Maryland Department of Business and Economic Development Section 5-1102

      (a)      It is the intent of the General Assembly that the job creation tax credits authorized under this subtitle are for the purpose of increasing the number of new jobs in the State by encouraging the expansion of existing private sector enterprises and the establishment or attraction of new private sector enterprises.

      (b)      (1)      (i)      The Secretary shall certify a person as a qualified business entity eligible for the tax credit under this subtitle if the person satisfies the criteria set forth in this section.

                  (ii)      A business entity may not be certified as qualifying for the tax credit under this subtitle unless the business entity notifies the Department of its intent to seek certification before hiring any qualified employees to fill the qualified positions necessary to satisfy the requirements of paragraph (2)(i) of this subsection for establishing or expanding the business facility on which the credit is based.

            (2)      To qualify for the tax credit provided under this subtitle, a business entity must establish or expand a business facility in the State that:

                  (i)      Results in the creation of:

                        1.      At least 60 qualified positions;

                        2.      At least 30 qualified positions if the aggregate payroll for the qualified positions is greater than a threshold amount equal to the product of multiplying 60 times the State's average annual salary, as determined by the Department; or

                        3.      At least 25 qualified positions if the business facility established or expanded by the business entity is located in a State priority funding area; and

                  (ii)      Is primarily engaged in one or more of the following:

                        1.      Manufacturing or mining;

                        2.      Transportation or communications;

                        3.      Agriculture, forestry, or fishing;

                        4.      Research, development, or testing;

                        5.      Biotechnology;

                        6.      Computer programming, data processing, or other computer related services;

                        7.      Central financial, real estate, or insurance services;

                        8.      The operation of central administrative offices or a company headquarters;

                        9.      A public utility;

                        10.      Warehousing;

                        11.      Business services, if the business facility established or expanded by the business entity is located in a State priority funding area; or

                        12.      Operation of entertainment, recreation, cultural, or tourism-related activities in a multiuse facility located within a revitalization area if the facility generates a minimum of 1,000 new full-time equivalent filled positions in a 24-month period and is not primarily used by a professional sports franchise or for gaming.

            (3)      In determining whether a business facility is engaged in a qualifying activity described in paragraph (2)(ii) of this subsection, the Department shall consider the definitions set forth in the Standard Industrial Classification Manual.

      (c)      (1)      A qualified business entity may claim a tax credit in the amount determined under this section.

            (2)      (i)      Except as otherwise provided in this section, the credit earned under this section equals the lesser of:

                        1.      $1,000 multiplied times the number of qualified employees employed by the qualified entity during the credit year; and

                        2.      2.5% of the wages paid by the qualified business entity during the credit year to the qualified employees.

                  (ii)      For qualified employees working in a facility located in a revitalization area, the credit earned under this section equals the lesser of:

                        1.      $1,500 multiplied times the number of qualified employees employed by the qualified entity during the credit year; and

                        2.      5% of the wages paid by the qualified business entity during the credit year to the qualified employees.

            (3)      The credit earned under paragraph (2) of this subsection shall be allowed ratably, with one-half of the credit amount allowed annually for 2 years beginning with the credit year.

            (4)      The credit earned by a qualified business entity under this subtitle may not exceed $1,000,000 for any credit year.

            (5)      The same credit cannot be applied more than once against different taxes by the same taxpayer.

            (6)      (i)      To be certified as a qualified business entity, a business entity shall submit the following to the Department in accordance with regulations adopted by the Department:

                        1.      The effective date of the start-up or expansion;

                        2.      The number of full-time employees prior to the start-up or expansion and the payroll of the existing employees;

                        3.      The number of qualified positions created, qualified employees hired, and the payroll of those employees; and

                        4.      Any other information that the Department requires by regulation.

                  (ii)      The Department may require any information required under this paragraph to be verified by an independent auditor selected by the business entity.

            (7)      A qualified business entity must obtain, and submit to the appropriate State agency with the tax return on which the credit is claimed, certification from the Department that the entity has met the requirements of this section and is eligible for the credit.

      (d)      (1)      If the credit allowed under this section in any taxable year exceeds the total tax otherwise due from the qualified business entity for that taxable year, the qualified business entity may apply the excess as a credit for succeeding taxable years until the earlier of:

                  (i)      The full amount of the excess is used; or

                  (ii)      The expiration of the 5th taxable year from the credit year.

            (2)      The credit under this section may not be carried back to a preceding taxable year.

      (e)      (1)      If, during any of the 3 years succeeding the credit year, the number of qualified positions of the qualifying business entity falls more than 5% below the average number of qualified positions during the credit year on which the credit was computed, the credit shall be recaptured as follows:

                  (i)      The credit shall be recomputed to reduce the credit by the percentage reduction of the number of qualified employees;

                  (ii)      The recomputed credit shall be subtracted from the amount of credit previously allowed; and

                  (iii)      The qualifying business entity shall pay the difference as taxes payable to the State for the taxable year in which the number of qualified positions falls more than 5% below the average number of qualified positions during the credit year.

            (2)      If, during any of the 3 years succeeding the credit year, the average number of qualified positions falls below the applicable threshold number of positions under subsection (b)(2)(i) of this section, all credits earned shall be recaptured.

            (3)      (i)      During the 3 taxable years succeeding the credit year, the qualified business entity shall supply information required by the Department in regulation to verify that the business entity is not subject to paragraph (1) or (2) of this subsection.

                  (ii)      The Department may require any information required under this paragraph to be verified by an independent auditor selected by the business entity.

      (f)      Any information provided to the Comptroller or the appropriate agency by a qualified business entity in connection with eligibility for a credit allowed under this section shall be shared by the Comptroller or the appropriate agency with the Department of Business and Economic Development and shall be subject to the confidentiality requirements established by statutes or regulations applicable to the Comptroller or the appropriate agency.

      (g)      (1)      Subject to the provisions of this subsection, the Secretary shall adopt regulations to carry out the provisions of this subtitle.

            (2)      The Comptroller shall adopt regulations to provide for the computation, carryover, and recapture of the credit under § 10-704.4 of the Tax - General Article.

            (3)      The Department of Assessments and Taxation shall adopt regulations to provide for the computation, carryover, and recapture of the credit under §§ 8-214 and 8-411 of the Tax - General Article.

            (4)      The Maryland Insurance Commissioner shall adopt regulations to provide for the computation, carryover, and recapture of the credit under § 6-114 of the Insurance Article.

      (h)      The Department shall report to the Governor and, subject to § 2-1246 of the State Government Article, to the General Assembly by December 31 of each year on the business entities certified as eligible for tax credits in the preceding fiscal year.