDFA clients include all small businesses unable to obtain adequate business financing on reasonable terms through normal financing channels. The program includes a guaranty fund, contract financing, a surety bond program, and an equity participation investment component. This State program is managed by Meridian Management Group.

Military Personnel and Veteran-Owned Small Business Loan Program: Provides no interest loans for businesses owned by military reservists, veterans, National Guard personnel and for small businesses that employ or are owned by such persons.

Small, Minority, and Women-Owned Business Account Video Lottery Terminal Fund (VLT): VLT provides for 1.5% of the proceeds from video lottery terminals (slots) to be distributed in targeted areas surrounding five Maryland casinos: Maryland Live in Anne Arundel County, Hollywood Casino Perryville in Cecil County, Rocky Gap in Allegany County, Ocean Downs in Worcester County and Horseshoe Casino in Baltimore City. At least 50% of the VLT allocations will be deployed to small, minority and women-owned businesses located within a 10-mile radius of the three casinos. The other 50% will be available to small, minority and women-owned businesses located throughout Maryland.

State Small Business Credit Initiative: Passed as part of President Obama’s Small Business Jobs Act of 2010, this initiative awarded Maryland with $23 million to strengthen existing financing programs that support lending to small businesses. The State is allocating the funds to programs that leverage private lending to help finance small businesses that are creditworthy, but are not getting the loans they need to expand and create jobs.

 

 

TAX INCENTIVES

Job Creation Tax Credit (JCTC): An income tax credit of 2.5% of aggregate annual wages for all newly created, full-time jobs up to $1,000 per new job. In revitalization areas, the credit increases to 5% of annual wages, up to $1,500 per new job. Credits may not exceed $1 million per credit year. If the credit is more than the tax liability, the unused credit may be carried forward for five years. The Job Creation Tax Credit remains in effect until January 1, 2020, subject to extension by the Maryland General Assembly. 

Eligibility:

  • Declaration of Intent – A business may not claim any employees hired prior to the business notifying the Maryland Department of Commerce (Commerce) of its intent to seek certification for the Job Creation Tax Credit.
  • Certification – A business must be certified as a qualified business entity eligible for the tax credit. To be certified, a business must submit applications to Commerce.
  • Job Creation Minimums – The business must create 60 new, full-time jobs at the facility during a 24-month period. In designated JCTC Priority Funding Areas (JCTC PFAs), the minimum is 25. Outside JCTC PFAs the requirement may be reduced to as few as 30 new jobs if the aggregate annual salary of the new employees exceeds 60 multiplied by the State’s average annual salary.
  • The positions must be filled for 12 months.
  • Qualified positions are full-time and pay at least 150% of federal minimum wage.
  • The facility must be engaged in an eligible activity.
  • The expansion or establishment of a business must be at a single location in the state. A single firm may have more than one eligible location, if each is certified and meets the requirements of the statute.

The application process requires the business to declare its intent to Commerce prior to creating new, qualified jobs.

Cybersecurity Investment Incentive Tax Credit (CIITC): CIITC provides a refundable income tax credit to Qualified Maryland Cybersecurity Companies (QMCCs) that secure investment from investors. QMCCs receive a credit equal to 33% of an eligible investment in the QMCC. A QMCC is limited to $250,000 for each investor, each fiscal year. Beginning with the fiscal year starting July 1, 2016, HB 1168​​ provides that if a QMCC is located in Allegany, Dorchester, Garrett or Somerset Counties, 50% of the investment in the QMCC, is eligible for the tax credit up to $500,000.​

A single QMCC may not receive total credits exceeding 15% of the total program appropriation for each fiscal year. QMCCs are limited to participating in the program for two years. Total credits issued during the fiscal year cannot exceed the budget amount and are, therefore, issued on a first come basis. The credit is refundable if the QMCC has no Maryland income tax liability.

