Baltimore City Enterprise Zone

A business is eligible for the Enterprise Zone (EZ) tax credit program if it makes a capital investment in its property (constructs, renovates, or expands an existing facility) or hires at least one new employee in the Enterprise Zone. Commercial, Retail, and Industrial projects are eligible. Residential properties are not eligible for any of the Enterprise Zone tax credits. If a property is mixed use, the commercial parcels are eligible.  The Enterprise Zone also has sections called Focus Areas that offer increase benefits to companies.

Is your business located in Baltimore City’s Enterprise Zone or Focus Area?

• Go to Baltimore City Citiview and type in the property address to verify if it’s in the EZ. On the left hand side of the page type in the address where it asks for an address and press 'Go'. Scroll down to “info” and the website should return the incentives that the location is entitled to. 
   

• Download a PDF of the 2012 Enterprise Zone Map by clicking the image below:

If your address is not recognized (no information appears in the box below), most likely the mailing address does not correspond to an address recognized by SDAT (State Department of Assessments and Taxation). Check SDAT’s website to identify a recognizable address.

Tax Credits
The Enterprise Zone and Focus Area tax credits can help businesses reduce their Real Property Tax Bill, Personal Property Tax Bill and Income Tax Bill. Below is a quick overview of the tax credits:

Enterprise Zone Real Property Tax Credit
A ten-year credit against local real property taxes is offered for business improvements or new construction. The credit is based on new property taxes generated as a result of the expansion or new construction. In years 1-5, Baltimore City will waive 80% of the new property taxes generated. In years 6-10 the credit decreases 10% annually (70%, 60%, 50%, 40%, 30%).

Employment Tax Credit Information
The Employment Tax Credit is a 1-3 year tax credit for wages paid to new hires in the EZ. The standard credit is a one-time $1,000 credit per new hire. Each new hire must work at least 35 hours a week and paid at least 150% above the minimum wage. Effective July 2009, the current Federal Minimum Wage is $7.25. Therefore, businesses will have to pay at least $10.88/hr to qualify for employment tax credits. Hired employees are not required to live in the designated Enterprise Zone. 

For economically disadvantaged employees, the credit increases to a total of $6,000 per eligible new hire amortized over three years. Businesses located in a focus area may be eligible for enhanced employment tax credits. Please see the chart below:
 

The following requirements apply to both the general Enterprise Zone employment tax credit and the Enterprise Zone employment tax credit for economically disadvantaged employees:

• The employee must have been hired after the business was located in the zone or after the zone was designated.
• The employee must have been employed for at least 35 hours each week for six months (or 12 months in a focus area) before or during the taxable year in which the credit is taken.
• The employee must spend half of all work time in the zone or in activity related to the zone.
• The employee must have been hired to fill a new position. That is, the firm’s number of full-time positions must increase by the number of credits taken.
• The employee must earn at least 150 percent of the federal minimum wage
• To receive the employment tax credit, please complete the 500 CR Form.

Economically Disadvantaged Employee Tax Credit
In order to claim the larger tax credit for hiring an economically disadvantaged employee (in a newly created position), the firm must obtain a certification of eligibility for each employee it wants to claim. This certification is authorized by the Department of Labor, Licensing and Regulation (DLLR). Once a business is certified in the Baltimore Enterprise Zone, they will be directed to the appropriate contacts in DLLR and instructed on the certification process.

In order to receive the full tax credit, an economically disadvantaged employee must remain in the position for three years. However, if the disadvantaged employee leaves the firm and is replaced by another employee who is also certified as disadvantaged, the firm may take the remainder of the credit as if the original employee had remained.

Focus Area Real Property Tax Benefits
The Baltimore City Enterprise Zone Focus Area represents an area of increased Enterprise Zone benefits for businesses that expand or locate within the boundaries of the Focus area.  To determine if a property is located in the Focus Area, please visit Baltimore City View and input the address or download the map.   

The real property tax credit remains at the 80% level for the full ten years of the certification, the employment tax credit is increased to $1,500 per new employee/$9,000 per disadvantaged employee and unlike Enterprise Zones, Focus Areas include an 80% abatement of the Personal Property Tax for the full ten years of the certification.

Focus Area Personal Property Tax Credit
The credit is a 10-year, 80% credit against local personal property taxes on new investment within a focus area. The credit may be taken against the applicable City or municipal personal property tax liability.

Relocating a Business to Baltimore’s Enterprise Zone
A firm moving from outside Maryland into Baltimore’s Enterprise Zone is considered to be a new Maryland business. All of its employees could be eligible for an Enterprise Zone one-time employee tax credit. If a firm relocates from one site in Maryland into Baltimore’s Enterprise Zone and its base employment remains the same as it was at the previous site, the firm will not be able to claim the Enterprise Zone employee tax credits. However, if the firm’s total employment increases as a result of the move or during the ten-years it is subsequently certified as an Enterprise Zone business, the new positions may be eligible for a one-time Enterprise Zone employment tax credit.

Testimonials
Tell us how the Enterprise Zone employee or property tax credit has helped your business! For general questions or to share a testimonial, send an email to: Elizabeth Goetzinger

EZ Blog and Updates
For the most up-to-date news about the Enterprise Zone and possible changes, visit www.ezbaltimore.com