Enterprise Zone

Enterprise zones, while designated by the state, involve both state and local incentives. They are areas in which state and local governments offer tax credits and assistance to encourage the expansion of existing businesses and attraction of new business activity and jobs.

Non-Focus Area
In a standard Enterprise Zone-that is, one that is not a “Focus Area” (see below)-the tax credits offered for income and property taxes are as follows.

State Income Tax Credit
  • Disadvantaged Employee: a credit of $6,000 per employee total, spread over 3 years:
    1. $3,000 (Year 1)
    2. $2,000 (Year 2)
    3. $1,000 (Year 3)
  • Non-Disadvantaged Employee: a 1-time $1,000 per employee credit
Local Property Tax Credit
A 10-year credit on a portion of real property expansion, renovation or capital improvement. The amount of the credit is 80% of the “eligible assessment” in each of the 1st 5 years, and then decreases by 10% annually for the 2nd 5 years:
  1. 70%
  2. 60%
  3. 50%
  4. 40%
  5. 30%
For more details about the program, see the Maryland Department of Business and Economic Development or contact the Economic Development Corporation at 301-583-4650 and ask to speak with a Business Development Specialist.

Focus Area
In an Enterprise Zone Focus Area, the tax credits offered for income and property taxes are as follows.

State Income Tax Credit
  • Disadvantaged Employee = a credit of $9,000/employee total, spread over 3 years:
    1. $4,500 (Year 1)
    2. $3,000 (Year 2)
    3. $1,500 (Year 3)
  • Non-Disadvantaged Employee = a 1-time $1,500 credit
Local Property Tax Credit
  • A 10-year credit against local real property taxes on a portion of real property expansion, renovation or capital improvement. The amount of the credit is 80% of the eligible assessment in each year of the entire 10-year period.
  • A 10-year tax credit against local personal property taxes on new investments in personal property. The amount of the credit is 80% of the “eligible assessments” in each of the entire 10-year period.
More Information
For more details about the program, including definitions of terms like “disadvantaged employee,” see the Maryland Department of Business and Economic Development or contact the Economic Development Corporation at 301-583-4650 and ask to speak with a Business Development Specialist.