A qualified investor is an individual or any entity that invests at least $25,000 in a QMCC and is required to file an income tax return in any jurisdiction. QMCC is a company that meets following requirements:

  • Has its headquarters and base of operations in Maryland;
  • Is organized for profit and engaged primarily in the development of innovative and proprietary cybersecurity technology;
  • Has fewer than 50 employees;
  • Is in active business no longer than 5 years and once certified as a QMCC a QMCC may remain eligible for a qualified investment for up to 2 years;
  • Has no publicly traded securities on any exchange; and
  • Is certified as a QMCC by the Maryland Department of Commerce (Commerce) ​

Enterprise Zone Tax Credit (EZ): ​​​​​​​​​​​​​​​​​​​​​​​​​​​​The EZ program provides real property and state income tax credits for businesses located in a Maryland enterprise zone in return for job creation and investments. Businesses located in Focus Areas may be also qualified for personal property tax credits on new investment in personal property and enhanced income tax credit for creating new jobs.

One Maryland Tax Credit: Businesses that invest in an economic development project in a “qualified distressed county” and create at least 25 new full-time jobs may qualify for up to $5.5 million in state income tax credits. Project tax credits of up to $5 million are based on qualifying costs incurred in connection with the acquisition, construction, rehabilitation and installation of a project. Start-up tax credits of up to $500,000 are available for the expense of moving a business from outside Maryland and for the costs of furnishing and equipping the new location. The credit can be carried forward 14 years and is refundable, subject to certain limitations.

Research and Development (R&D) Tax Credit: ​​​​​​​Businesses that have qualified R&D expenditures in Maryland may qualify for two state income tax credits, the Basic R&D Tax Credit and the Growth R&D Tax Credit. The tax credit remains in effect until January 1, 2020, subject to extension by the General Assembly.

  • Basic R&D Tax Credit – 3% of eligible R&D expenses that do not exceed the Maryland Base Amount. If the total credits applied for exceed $4.5 million, the business’ Basic tax credit is prorated.
  • Growth R&D Tax Credit – 10% of eligible R&D expenses in excess of the Maryland Base Amount. If the total credits applied for exceed $4.5 million, the business’ Growth R&D tax credit is prorated.

Regional Institution Strategic Enterprise (RISE) Zone Program: A RISE Zone is a geographic area that has nexus (a strong connection) with a qualified institution and is targeted for increased economic and community development. Qualified institutions include institutions of higher education, regional higher education centers or non-profits affiliated with a federal agency.

The purpose of the RISE Zone program is to access institutional assets that have a strong and demonstrated history of commitment to economic development and revitalization in the communities in which they are located. Qualified institutions and local governments develop a targeted strategy to use the institutional assets and financial incentives to attract businesses and create jobs within the zone.

Businesses locating in a RISE Zone or an existing business doing a significant expansion within the Zone, may qualify for real property tax credits and income tax credits related to capital investment and job creation. A business concierge with the Maryland Department of Commerce (Commerce) will be available to assist businesses with identifying and utilizing other State programs for which they might qualify, and with permitting and licensing applications.

A RISE Zone designation will be in effect for 5 years, with a possible additional 5-year renewal. Counties and municipalities are limited to a maximum of three RISE Zones.

Brownfields Revitalization Incentive Program (BRIP): A site that qualifies for this incentive program may qualify for real property tax credits as well. The site must be located in a jurisdiction that participates in the BRIP, and owned by an inculpable person. For five years after cleanup, a site may qualify for a real property tax credit between 50% and 70% of the increased value of the site. (In an Enterprise Zone, the tax credit may last for up to 10 years). This credit, combined with other real property tax credits, may not exceed 100% of the tax on the increased value of the site.

Employer Security Clearance Costs (ESCC) Tax Credit: The ESCC Tax Credit provides income tax credits for expenses related to federal security clearance costs, construction of Sensitive Compartmented Information Facilities (SCIFs) and first-year leasing costs for small businesses doing security-based contract work.

Wineries and Vineyards Tax Credit (WVTC): A Maryland Winery/Vineyard may be qualified for an income tax credit equal to 25% of qualified capital expenses. Total credits granted may not exceed $500,000 in a year. If the total amount of credits applied for exceeds $500,000, the credit will be prorated among the certified applicants.

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