2013 Maryland Code
ECONOMIC DEVELOPMENT
§ 6-404 - Start-up tax credit

§6-404.

(a) (1) A qualified business entity that locates in a qualified distressed county may claim a start-up tax credit in the amount provided in subsection (b) of this section.

(2) A qualified business entity is not entitled to a start-up tax credit for a cost incurred before notifying the Department of its intent to seek certification as qualifying for the start-up tax credit.

(b) The start-up tax credit allowed under this section for each taxable year equals the least of:

(1) the qualified business entity’s total eligible start-up cost associated with establishing or expanding a business facility in the qualified distressed county, less the amount of the credit previously taken for the project;

(2) the product of multiplying $10,000 times the number of qualified employees employed at the new or expanded business facility; or

(3) $500,000.

(c) (1) Subject to paragraph (2) of this subsection, if the start-up tax credit allowed under subsection (b) of this section for the taxable year in which a qualified business entity locates in a qualified distressed county 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 14th taxable year following the taxable year in which the qualified business entity locates in a qualified distressed county.

(2) (i) A qualified business entity may claim a prorated share of the credit under this subsection if:

1. during any taxable year after the qualified business entity is certified for the tax credit, the number of qualified positions filled by the qualified business entity falls below 25, but does not fall below 10; and

2. the qualified business entity has maintained at least 25 qualified positions for at least 5 years.

(ii) The prorated share of the credit is calculated based on the number of qualified positions filled for the taxable year divided by 25.

(d) (1) Subject to the limitation in paragraph (3) of this subsection and subject to § 6-405 of this subtitle, this subsection applies to any taxable year after the 4th but before the 15th taxable year following the taxable year in which the qualified business entity locates in a qualified distressed county.

(2) A qualified business entity may claim a refund in the amount, if any, by which the qualified business entity’s eligible start-up cost exceeds the cumulative amount used as a start-up tax credit for the taxable year and all prior taxable years.

(3) For any taxable year, the total amount claimed as a refund under this subsection may not exceed the amount of tax that the qualified business entity is required to withhold for the taxable year from the wages of qualified employees under § 10-908 of the Tax - General Article.

(4) (i) A qualified business entity may claim a prorated share of the credit under this subsection if:

1. during any taxable year after the qualified business entity is certified for the tax credit, the number of qualified positions filled by the qualified business entity falls below 25, but does not fall below 10; and

2. the qualified business entity has maintained at least 25 qualified positions for at least 5 years.

(ii) The prorated share of the credit is calculated based on the number of qualified positions filled for the taxable year divided by 25.

(e) A qualified business entity shall attach the certification required under § 6-402(a) of this subtitle to the tax return on which the start-up tax credit is claimed.